Products August 3, 2015

Goldman Sachs Unveils Retirement Share Class

R6 shares offer retirement investors a lower expense ratio than current institutional share classes from Goldman Sachs Asset Management.
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Goldman Sachs Asset Management (GSAM) has introduced an R6 retirement share class across 54 mutual funds, which the firm says underscores its commitment to retirement investors.

The initial launch includes 49 funds that became available for purchase on July 31.  The remaining funds will be launched later this year. 

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Retirement clients gain access to a cost-effective investment vehicle with a lower expense ratio than GSAM’s current institutional or I share class. Class R6 shares are generally available only to certain types of employee benefit plans. The R6 shares will not pay any form of intermediary compensation, which includes 12b-1 and/or distribution, service, sub-TA or any other fees. Like GSAM’s Class IR and Class R shares, they are not sold directly to the public.

The R6 retirement share class offers cost and transparency, two increasingly important considerations when structuring investment menus for defined contribution plans, notes Greg Wilson, head of defined contribution investment only (DCIO) sales for third-party distribution at GSAM.

More information is at GSAM’s website.

Administration August 3, 2015

July Brought Slight Funding Drop for Pensions

U.S. corporate pension plans saw a minor decrease in funded status last month.
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The aggregate funded ratio for U.S. corporate pension plans decreased to 86.1% for the month of July 2015, according to Wilshire Consulting, the institutional investment advisory and outsourced chief investment officer (OCIO) business unit of Wilshire Associates Incorporated.

While the month saw a slight decline, the 86.1% level heading into August “is exactly in line with Wilshire’s July 2014 funding estimate,” the firm notes. “The decrease in funding was the result of a larger increase in liability values compared to the increase in asset values.”

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During July, the sample plan funded status decreased by 0.7%, from 86.8% in June. Ned McGuire, vice president and member of the Pension Risk Solutions Group of Wilshire Consulting, suggested the decline in funding levels “was driven by a 1.8% increase in liability values versus a 1% increase in asset values.”

“The asset result is due to positive returns for most asset classes,” he explains, “while liability values rose due to a decrease in corporate bond yields.”

The aggregate figures represent an estimate of the combined assets and liabilities of corporate pension plans sponsored by S&P 500 companies with a duration in-line with the Citi Group Pension Liability Index – Intermediate. The Funded Ratio is based on the CPLI – Intermediate liability, with service cost, benefit payments and contributions in-line with Wilshire’s 2015 corporate funding study. The most current month end liability growth is estimated using the Barclays Long Aa+ U.S. Corporate Index.

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