Defined Contribution

Overview

As the market landscape and regulatory environment continue to evolve, Defined Contribution (DC) plans must manage multiple objectives, with increased focus on capital preservation and risk management. We have significant experience in partnering with plan sponsors to understand their unique needs and help them build the most effective plans for their participants.

Our Approach: How We Partner with Clients

We seek to help DC plan sponsors balance multiple goals, including driving principal stability, daily liquidity and competitive yields, and delivering solutions that position participants for successful retirement.

Broad Investing Capabilities and Proprietary Research

We have extensive experience finding relative value in global markets across a full range of asset classes and Environmental, Social and Governance (ESG) and impact investing. We offer research related to stable value and traditional assets, alternative asset classes, risk management, core menu construction and default investment options for DC plan sponsors and consultants.

Expertise in Capital Preservation

Our expertise in stable value investing, complemented by our broad fixed income platform and robust risk management process, enables us to help plan sponsors and participants address their unique liquidity and capital preservation needs.

Open-Architecture Target Date Solutions

We manage Target Date solutions through an open-architecture platform, where plan participants can access attractive ETFs and mutual funds across the broad universe of providers, benefiting from cost-efficiency and diversification.

Examples of Our Partnership with Clients

CASE STUDY 1 CASE STUDY 2

Client Description

A 401(k) plan looking for a full review of the investment options available to its participants.

Client Objective

The client had two main goals:

To ensure they were providing an adequate number of choices across asset classes.
To seek simplification within each asset class.

GSAM Solution

After discussing the goals and objectives with the client’s investment committee, we advised the client to replace the growth and value style options in all asset classes with core options. We also recommended that they remove blended options, replace passive core fixed income with an active option, remove intermediate-term and long-term treasury options and move all investments to lower fee share classes. As recommended, the client removed several investment options, added a small cap core equity strategy and an actively managed core bond strategy, and moved to lower fee share classes for many investments.

Client Description

A leading food and drug retailer in the United States, with strong local presence and national scale.

Client Objective

Following the merger and integration of its business, the client planned to merge various defined contribution plans into a single consolidated 401(k) plan. All of the investment options across multiple plans were being consolidated into an investment option lineup, which included stable value as its capital preservation option. In addition, the client had selected a new record-keeper, trustee and custodian which added complexity to the overall transition of the stable value fund option.

GSAM Solution

We engaged with the client’s consultants and structured a competitive proposal with a detailed transition plan for the conversion of two large stable value separate account portfolios into one. The multi-phase transition included an initial transfer of nearly 100 bonds to a new custodial account and a subsequent transfer of about 500 bond holdings from another manager/custodian to the same account. Finally, the approximately 600 fixed income securities and cash were transferred in-kind to GSAM-managed collective trusts. The bond transition was performed in concert with extensive wrap issuer negotiations which included investment guideline transitions, contract terminations and the introduction of new contracts with market level terms and competitive pricing, all within a seamless framework to their participants.