Retirement Insigns and Solutions from J.P. Morgan Asset Management

JourneyRetirement Insights and Solutions from J.P. Morgan Asset Management

ISSUE 10FALL/WINTER 2013

18 What Plan Sponsors WantA look at J.P. Morgan’s

latest retirement research

10 Strategies for Plan Design Success A plan sponsor case study

15 Understanding Target Date Funds

Improving participant knowledge of one of America’s

most popular DC strategies

21 The Importance of ‘Earnest’ Saving

Achieving a financially sound retirement by saving

and investing wisely

5 Speaking InvestmentsA new framework for managing risk in DC plan lineups

1 2013 Retirement Plan Adviser Survey. In July and August, approximately 8,467 adviser subscribers to PLANADVISER were asked to respond to a 42-question survey, developed by the PLANADVISER editorial and research teams. Survey questions pertained to the size and scope of the adviser’s qualified plan business, practice management, compensation and client service, as well as his assessments of investment managers, mutual funds and defined contribution (DC) providers. The results of the practice management section of the survey will be highlighted in the November/December edition of PLANADVISER.At the close of the survey, on August 1, 629 complete responses had been received from retirement plan advisers. To qualify to supply opinions on mutual fund families and specific mutual funds, an adviser had to be personally involved in evaluating and recommending fund choices in an advisory capacity to qualified plan clients; 402 advisers met this qualification.In order to evaluate defined contribution recordkeepers, advisers had to answer affirmatively that they were personally involved in evaluating and recommending DC plan providers in an advisory capacity when working with qualified plan clients; 404 advisers did so. In addition, an adviser had to have worked with a DC recordkeeper more than once for his favorability rating of that recordkeeper to count. To receive more information on this survey and for additional research available, please contact [email protected] 2013 Retirement Plan Adviser Survey. 404 qualified advisers were asked to select the defined contribution provider with the best service.3 RIIA Retirement Income Communications Awards sponsored by Investment News in the category of printed materials. This is the first time any firm has won the category two years in a row.4 2013 Retirement Plan Adviser Survey. 310 qualified advisers voted. To qualify, an adviser must be personally involved in evaluating and recommending fund choices in an advisory capacity with qualified plan clients. “Top 5%” = percentage of qualified advisers (of 310 total) who selected the fund family; “1st place %” = number of first-place votes out of total Top 5 votes.5 Morningstar Awards Nominee 2012. Morningstar, Inc. All Rights Reserved. J.P. Morgan SmartRetirement Team. Nominated for Allocation Fund Manager of the Year, United States.6 Morningstar report published November 5, 2013.7 Lipper Fund Awards 2013.8 2013 Retirement Plan Adviser Survey. Up to five funds could be chosen—254 advisers voting; 1,143 total votes.9 Pensions & Investments 2013.TARGET DATE FUNDS: Target date funds are funds with the target date being the approximate date when investors plan to start withdrawing their money. Generally, the asset allocation of each fund will change on an annual basis with the asset allocation becoming more conservative as the fund nears the target retirement date. The principal value of the fund(s) is not guaranteed at any time, including at the target date.

J.P. Morgan retirement investments and services received recognition and awards from across the industry— a true testament to our ability to build stronger retirement outcomes by sharing our knowledge and expertise.

#1 investment firm for:1

• Advisor support/value-added services.• Plan sponsor education materials.• Supporting materials.• Wholesalers.• Quarterly evaluation materials.

• Top 5 fund family preferred by plan advisers.4

• JPMorgan SmartRetirementSM portfolio management team nominated for 2012 Morningstar U.S. Allocation Fund Manager of the Year.5

• “Silver” Morningstar target-date fund series rating as of September 30, 2013.6

• 2013 Lipper Fund Awards for Excellence: JPMorgan Equity Income Fund.7

• #4 mutual fund (SmartRetirement) most recommended by advisers for plan sponsors.8

• The Importance of Being Earnest won the 2013 RIIA Award.3

• The Guide to Retirement won the 2012 RIIA Award.3

• 5 first-place Eddy Award wins for outstanding investment education.9

• #2 rated recordkeeper for best overall service, large plans.2

J.P. MORGAN RETIREMENT INDUSTRY RECOGNITION AND AWARDS

O V E R A L L

R E C O R D K E E P I N G

T H O U G H T L E A D E R S H I P

I N V E S T M E N T S

PA R T I C I PA N T C O M M U N I C AT I O N S

FOR MORE INFORMATION, CONTACT YOUR J.P. MORGAN REPRESENTATIVE.

OVERALL

INVESTMENTS

RECORDKEEPING

PRINTED MATERIALS

PARTICIPANT COMMUNICATIONS

the ContentI S S U E 10 Fa l l / W i n t e r 2 0 1 3

IN THIS ISSUE

2 A WordMichael Falcon, head of retirement at J.P. Morgan Asset Management, discusses how J.P. Morgan’s research and insights are available to help clients make well-informed decisions about retirement plans.

3 Stat LifeWhy combining automatic enrollment with automatic contribution escalation can help participants increase their retirement savings.

4 Legislative CornerThe Supreme Court’s ruling on the Defense of Marriage Act and guidance on the taxation and administration of employee benefit plans.

5 Speaking InvestmentsAn outcome-oriented approach requires a broader view of risk when designing and evaluating DC investment menus.

8 Executive PerspectiveJ.P. Morgan’s retirement chief marketing officer discusses how thought leadership, distinct tools and extensive resources can address the needs of clients at every touch point.

10 Strategies for Plan Design SuccessHow one company stays on the cutting edge of plan design to better help participants achieve their goals.

15 Understanding Target Date FundsInnovative communications program seeks to improve participant knowledge of these popular but often misunderstood investment strategies.

18 What Plan Sponsors Want Latest research reveals what plan sponsors are thinking and what actions they are taking when it comes to their retirement plans.

21 The Importance of ‘Earnest’ SavingResearch demonstrates that a comfortable retirement is possible for those who plan carefully, save consistently and invest efficiently.

24 Did You Know?Retirement facts and figures from J.P. Morgan’s 2013 Defined Contribution Plan Sponsor Survey Findings.

J.P. Morgan Asset Management JOURNEY II

What do plan sponsors want to accom-plish with their DC plans today? What goals and philosophies are driving their decision making? And how are they shaping the design, investment lineup, communications and administration of their DC plans to meet the growing re-tirement needs of employees while con-tinuing to fulfill their role as fiduciaries?

To answer these questions, J.P. Morgan Asset Management conducted its first plan sponsor survey in the period from December 2012 through January 2013. We canvassed nearly 800 plan sponsors–all key decision makers–representing plans with assets from under $1 million to more than $1 billion.

Our findings indicate that plan spon-sors are clearly committed to achiev-ing a range of “highly important” goals through their DC plans. These aspira-tions include the traditional and also shorter term objectives of recruiting and

retaining quality employees and dem-onstrating a level of caring for

them. But plan sponsors are equally committed to help-ing employees achieve the

long-term goal of a financially secure retirement. As exhibited

most clearly by the larger plans in our survey (those with assets greater than $250 million), plan sponsors are taking steps to fortify their plans to improve participants’ retirement outcomes.

While larger plans lead the continued transformation of DC plans, changes are taking place at a modest pace for

the group as a whole. On the positive side, more than 75% of all plan spon-sors (and 85% of those with larger plans) rate having their plan “help make sure employees have a financial-ly secure retirement” as one of today’s “highly important” goals. In addition, plan sponsors appear to be moving to-ward success criteria that align with the goals of retirement outcome, and they are factoring these goals into communi-cations and plan design decisions.

On the other hand:• Only 44% consider the “percent-

age of particpants whose account balances are on track to replace at least 80% of their final salary in retirement” as a “highly impor-tant” criteria by which to measure plan effectiveness. “Employee/participant satisfaction level” and “investment performance” are the most frequently cited measures of plan success.

•Only 25% see “promoting an un-derstanding of the amount of in-come participants are on track to receive in retirement” as among the “top three” goals for plan com-munications. Twice as many give the top spots to “educating em-ployees about the benefits of the plan” or “having employees view the plan as a benefit.”

• Twice as many say they base plan design decisions on what they perceive to be “participant needs” (29%) or on “cost to the company” (28%), versus “getting the maxi-mum number of participants to experience adequate income in retirement” (11%).

•Roughly 65% to 75% feel that their DC plans have been “highly effec-tive in recruiting, retaining and demonstrating a level of caring for employees,” while only about 50% to 60% say their plans are “highly effective in providing financial security for employees, helping to ensure that employees have a financially secure retirement and allowing employees to retire at their normal retirement age.”

A more concrete indication that plan sponsors’ actions may not be evolving as quickly as their plan objectives is the rate of adoption of innovative plan features designed to help participants achieve a financially secure retirement. It is encouraging that target date funds (TDFs) and automatic enrollment have been embraced by the majority of larger plans, and also that close to half of these plans are using automatic contribution escalation. But imple-mentation has been slower for plan sponsors overall, with less than half using TDFs and automatic enrollment and even fewer employing automatic contribution escalation or conducting re-enrollments into their qualified de-fault investment alternatives (QDIAs).

Our survey findings highlight one of the key challenges for plan sponsors: evolving their DC plans to attract, re-tain and ensure a high level of satis-faction among employees today, while helping employees achieve a satisfac-tory retirement lifestyle tomorrow.

Results from our survey suggest that

EVOLUTIONARY—NOT REVOLUTIONARY—CHANGE

OUR FINDINGS INDICATE THAT PLAN SPONSORS ARE CLEARLY COMMITTED TO ACHIEVING A RANGE OF “HIGHLY IMPORTANT” GOALS THROUGH THEIR DC PLANS.

The past 30 years have witnessed an incredible transformation in defined contribution (DC) plans. Once merely a supplementary benefit, DC plans have become the cornerstone of retirement security for an expanding proportion of America’s workforce.

What Plan Sponsors Want From Their DC Plans—And What They Are Doing About ItFindings from J.P. Morgan’s inaugural 2013 Defined Contribution Plan Sponsor Survey

THE RETIREMENT CHALLENGE

HOW ONE COMPANY CONTINUES TO ENHANCE ITS RETIREMENT PLANS TO HELP ITS EMPLOYEES BETTER MEET THEIR GOALS

LESSONS From the Field...

NEW RETIREMENT STUDY EMPHASIZES THE IMPORTANCE OF DILIGENT, ‘EARNEST’ SAVING

plan save early entitlements plan 401(k) carefullymedicare 401(k) social security income consumption

consumption

401(k) consumption save consistently medicare

employment consumption save early entitlements

market returns plan carefully invest efficiently

market returns entitlements income consumption

taxes consumption save consistently medicare

medicare taxes 401(k) save consistently plan carefully

medicare taxes entitlements

employment taxes market returns 401(k) save early

consistently employment social security market

medicare 401(k) plan carefully market returns

invest efficiently medicare 401(k) market returns

entitlements consumption save consistently medicare social security invest efficiently plan carefully

save early plan carefully employment social security

social security save consistently taxes income medicare

save early invest efficiently medicare income

income

consumption entitlements social security 401(k)

social security 401(k)

income save early plan carefully consistently

income save early

plan carefully

For more information, email [email protected].

I JOURNEY Fall 2013

First introduced 20 years ago, target date funds (TDFs) now rank as one

of the most popular retirement investment options in America, thanks,

in particular, to their growing use in defined contribution (DC) plans.

Understand Target Date Funds

RISKRISK

J.P. Morgan JOURNEY I

Adopting a broader definition of risk when designing and evaluating investment menus can help potentially increase the effectiveness of defined contribution (DC) plans and may assist participants in reaching their savings and investing goals.

Participants in DC plans face a variety of risks, including market-related risks such as rising inflation, fluctuating interest rates and market volatility, as well as personal risks such as outliving their assets and making poor decisions when selecting and allocating their investments (as shown in Exhibit 1). While the types and degree of risks participants are exposed to may vary over time (as shown in Exhibit 2), one fact remains constant: risk management is critical for achieving successful investment outcomes.

While plan sponsors and advisors are doing their part to help mitigate risk by presenting choice within DC investment lineups, they also need to ensure that they are evaluating and monitoring these investments and solutions in an appropriate way. This means taking the potential for delivering better retirement security into consideration.

The need for a new way of thinking

Managing Risk in DC Menus

J.P. Morgan Asset Management JOURNEY 1

mailto:[email protected]

2 JOURNEY Fall/Winter 2013

a Word

A deep understanding of our clients’ needs is the basis for our strong partnerships with the plan sponsors, advisors and individuals we serve. We seek to be a thoughtful partner that shares research-based knowl-edge and insights that empower advisors and plan sponsors to make well-informed, highly coordinated decisions about defined contribution (DC) plan design, investments, communications and administration.

Gaining New Insights

A year in researchOur 2013 Plan Participant Survey Findings: Searching for direction on the journey to retirement and our 2013 Defined Contribution Plan Sponsor Sur-vey Findings: Evolving toward greater retirement security, released in June and August of this year, respectively, provide a rare glimpse into plan sponsor and participant attitudes, views, perceptions and behavior. Some of the most com-pelling insights illuminate the need for strong guidance—something expressed and shared by both plan sponsors and participants. Today’s plan sponsors value

their advisors and look to them to bring innovative ideas on plan management to the forefront. For their part, par-ticipants look toward their employer and their plan’s administrator to pro-vide access to savings and investment tools that can help them achieve retirement security.

Dialogue that mattersWe believe our insights have the most impact when they generate dialogue that leads to improved standards, better align-ment of plan objectives with design struc-ture and more effective ways for partici-

pants to save and invest. One of the ways we are facilitating important discourse on retirement issues is through our con-ferences and events. This year we hosted our first Defined Contribution Summit for retirement advisors and consultants, as well as our recent Defined Contribu-tion Plan Sponsor Conference (with its theme of “Bold thinking. Critical deci-sions.”), which brought together more than 100 plan sponsors and retirement industry leaders. The interactive sessions at both of these events focused on many of the top-of-mind issues we cover in our latest edition of Journey. The journey continuesIn this issue, we’ll hear how one com-pany is moving toward a more out-comes-focused benefits strategy that emphasizes employees’ overall finan-cial well-being. We’ll also explore a new way to think about risk in DC invest-ment menus, review some of our recent research findings and highlight the lat-est regulatory and legislative activity that may impact retirement policy.

Much of this issue is devoted to help-ing interpret how our latest research findings impact advisors, plan sponsors and the participants they serve. While the full scope of our findings cannot be covered here, we encourage you to reach out to us if you would like additional information or complete copies of any of the research studies referenced. As the year comes to a close, development of our research agenda for 2014 is well underway. We promise to keep asking questions as we continue on the journey to retirement.

Michael FalconHead of Retirement J.P. Morgan Asset Management

https://www.jpmorganfunds.com/cm/Satellite?pagename=jpmfVanityWrapper&UserFriendlyURL=contentdet_module&smID=1323361768485


http://digital.turn-page.com/i/148581

http://digital.turn-page.com/i/210981


Stat life

Saving for RetirementMake it automatic

1 J.P. Morgan 2013 Defined Contribution Plan Sponsor Survey Findings.

2 J.P. Morgan 2013 Plan Participant Survey.

including 62% of large-sized plans having at least $250 million in assets.1 While these num-bers are an encouraging sign that more em-ployees are saving at least a portion of their income for retirement, we believe automatic enrollment is only one ingredient in a well-designed retirement savings plan. Another method to increase the likelihood that par-ticipants will reach adequate deferral levels over time is to combine automatic enrollment with automatic contribution escalation.

While most plans using automatic enroll-ment typically set 3% as their default con-tribution rate, many plan sponsors believe employees need to save 10% or more to reach their goals. But, of those companies using automatic enrollment, only 21% also

use automatic contribution escalation.1 While this feature helps participants save

more, while also overcoming their tendency to stick with the original contribution rate, many employers are reluctant to use it as a default option for fear of an employee back-lash. These concerns appear unfounded, how-ever. A study by J.P. Morgan shows that 60% of participants are either in favor of or neutral on the use of both automatic enrollment and automatic contribution escalation.2

In addition, industry experience shows that employees rarely choose to opt out of these features, and generally do not increase their initial contribution rates unless automatic contribution escalation is in place. As a result, those who are automatically enrolled without automatic contribution escalation tend to save less (an average of 4%) than those who par-ticipate in 401(k) plans at a level of their own choosing. In 2011, for example, the average savings rate of those who voluntarily enrolled in plans administered by J.P. Morgan Retire-ment Plan Services was 7.7%.

As the chart illustrates, the value of assets

$0

$100,000

$200,000

$300,000

$400,000

$500,000

1972 1982 1992 2002 2012

The Impact of Higher Contribution Rates Value of financial assets

Voluntary enrollment at 10%

Voluntary enrollment at 7.7%

Voluntary enrollment at 6%

Automatic enrollment at 3%

$383,000

$492,000

$302,000

$174,000

Build savings automatically

Put these ideas to use

Source: Tax Policy Center, Bureau of Economic Analysis, Bureau of Labor Statistics, J.P. Morgan Asset Management, U.S. Census Bureau, Bloomberg.This example assumes that one family member has earned a median income since 1972, which in 2012 was $56,000. At age 30, the family begins saving, with an equity allocation of 65%, which gradually decreases to 40% by age 65. The rest of its portfolio is allocated to fixed income. Other estimates include applicable federal and state tax rates for each scenario. Estimates for annual equity returns, T-bill rates and inflation are 7.0%, 2.5% and 2.0%, respectively. For tax purposes, 80% of equity gains in after-tax savings accounts are assumed to be realized each year. The example is for illustration purposes only and does not represent any particular investment prod-uct. This information is also for educational purposes only and is not meant to provide tax or investment advice.

The percentage of employer-sponsored 401(k) plans using automatic enrollment continues to climb, with 43% of plan spon-sors now adopting this feature,

accumulated by individuals who save more than the default contribution rate of 3% can be substantial. For example, a person earning a median income of $56,000 in 2012 who con-tributed 6% over 35 years could retire with roughly $302,000. That’s $128,000 more than the $174,000 an individual would have accu-mulated who saved at the default contribu-tion rate of 3% over 35 years. The difference would be much larger, of course, for some-one with a voluntary savings rate of 7.7% and higher still for those who saved 10%. And this doesn’t even consider the positive impact on retirement assets of an employer match.

Plan sponsors may want to rethink setting the bar too low. When adopted effectively, higher default contribution rates, along with automatic contribution escalation, can help plan sponsors better assist their employees to achieve their retirement goals.




Legislative corner

Deciphering DOMAThe Supreme Court ruling on same-sex marriage raises questions about the taxation and administration of employee benefit plans

In finding this language unconstitutional, the Court was considering a case in which a same-sex spouse was denied a spousal deduction on federal estate taxes. Its ruling raised a number of questions regarding the taxation and administration of employee benefit plans. Before the Court’s decision, existing law held that a same-sex spouse would not be considered a spouse for the purposes of consenting to a beneficiary designation or distribution. For employer-sponsored health-care plans that provided coverage to same-sex spouses, the value of that coverage was considered taxable income for the employee and subject to both employee and employer payroll taxes.

After the Court’s decision, it seemed clear that same-sex spouses in states that recognized same-sex marriage would have rights identical to those of opposite-sex spouses. But it was not clear how the ruling would apply to those states that did not recognize

same-sex marriages. The basic unresolved question: Would spousal status be determined by whether the marriage was legal in the state in which it was performed (state of celebration) or whether the marriage was recognized by the state in which the couple currently resided (state of domicile)?

On August 29, 2013, the Department of the Treasury and the Internal Rev-enue Service issued guidance that ad-dressed some of the questions raised in the Windsor decision. In Revenue Rul-ing 2013-17, Treasury and the IRS held that, for federal tax purposes, the term “spouse” included a same-sex spouse if the individuals were lawfully mar-ried under state law, and that spousal status would be recognized even if the couple resided in a state that did not recognize same-sex marriage. In ex-plaining their ruling, the agencies dis-cussed the administrative burdens that would ensue if plans were forced to consider the state of domicile in deter-mining spousal status. The ruling also clarified that civil unions, domestic partnerships and other similar formal relationships would not be included in the definition of “spouse” or “mar-riage.” The ruling went into effect on September 16, 2013.

The recent guidance did not cover one important issue: the potential ret-roactive impact of the Windsor deci-sion. Treasury and the IRS did issue a series of FAQs explaining how em-ployees and employers could file for re-funds on any income and payroll taxes paid on amounts that were included in taxable income. But they did not ad-dress to what extent same-sex spouses might have claims arising from past

plan actions that did not recognize their spousal status. For example, if a participant died and a same-sex spouse was not provided survivor ben-efits, does he or she now have a claim against the plan? One would hope that just as the agencies recognized the ad-ministrative burdens associated with basing spousal status on state of do-micile, they would also recognize the ramifications of requiring plan admin-istrators to revisit decisions that were valid based on what was then existing law. Treasury and the IRS have indi-cated that additional guidance is forth-coming that will address these issues.

We will continue to monitor these events and keep you apprised of any new developments.

On June 26, 2013, the U.S. Supreme Court ruled in United States v.

Windsor that Section Three of the Defense of Marriage Act (DOMA) violated the principles of equal pro-tection guaranteed under the Fifth Amendment to the Constitution. Section Three of DOMA provides that, for purposes of interpreting statutes and regulations, “the word marriage means only a legal union between one man and one woman, and the word spouse refers only to a person of the opposite sex.”

https://host148.agsdc.net/UCFiles_FAM/attachments/DC-FLY-59109_1311.pdf


RISKRISK

Adopting a broader definition of risk when designing and evaluating investment menus can help potentially increase the effectiveness of defined contribution (DC) plans and may assist participants in reaching their savings and investing goals.

Participants in DC plans face a variety of risks, including rising inflation, fluctuating interest rates and market volatility, as well as personal risks such as outliving their assets and making poor decisions when selecting and allocating their investments (as shown in Exhibit 1). While the types and degree of risks participants are exposed to may vary over time (as shown in Exhibit 2), one fact remains constant: risk management is critical for achieving successful investment outcomes.

While plan sponsors and advisors are doing their part to help mitigate risk by presenting choice within DC investment lineups, they also need to ensure that they are evaluating and monitoring these investments and solutions in an appropriate way. This means taking the potential for delivering better retirement security into consideration.

The need for a new way of thinking

Managing Risk in DC Menus

SPEAKING INVESTMENTS


http://funds-imcms.jpmchase.net/blobcontent/533/152/1323367543945_Managing_risk_in_DC_Investment_lineups.pdf


According to John Galateria, head of defined contribution investment solutions at J.P. Morgan Asset Management, plan sponsors can no longer afford to just focus on asset class or individual strategies’ risk/return profiles, something they’ve done historically when evaluating the funds in their investment lineups. “They need to seek ways to address and mitigate the broader set of risks participants face and, in doing so, become more outcomes-focused,” says Galateria.

Galateria suggests that focusing on outcomes such as retirement security may necessitate that plan sponsors reassess the way in which they evaluate the role of low-volatility options such as money market and stable value funds in their investment menus.

“When you consider that a participant could ultimately invest 100% of his or her assets in a single option, you can make the case that professionally

savings than those investors whose portfolios are more diversified. For example, young employees between the ages of 25 and 35 who invest all of their savings in a lower-risk, lower-return option such as stable value could end up with substantially less in savings at retirement due to slower growth over time and a marked lack of diversification.

On the other hand, for investors between the ages of 55 and 65, a potential shortfall from investing too conservatively may not be as damaging to their savings because they are closer to retirement. A more aggressive investment approach, however, may make these participants more vulnerable to other risks, including the possibility of market downswings at or around the time they are ready to retire, which could substantially impact their savings, right when they are needed the most.

According to Galateria, plan sponsors have an opportunity to help improve the investment outcomes of their participants by constructing investment menus that feature a consolidated and simplified core lineup of, where possible, professionally managed solutions such as diversified stocks, diversified bonds and TDFs.

“Unlike low-volatility options such as stable value, target date investments offer diversification and asset allocation strategies that may be appropriate for a broad range of participants, regardless of age or retirement time horizon,” notes Galateria. “These types of investment options can also help mitigate some investment risks through effective strategic and tactical asset allocation. In particular, these strategies are able to adapt to changing market conditions and risks.”

While TDFs have a built-in ability to manage asset allocation, their philosophies and approaches to managing risk may vary. This has

managed options such as target date funds (TDFs), which may offer more diversification and growth potential, are relatively low-risk when compared with more conservative options such as stable value,” says Galateria, who also maintains that adopting this view recasts the role of certain types of investments within the plan’s lineup.

While most plans offer a range of options starting with relatively low-risk, low-return choices such as stable value and money market funds, those individuals who invest in these more conservative funds may unintentionally take on other risks that could prove damaging to their long-term saving and investment outcomes.

One such risk is the possibility that participants could end up with less

Source: J.P. Morgan Asset Management. Shown for illustrative purposes only.

ExHIBIT 1: DC PLAN PARTICIPANTS ARE ExPOSED TO A BROAD RANGE OF RISKS

RiSk iS DynAMiC AnD MUlTi-FACeTeD

INFL

ATIO

N

RISK

RISKACCUMULATION

RISK

LONGEVITY

INTEREST

RATE RISK

MARKETRISK

PARTICI

PANT

USER R

ISK

Failure to save enough due to lack

of growth, low savings rate orunexpected market event Risk of outliving savings

Risk

that

val

ue o

f prin

cip

al will

be e

rode

d by

inf a

tion

Risk of capital or investment

losses due to marketor asset class volatility

Possibilit

y par

ticipa

nt w

ill m

isuse

investmen

t opti

ons (

too c

onse

rvat

ive

or aggre

ssive

, und

er-d

iver

sif e

d)Risk that f xed income

securities will lose value

if rates rise

Changing the paradigm on what is considered ‘low risk’

A wise option for plan participants

https://www.jpmorganfunds.com/cm/Satellite?pagename=jpmfVanityWrapper&UserFriendlyURL=topic&topicId=1303387165250


selecting and evaluating investment options for DC plans. When we do this, it’s easy to see that TDFs are one of the best options for participants of all ages and at all stages of their financial lives.”

More so than any other option that is offered in the typical DC menu, TDFs have an innate ability to manage the broad range of risks that participants face as they move closer to retirement. This makes it all the more important for plan sponsors and advisors to understand the methodology underpinning the design of the TDFs they select and to ensure that this methodology is consistent with the needs of the plan.

as TDFs may offer one of the best ways to achieve a successful retirement outcome. Still, Galateria cautions that understanding a target date manager’s philosophy and approach to managing risk is critical.

Important questions that plan sponsors and advisors should consider include:• What is the target date manager’s

process for managing risk within the fund’s glide path?

• Are the underlying strategies actively managed or do they provide passive-only exposure?

• What is the extent of the manager’s ability to diversify his or her fixed income exposure along the glide path?

• What expertise does the manager have in managing lower-correlated, extended asset classes such as high yield and emerging markets debt?

Concludes Galateria, “If we are to adopt a more outcomes-focused strategy for how we define and measure the success of DC plans at preparing participants for retirement, then we need to rethink how we define which options are considered lower risk when

important implications for the way in which TDFs should be evaluated, assessed and chosen because the types of risk a manager is seeking to mitigate may be different. In addition, managers may prioritize market-related risks—such as inflation, rising interest rates, changing market conditions and asset class volatility—differently over the glide path’s time horizon. Understanding the risks a manager is seeking to address is as important as understanding how the manager seeks to manage these risks, and should impact the type of target date strategy a plan sponsor selects.

Daniel Oldroyd, a portfolio manager in J.P. Morgan Asset Management’s Global Multi-Asset Group, notes that target date fund managers are better equipped than individual investors to identify and react to changing market conditions by implementing a change in asset allocation or, in the case of rising interest rates, by changing the duration of their fixed income holdings.

Given their risk-management benefits, professionally managed solutions such

Perc

enta

ge o

f Por

tfol

io A

lloca

tion

Source: J.P. Morgan Asset Management. Shown for illustrative purposes only.

ExHIBIT 2: DC PARTICIPANTS FACE DIFFERENT MAGNITUDES OF RISK OVER TIME

Opinions, estimates, forecasts and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice. We believe the information provided here is reliable. These views and strategies de-scribed may not be suitable for all investors. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations. Past performance is no guarantee of future results.

TARGET DATE FUNDS. Target date funds are funds with the target date being the approximate date when inves-tors plan to start withdrawing their money. Generally, the asset allocation of each fund will change on an annual basis with the asset allocation becoming more conserva-tive as the fund nears the target retirement date. The principal value of the fund(s) is not guaranteed at any time, including at the target date.

invest in what you know

Age

100

longest time horizon(up to age 40)

The middle years(Ages 40-65)

At and in retirement(Age 65 and after)

90

80

70

60

50

40

30

20

10

025 30 35 40 45 50 55 60 65 70 75

ACCUMULATIONRISK

ACCUMULATIONRISK

PARTICIPANTUSER RISK

PARTICIPANTUSER RISK

INFLATIONRISK

INFLATIONRISK

INTEREST RATE RISK

INTEREST RATE RISK

MARKETRISK

MARKETRISK

MARKETRISK

LONGEVITYRISK

http://www.jpmorgansmartretirement.com/


E x E C U T I V E P E R S P E C T I V E

and insights at every touch point in a meaningful and relevant way. In an in-terview with Journey, Baer talks about how J.P. Morgan is helping plan sponsors, advisors and individuals achieve better retirement outcomes.

You’ve been retirement chief marketing officer for 2½ years. What were your first impressions of J.P. Morgan and its retire-ment business? One of the things that drew me to J.P. Morgan is the firm’s rich legacy as one of the most highly regard-ed, global financial services firms, with recognized expertise in serving institu-tions, intermediaries and individuals. I was and still am impressed with the depth of talent, investment expertise and retirement industry knowledge we have within our organization.

Everything we do is centered on ensuring the safety and security of

Delivering the Firm: An Interview with J.P. Morgan’s Retirement Chief Marketing OfficerAs chief marketing officer for J.P. Morgan’s retirement business, Benji Baer is responsible for harnessing the intellectual capital and resources of the firm to create content, programs and tools that ad-dress the needs of its broad set of retirement clients. This includes developing a unified platform that delivers the firm’s capabilities

people’s financial assets for the long term and, ultimately, for some version of retirement. Our expanded retire-ment business draws on our strengths and unique capabilities to help people achieve their distinct retirement goals.

What is J.P. Morgan’s commitment to the retirement business? We believe that how people prepare for retirement is one of the most important decisions most indi-viduals will face in their lifetimes. For us, retirement is much more than a business, it’s an issue of critical importance for our country. It’s our heritage and culture to share our knowledge more broadly to help all retirement stakeholders prepare for long-term financial stability. This in-cludes driving dialogue among policy makers, economists, advisors and corpo-rate leaders to solve the systemic chal-lenges Americans face, as well as helping

individuals understand how to overcome their behavioral realities.

Last year you completed research to better understand the core competen-cies and areas for improvement of

J.P. Morgan’s retirement efforts. What did you learn? In speaking to plan sponsors, advisors, industry influencers and others, we heard that people hold our re-tirement organization and offerings in very high regard. They look to us for our distinct in-

sights and depth of knowledge across a variety of subjects. What they value most is our ability to deliver that infor-mation in a way that’s digestible, usable and relevant.

Tempering this enthusiasm were others who indicated that they were not fully aware of our range of capabili-ties and the broad agenda and innova-tion underway.

Does this present a challenge for J.P. Morgan? Not at all. This is largely an indication that we haven’t yet fully delivered on our comprehensive capa-bilities to all audiences, and our clients are anxious to hear more about what we can do for them. The flip side is that, in the short time we have been aligned and have grown our capabili-ties, the market has responded favor-



ably to our presence, as evidenced by our strong asset flows, continued lead-ership in the target date funds (TDFs) space and a growing recognition of our commitment to serving and supporting advisors and plan sponsors across all market segments.

So what are you doing to better communicate the firm’s capabilities and key messages? For the past year, we’ve fo-cused on refining and unifying how we interact with clients and prospects, both on a one-to-one basis through our client-facing teams and more broadly through increased activity and presence in the market. This means delivering indus-try-leading insights, working through client challenges holistically and of-fering best-in-class investment and recordkeeping solutions.

Does this message apply to both insti-tutional and individual clients? Yes, J.P. Morgan offers proprietary tools and solutions that speak to all of our retire-ment clients. For defined contribution plans, we offer bundled solutions for all plan sizes. Our Retirement LinkSM solution, for example, can fill the gaps in coverage that exist in the small- to mid-size market, delivered with the ex-pertise, features and high-touch service that our largest institutional clients en-joy. In the case of individual investors, we’re focusing on ways to help advisors drive deeper, more meaningful con-versations about retirement planning, encompassing saving, spending and investing strategies.

How is J.P. Morgan driving innovation in product development? Three key initia-tives come immediately to mind: first, assisting people in preparing for and living in retirement by helping them plan and create the income streams they will need when they stop work-

What are the benefits of being part of the larger JPMorgan Chase family? Retire-ment is an issue that is very important to our entire organization, and we have a healthy, ongoing exchange of informa-tion and knowledge—data, insights, fo-cus group research, product and service development—across our asset manage-ment business and all parts of the bank. Each party benefits because we use this information to create smarter ways to solve the retirement needs of both indi-viduals and institutions.

What are some of the issues you expect will play an important part in the firm’s thought leadership strategy? One of the themes that ties our thought leadership agenda together is a deliberate focus on how to best shape product solutions

and policy to address behavioral reali-ties. For example, at the highest level, we are exploring topics such as how different social structures influence how people interact with their money on both a national and global level. An-other important theme is longevity, and how longer life ex pectancies are likely to impact workforce management. We are also spending a significant amount of time and resources on developing a dynamic approach to optimizing retire-ment income strategies. More to come on this in early 2014.

ing; second, building out our target date capabilities in the U.S. and abroad; and third, packaging and delivering the breadth of financial products and insights from across JPMorgan Chase through an integrated solution that companies can offer as an additional corporate benefit.

More broadly, we’re interested in how advancements in technology can create new opportunities for us to en-gage with our clients. And we’re always looking for ways to better educate and communicate through programs like our award-winning Audience of One® participant experience.

What are your areas of focus? In 2014, we plan to introduce a new wave of innovation for two of our flagship of-

ferings: Target Date CompassSM, which helps advisors and plan sponsors evalu-ate and select the appropriate suite of TDFs, and Audience of One. We’ll also continue to focus on working with plan sponsors and advisors to holistically address all of a plan’s varied needs. Building and managing retirement plans requires a series of intercon-nected strategic decisions. For example, plan design choices affect the invest-ments you offer, which can then drive the way you implement and administer your plan and also communicate its fea-tures and benefits.

it’s our heritage and culture to share our knowledge more broadly to help all retirement stakeholders prepare for long-term fnancial stability.

http://progressive.powerstream.net/002/00541/Ao1/

https://www.jpmorganfunds.com/cm/Satellite?pagename=jpmfVanityWrapper&UserFriendlyURL=targetdatecompass




STRATEGIES for Plan Design Success...


In 2005, Bemis Company, Inc., a Wisconsin-based packaged goods

company, embarked on a multi-year effort to enhance its retirement

savings plans. In the last eight years, the company has introduced a

series of initiatives—from the introduction of automatic enrollment and

automatic escalation programs to the use of target date funds (TDFs) as a default

investment option to an annual employee re-enrollment—that demonstrate its

commitment to the long-term well-being of its employees.


Bill: You’ve made many significant changes to your retirement plans over the past few years. What were the main drivers behind these changes?

Melanie: Bemis has always had our employees’ best interests in mind when designing and implementing employee benefit plans. And we were eager to encourage greater participation in our retirement plans to help our employees meet their long-term savings goals. So, in 2005, we began automatically en-rolling our new hires in our 401(k) plan at a 3% deferral rate. What we experienced, however, was that employees were not opting out of the plan and those employ-ees who were auto-enrolled didn’t increase their contribution rates above 3%. Around that time, we were also plan-ning to implement a new profit-sharing plan. We saw this as a great opportunity to redesign our overall plan so that we could really help our participants be more successful in their saving. Because we felt it was necessary

for everyone who was eligible for the profit-sharing plan to participate, we be-gan to automatically enroll all eligible participants on an annual basis. Most significantly, we also required all of our profit-sharing participants to contribute at least 3% to the 401(k) plan in order to maintain their eligibility in the profit-sharing plan.

Bill: How did your employees react to this change?

Melanie: Very few people complained about it. As a result, we felt we could make even more changes to help people save more. In 2008, we introduced an automatic escalation feature to increase contribu-tion rates by 1% a year, up to 8% of an employee’s total pay. And, in 2012, we said to ourselves, “This is working well. Why don’t we change our deferral level to a maximum of 10% of an employee’s total pay?,” which is an amount more in line with what we believe employees

need to save over the long run. We also recognized that automatic en-rollment was important, not just for the people in our profit-sharing plan, but for everyone. As a result, we now re-enroll all of our employees in the 401(k) plan once a year. These options may not be for every-one, but we want to encourage our em-ployees to save more. If they choose not to do so, however, they always have the right to opt out of our 401(k) plan.

Bill: Why have you been so successful in introducing these features?

Melanie: I think most importantly is to inform your employees early and often about what you’re planning to do. In our case, that meant frequent and ongoing communications. J.P. Morgan has been a big help with all of our communications. For automat-ic escalation, for example, we sent a let-ter to our employees’ homes to let them know their contributions were going to

Bill McDermott, head of sales and client solutions for J.P. Morgan Retirement Plan Services, spoke recently to Melanie Higgins, Bemis’ global retirement director, about the goals and design of these initiatives, as well as how other plan sponsors may learn from Bemis’ experiences. Here are highlights from their conversation.

STRATEGIES for Plan Design Success...


be automatically increased. We then fol-lowed up with additional information in their annual enrollment materials.

In this way, people got accustomed to what would happen. They knew what was coming and what they could expect, year after year. Granted, it takes a lot of communicating the first time you do it so that people understand what’s going to happen. But then it becomes fairly stan-dard protocol.

Bill: Have you encountered any chal-lenges along the way?

Melanie: Probably our biggest chal-lenge, overall, has been in working with the union boards, which tend to be our toughest critics.

In working with board members, we take the time to walk them through the potential benefits of our proposals, in-cluding the reasons for our recommen-dations and how employees can opt out at their discretion.

Here, again, J.P. Morgan has been a big help. We worked with J.P. Morgan to pre-pare materials for board members to dem-onstrate the impact on savings of making automatic increases, compared with not making any increases. This helped to il-lustrate the results our employees could expect to achieve in the long term.

Bill: In 2012, you reconfigured your en-tire investment lineup and then complet-ed a re-enrollment. What was that like? How did your employees respond?

Melanie: When we decided to reeval-uate our lineup—including looking at the different options that are now available, as well as fees and revenue-sharing—we felt we had a really good opportunity to provide new choices that could bring our participants more in line with investments and alloca-tions that would be more appropriate for their age.

Most significantly, this is when we decided to implement automatic in-vestment into TDFs. Participants still have the opportunity to enroll in what-ever funds we offer, but if they don’t make a choice, we automatically move them into TDFs.

One reason I believe this particular re-enrollment has been a big success is that our employees are now accus-tomed to things like automatic enroll-ment and automatic escalation, so the process is familiar. As always, we told our employees what was going to hap-pen, we reminded them of our plans and we confirmed everything as we went along. Again, we had very few complaints or pushbacks.

Bill: Can you talk a little more about how you selected your new lineup of funds? What kind of assistance did you get from your consultant, record-keeper and others in implementing these changes?

Melanie: We started the process by working with our consultant [Russell Investments] to evaluate the number of funds in our lineup. Traditionally, we’ve always been very conservative and have only offered a few choices.

When we reevaluated the lineup, we considered our choices from our par-ticipants’ perspective. Most of our em-ployees aren’t very sophisticated when it comes to understanding investments, and they often have difficulty making choices.

One of the most important decisions we made was to reduce the number of equity funds in our lineup. First, we cut the number of large-cap options from five to two: one active and one passive. We also dropped two small-cap options in favor of one small/mid-cap blend fund, while continuing to offer one international equity fund. At the same time, we were careful to ensure we were offering great funds at low costs, and also moving away from revenue-sharing.

Overseeing the design and administration of Bemis’ defined contribution and defined benefit plans is global retirement director Melanie Higgins.

Getting to know the Bemis Corporation and its global retirement directorFrom its earliest beginnings printing cotton bags for packing food products, Bemis Company, Inc. has grown into one of the world’s leading suppliers of flexible packaging used by companies in the food, consumer products, medical and pharmaceutical industries.

With headquarters in Neenah, Wisconsin, the firm employs approximately 20,000 people in 12 countries, including 10,000 employees in the U.S. It is one of 500 companies listed among the stocks in the Standard & Poor’s 500 Index.

Overseeing the design and administration of the company’s defined contribution and defined benefit plans is global retirement director Melanie Higgins. Higgins, who was appointed to her current position in December 2012, joined the firm as a benefits administrator in 1999. Since then, she has served in a variety of pen-sion and retirement functions of increasing responsibility. She holds a bachelor’s degree in Business Administration and Human Resources from Carroll University (formerly Carroll College) in Waukesha, Wisconsin.


After these decisions were made, we went through the enrollment process with the advice and support of J.P. Morgan, which has been through these changes many times before. One of the things J.P. Morgan recommended was to do a “teaser” to let our employees know the changes were coming. We also mailed participants a booklet with information on all of the new plan components: the new funds; how existing funds would be mapped; what impact the changes would have on the “do-it-yourselfers” and the people in the managed accounts; and what would happen if people didn’t make any new choices. We then scheduled educational meetings and webinars to provide even more information.

Bill: Do you have any suggestions on how to work more effectively with an investment committee when evaluat-ing potential new funds for a plan?

Melanie: Well, first, I think it’s essen-tial that someone from your human re-sources staff have a presence on the investment com-mittee. This helps build rapport and trust with the com-mittee members.

More impor-tantly, it gives you a “voice” to educate the committee. The members are not necessarily subject-matter experts, and they’re not as familiar with your 401(k) plan or pension regulations, among other things, as you are.

At Bemis, even though I’m not a formal member of the investment committee, I attend all of the meetings. And I always find the members are quite receptive to hearing what’s happening with our em-ployees and to getting detailed informa-tion on our results. We also keep mem-bers up to date on the industry, discuss best practices and reassure them that the proposed changes will be positive for both the employees and the company. All of this information needs to be

“Everything we decide from a plan design perspective is done with an eye toward retirement readiness, and it’s very

encouraging to see the impact these changes have had on the income replacement numbers of our participants.”

- Melanie Higgins

supported by facts, so I always come pre-pared with lots of data, such as how many people generally stay at the auto-enroll level and how many are not taking ad-vantage of the full company match. Facts don’t lie, and you can use them quite con-vincingly to support your arguments. For instance, if 70% of large-sized employers offer certain benefits and you don’t, your committee members should know that.

Bill: So, in general, you haven’t en-countered many obstacles in making changes to your plan?

Melanie: No, we really haven’t. I think it all goes back to what I said before about communicating early and often. You need to make sure everyone understands what you’re doing and why it can help your employees save more.

You also need to let your employees know the company is working in their best interests. We want our employees to take full advantage of all the benefits available to them, including the profit-

sharing plan and the company match. We don’t have any “skin in the game.” In fact, as more people participate at higher levels, Bemis is actually contributing more because of the company match.

Bill: What kind of results have you seen?

Melanie: We are very proud of how our efforts are making a difference. When we compare our current results to when we started this program, the number of nonunion participants now on track to achieve at least 70% income replacement at retirement has increased from 25% to 58%, or more than double where we were seven years ago. And our

results for the union plan have increased from 8% to 21%. That’s almost triple the number of participants on track to replace 70% of their income. Most of this success has been driven by our higher level of deferrals. By first enrolling all of our salaried employees, contributions moved gradually from 3% to 4% and so on. Now, virtually everyone in this group is at 8% or higher. We’ve seen similar results for an automatic enrollment we conducted with people who became Bemis employees as part of a 2010 acquisition. These new employ-ees were auto-enrolled at 3% when they came aboard and are now at contribu-tion rates of 5% and 6%. For me, it’s all about making sure that people have enough money to re-tire. Everything we decide from a plan design perspective is done with an eye toward retirement readiness, and it’s very encouraging to see the impact these changes have had on the income replace-ment numbers of our participants. We’re also pleased that our recent re-enrollment

has put more of our participants into sound, appropri-ate asset allocation strategies that are both well diversi-fied and tailored to the behavior of the participant.

Bill: How do you go beyond the numbers to look at overall financial wellness?

Melanie: We focus a lot on wellness through our assistance programs because we know our employees need to take care of themselves, both mentally and physically. We understand that a lot of things can weigh on people’s minds, and financial issues are one of them. If you live day to day, for example, and can barely pay your bills, it’s hard to justify putting money away for retirement.

So, we focus a lot of our communica-tions on financial wellness and on help-ing people get on track for retirement.


Deliveredmeetings over

meeting days

attendance

Ultimately, though, many of our people may not necessarily do what we suggest. But there will always be at least one per-son who we’ll touch with our efforts. It’s gratifying to know we can make a huge difference in a person’s life and future.

Bill: Are you considering any other changes to your retirement plan?

Melanie: We continue to monitor what’s happening in the industry, and we keep an eye on possible new regulations, as well as other options that may affect our plan.

We’re also considering a number of en-hancements that are probably farther off on the horizon. One is a brokerage win-dow capability and another is the possibil-ity of offering an annuity within the plan.

We’d also like to offer more advice, es-pecially for employees who are getting closer to retirement age. For example, think about people in their late 60s who want to retire and have each saved $500,000 in the plan. Is that enough? How much can they withdraw without

worrying about depleting their savings? These people have clearly done many

things right, and now they don’t want to make a mistake at the 11th hour, which is when many people do make bad decisions. They may withdraw too much too soon. Or they retire too soon because they think they’ll have enough money, and then they realize they don’t have enough. There’s not a lot of advice available to help and support people like

this, and I think plan sponsors need to do much more in this area going forward.

Bill: If you could give only one piece of advice to a plan sponsor about how to improve its plan, what would that be?

Melanie: I think fear is something that holds people back, so I’d say, “Don’t be afraid to go for it!”

You need to do what you think is best for your employees. Don’t worry too much about how they’ll react or how they may question your actions.

When and if the time comes, you can deal with any feedback, but I assure you it will be a lot less than you’d expect, es-pecially if you’re communicating with them throughout the entire process.

Honestly, some of our employees don’t always appreciate the changes we make,

and I haven’t always been seen as the “good guy.” But I don’t think these same employees are going to complain when the time comes for them to retire and they have enough money to do so comfortably. I always say, “It’s okay to make tough decisions now, because our employees are going to be thankful later.”

As of August 2013.

“I think fear is something that holds people back, so I’d say, don’t be afraid to go for it!” - Melanie Higgins

170

54

42.5%

Resulting in a increase in attendance over the goal of

25%

70%

RESULTS:BEST PRACTICES: BOOSTING ATTENDANCE AT RE-ENROLLMENT MEETINGSWhen Bemis Company, inc. decided to change the default option of its overall retirement program, it opted to conduct a re-enrollment of all its eligible employees.

One important way in which the frm worked to aid employee understanding of the changes and to increase plan participation was to encourage strong attendance at its educational and enrollment meetings. With the help and support of J.P. Morgan Retirement Plan Services, Bemis developed a promotional campaign to boost employee attendance. its goal: increase participation for onsite meetings from 10% (the typical attendance at similar educational meetings held in the past) to 25%.

AMONG THE INITIATIVES IMPLEMENTED BY THE COMPANY:

• Build the level of engagement among site managers at meeting locations across the country through a targeted marketing communications campaign about the re-enrollment process and the new default options.

• Conduct exclusive webinars for site managers, providing information to help employees understand and accept the changes.

• Award prizes, such as J.P. Morgan duffel bags, to the managers of the three sites with the highest participation rates.

• Create different types of campaign collateral, such as surveys, webinars, e-messaging and posters, as well as giveaways, such as candy bars, buttons and other items.


First introduced 20 years ago, target date funds (TDFs) now rank as one

of the most popular retirement investment options in America, thanks,

in particular, to their growing use in defined contribution (DC) plans.

Understand Target Date Funds


While these numbers may seem to validate plan sponsors’ belief that TDFs are a good fit for their plans (because they offer investors easy access to professional management and diversification that adjusts over time), several research studies show that, despite the industry’s best efforts, many investors apparently do not understand what they are investing in or how TDFs actually work. In one well-publicized survey released by the Securities and Exchange Commission (SEC) in February 2012, only 36% of respondents correctly identified that a TDF does not provide guaranteed income in retirement. In addition, the study revealed that fewer than one-third of respondents were able to identify the correct meaning of the year in the fund’s name.

Understanding target date fundsMany DC providers believe the key to solving this gap in knowledge is to provide even more information about target date strategies to plan participants. Yet others question how this simple approach will help when, according to research conducted by J.P. Morgan, many participants are not paying attention to the information they already receive. For example, a recent study2 by J.P. Morgan of 401(k) participants revealed that about three-quarters of respondents say they don’t take the time to read all of the investment information that is currently provided to them. And 44% say they are already getting more information than they can absorb.

To help educate participants, J.P. Morgan has undertaken a new ini-tiative that builds on best practices in retirement communications to establish a higher standard for helping investors understand target date strategies. As a re-sult, the firm launched a program comple-menting its JPMorgan SmartRetirementSM series of TDFs that focuses on four im-portant things prospective and existing investors need to know: what TDFs are, how they work, who they are designed for and how to select the fund that is most appropriate for their needs.

“Given the growing importance of TDFs in plans, we developed this pro-gram to specifically address gaps in par-ticipant knowledge,” says Catherine Peter-son, director of Retirement Insights for J.P. Morgan Asset Management. “This is

Since the end of 2005—the year before the Pension Protection Act set the stage for the explosive growth of TDFs—total TDF assets have grown from $71 billion to approximately $378 billion (as of 2011).1

By 2015, McKinsey & Company estimates that target-driven solutions will account for roughly $2.2 trillion in assets, or nearly 40% of all DC assets.

$378 billion

$2.2 trillion

$71 billion

2005 2011 2015 (est.)

1 Target-Date Series Research Paper: 2012 Industry Survey, Morningstar Fund Research, May 2012.2 J.P. Morgan 2013 Plan Participant Survey.


For additional information, contact your J.P. Morgan representative.

A new way of looking at target date fundsin seeking to increase investors’ understanding of target date strategies, J.P. Morgan’s new SmartRetirement communications program uses easy-to-understand terminology supported by animation and infographics.

Materials can be used by plan sponsors with all of their plan participants, regardless of whether the SmartRetirement Funds are already part of the company’s plan or are being offered for the frst time.

Resources include:• Brochure

• Website: www.jpmorgansmartretirement.com

• One-page fund profiles (by share class)

• Participant presentation

• Sample re-enrollment newsletter

Because J.P. Morgan believes this

information is valuable to all prospective

and existing TDF investors, the firm is

making this program available to all of

its JPMorgan SmartRetirement clients,

regardless of which recordkeeper is

servicing their plans.

“i hold out hope that the net result of ‘auto everything’ and the massive shift from DC to QDiAs (namely TDFs) will not only result in more retirement-ready participants but also in more engaged participants.”

- Scott Matheson CAPTRUST Financial Advisors

particularly important because research continues to show that, while DC plan participants want access to TDFs for re-tirement savings, they do not understand some of the most basic components of how these funds work.”

According to Peterson, the new suite of educational resources is distinguished by its fresh, creative approach to addressing the most important things investors need to know about TDFs.

For example, the program includes a dynamic website that features an animated video explaining how a glide path works (go to www.jpmorgansmartretirement.com for the answer), as well as taped comments from individuals about why

they are already invested in TDFs or are thinking about investing in TDFs. In addition, an “infographic-style” brochure has been created to present complex information in a simple and highly visual manner.

The program also supports the needs of many different types of investors who may want to know more about target date strategies. For example, for those individuals trying to make a decision about TDFs, the program is designed to help them quickly understand if a solution is right for them and how to select a fund. And for those participants who have been defaulted into a target date strategy, the materials can be particularly valuable in helping them understand what they are now investing in.

“At the same time,” says Peterson, “the program offers important benefits for retirement advisors and plan sponsors. First, the resources available through the program may be leveraged to fit a retire-ment plan’s specific communications strategy. Second, the program addresses the needs of different types of plan inves-

tors, including those who prefer to hand off their investment decisions to others (‘delegators’), as well as those who prefer to make decisions themselves (‘do-it-your-selfers’). And, finally, the program can be used to potentially increase participants’ understanding of TDFs over time.

“Considering the critical role that TDFs play in 401(k) plans and successful retirement outcomes, we think it is very important for plan sponsors to apply these best practices to their participant communications,” says Peterson. “It’s time to raise the bar on TDF communications and ensure the industry takes every opportunity to educate and inform investors in a way that is accessible and understandable.”

“i believe at the heart of every fduciary decision is a single question: ‘Will it help plan participants?’ educating participants about TDFs gives them confdence to make the right decisions that will improve their ability to retire with dignity.”

- Kathleen A. Kelly Compass Financial Partners, LLC

http://www.jpmorganfunds.com/jpmfpages/insightslibrary&rmid=1323364590502&tafid=OC6ywO&source=sharedasset&mcaction=detail

http://www.jpmorganmartretirement.com

https://www.jpmorganfunds.com/blobcontent/862/116/1323360841104_Infographic.pdf


What Plan Sponsors Want From Their DC Plans—And What They Are Doing About itJ.P. Morgan’s inaugural 2013 Defined Contribution Plan Sponsor Survey Findings


What do plan sponsors want to accom-plish with their DC plans today? What goals and philosophies are driving their decision making? And how are they shaping the design, investment lineup, communications and administration of their DC plans to meet the growing re-tirement needs of employees while con-tinuing to fulfill their role as fiduciaries?

To answer these questions, J.P. Morgan Asset Management conducted its first plan sponsor survey in the period from December 2012 through January 2013. We canvassed nearly 800 plan spon-sors—all key decision makers—repre-senting plans with assets from under $1 million to more than $1 billion.

Our findings indicate that plan spon-sors are clearly committed to achiev-ing a range of “highly important” goals through their DC plans. These aspira-tions include the traditional and also shorter-term objectives of recruiting and

retaining quality employees and dem-onstrating a level of caring for

them. But plan sponsors are equally committed to help-ing employees achieve the

long-term goal of a financially secure retirement. As exhibited

most clearly by the larger plans in our survey (those with assets greater than $250 million), plan sponsors are taking steps to fortify their plans to improve participants’ retirement outcomes.

While larger plans lead the continued transformation of DC plans, changes are taking place at a modest pace for

the group as a whole. On the positive side, more than 75% of all plan spon-sors (and 85% of those with larger plans) rate having their plan “help make sure employees have a financial-ly secure retirement” as one of today’s “highly important” goals. In addition, plan sponsors appear to be moving to-ward success criteria that align with the goals of retirement outcome, and they are factoring these goals into communi-cations and plan design decisions.

On the other hand:• Only 44% consider the “percent-

age of participants whose account balances are on track to replace at least 80% of their final salary in retirement” as a “highly impor-tant” criteria by which to measure plan effectiveness. “Employee/participant satisfaction level” and “investment performance” are the most frequently cited measures of plan success.

•Only 25% see “promoting an un-derstanding of the amount of in-come participants are on track to receive in retirement” as among the “top three” goals for plan com-munications. Twice as many give the top spots to “educating em-ployees about the benefits of the plan” or “having employees view the plan as a benefit.”

• Twice as many say they base plan design decisions on what they perceive to be “participant needs” (29%) or on “cost to the company” (28%), versus “getting the maxi-mum number of participants to experience adequate income in retirement” (11%).

•Roughly 65% to 75% feel that their DC plans have been “highly effec-tive in recruiting, retaining and demonstrating a level of caring for employees,” while only about 50% to 60% say their plans are “highly effective in providing financial security for employees, helping to ensure that employees have a financially secure retirement and allowing employees to retire at their normal retirement age.”

A more concrete indication that plan sponsors’ actions may not be evolving as quickly as their plan objectives is the rate of adoption of innovative plan features designed to help participants achieve a financially secure retirement. It is encouraging that target date funds (TDFs) and automatic enrollment have been embraced by the majority of larger plans, and also that close to half of these plans are using automatic contribution escalation. But imple-mentation has been slower for plan sponsors overall, with less than half using TDFs and automatic enrollment and even fewer employing automatic contribution escalation or conducting re-enrollments into their qualified de-fault investment alternatives (QDIAs).

Our survey findings highlight one of the key challenges for plan sponsors: evolving their DC plans to attract, re-tain and ensure a high level of satis-faction among employees today, while helping employees achieve a satisfac-tory retirement lifestyle tomorrow.

Results from our survey suggest that

EVOLUTIONARY—NOT REVOLUTIONARY—CHANGE

OUR FINDINGS INDICATE THAT PLAN SPONSORS ARE CLEARLY COMMITTED TO ACHIEVING A RANGE OF “HIGHLY IMPORTANT” GOALS THROUGH THEIR DC PLANS.

The past 30 years have witnessed an incredible transformation in defned contribution (DC) plans. Once merely a supplementary beneft, DC plans have become the cornerstone of retirement security for an expanding proportion of America’s workforce.

THE RETIREMENT CHALLENGE



fied with the implied loss of control.)• Research shows that those who

choose the “do-it-yourself” route tend to have results that underper-form the results achieved by those who select the TDF approach.1

Despite these findings, fewer than 25% of plan sponsors describe their philosophy on driving participant decisions as “placing participants on a strong savings and investing path” (versus “focusing on participants mak-ing their own choices”).

While our survey of plan sponsors in-dicates that only 25% consider promot-ing the use of this outcome-oriented information as an important “goal” for their DC plan communications, our research shows that exposure to such personal income replacement projec-tions can improve individuals’ income replacement rates, as well as the per-centage of the plan’s participants on track to receive an adequate level of income in retirement.

Our survey results indicate that more than half of plan sponsors are not fully aware of the potential to receive fiduciary protection under the Pension Protection Act of 2006 when they en-gage in a plan re-enrollment. Greater clarity on this issue could lead more plan sponsors to pursue re-enrollment, which might dramatically improve a plan’s asset allocation.

success will require dispelling miscon-ceptions that may be impeding DC plan evolution, as well as a collaborative ef-fort among all parties involved—partic-ipants, plan sponsors, providers, advi-sors, consultants and policymakers—to improve participant outcomes.

The following true/false queries highlight how important it is for plan sponsors to: •Understand participant behavior• Stay on top of developments in

plan design• Be informed of plan sponsor

best practices• Take advantage of policy changes

designed to offer them protection in their role as fiduciaries

Our survey findings indicate that most employees feel they need guid-ance and are generally accepting of plan features that can simplify their investment decision making.•More than half of participants say

they do not have enough talent to plan for retirement on their own, and many are overwhelmed by the amount of information they already receive.

•Results from a separate J.P. Morgan study, the 2013 Plan Participant Sur-vey, find that more than 60% of em-ployees “favor” or are “neutral” on offering a combination of automatic enrollment and automatic contribu-tion escalation features. (Plan spon-sors may be underestimating the level of participant support for these features, since the most frequent reason given by plan sponsors for not introducing automatic enroll-ment and automatic contribution escalation features is a concern that employees would not approve and would then, presumably, be dissatis-

Providing more Americans with the experience and satisfaction of a secure retirement calls for the continued evo-lution of DC plans, best accomplished with all parties questioning prior as-sumptions and actively contributing to improved outcomes. Participants need to save more and be more engaged in planning for their retirement. Employ-ers must continue to strengthen their plans, balancing the goals of ensuring employees’ current satisfaction with helping employees achieve long-term satisfaction in retirement.

Policymakers, in our view, must con-tinue to motivate individuals to save and invest, as well as help employers shoulder the fiduciary responsibilities involved in providing retirement se-curity to their employees. And, finally, plan providers, as well as advisors and consultants, can play a crucial role by working with plan sponsors to design and develop plans that address em-ployers’ goals, incorporate appropriate innovative design features, leverage pol-icymakers’ support and educate and en-courage employees to save and invest.

For more insight on how plan sponsors are view-ing and evolving their DC

plans, visit www.jpmorganfunds.com/retirement to access the 2013 Defined Contribution Plan Sponsor Survey Findings: Evolving toward greater retirement security. A related video of the fndings is also available on the website.

1 J.P. Morgan Retirement Plan Services propri-etary research; period of analysis is December 31, 2009, to December 31, 2012.

A COLLABORATIVE EFFORT

PERCEPTION VERSUS REALITY

employees would rather make all their own decisions. FALSE

Promoting an understanding of the amount of income participants are on track to receive in retirement can be a powerful motivator for improv-ing participant saving and investing behavior. TRUE

Participant assets defaulted into a plan’s QDiA during a re-enrollment would ex-pose plan sponsors to increased fdu-ciary risk. FALSE

T FORTRUE OR FALSE?

2013 Defined Contribution Plan Sponsor Survey Findings

Evolving toward greater retirement security

RETIREMENTINSIGHTS


http://funds-imcms.jpmchase.net/jpmfpages/topics&rmid=1323366078035&tafid=mXhq8y&source=sharedasset&mcaction=detail

http://www.jpmorganfunds.com/retirement



NEW RETIREMENT STUDY EMPHASIZES THE IMPORTANCE OF DILIGENT, ‘EARNEST’ SAVING


In a new study called “The Impor-tance of Being Earnest” (which he co-authored with a team of J.P. Morgan investment and retirement experts), Cembalest unveils the findings of new research that can be used by defined contribution (DC) plan sponsors and their advisors to understand and re-inforce how plan participants can bet-ter reach their retirement goals. Here are highlights from an interview with Cembalest about the findings.

JOURNEY: Let’s start with the ques-tion that’s probably on most people’s minds. Why did you name your paper “The Importance of Being Earnest”?

CEMBALEST: Oscar Wilde wrote a play by that name in the late 19th cen-tury in which the actions of one of the main characters—a gentleman who pretends to be someone named “Er-nest,” but whose behavior is anything but “earnest”—represent many of the ironies of life in Victorian London.

If the play were written today, Wilde could well be talking about retirement. That’s because, while most people can plainly see how important it is to plan for retirement, they may find that what they see in front of them may not be as straightforward and forthright as it seems.

JOURNEY: Why isn’t it so straight-forward? CEMBALEST: Families planning for retirement today face very different dynamics from previous generations. Because of rising life expectancies and

uncertain U.S. fiscal policy, people are now shouldering a greater responsibil-ity for funding their own retirements.

JOURNEY: How do you address these new responsibilities in your study?

CEMBALEST: The study analyzes the challenges facing both median-income and affluent families who are planning for retirement and provides insight into the strategies needed to ensure an appropriate level of retirement income.

Our goal was to develop an analytical model that would take a fresh perspec-tive in studying these issues. It also de-tails scenarios that could adversely affect outcomes without proper planning.

JOURNEY: What were your most im-portant conclusions?

CEMBALEST: First, the study confirms how critically important a 401(k) is as a retirement savings vehicle and source of retirement income for both median-income and affluent earners. Higher limits and employer matches make these vehicles more effective in accu-mulating retirement assets than IRAs

and other after-tax savings vehicles.Many Americans now live for two to

three decades after they retire. Without adequate planning, some may struggle to create sufficient savings and post-re-tirement income and, subsequently, may suffer declines in lifestyle. The value of a 401(k) plan can mean the difference between a high level of retirement pre-paredness and significant financial stress.

Second, the research shows once again how critical it is to find the proper balance between savings and consump-tion, as well as an appropriate level of portfolio risk.

For example, there are a number of different actions—highly conservative investing over the long term, excess spending and the early withdrawal of retirement benefits—that can seriously harm any portfolio, as well as significant-ly erode retirement savings.

JOURNEY: But isn’t it possible for peo-ple to take new actions that can get their retirement planning back on track?

CEMBALEST: If you “undersave,” there really isn’t any investment rate you can realistically expect that will let you

Michael Cembalest, chairman of market and investment strategy for J.P. Morgan Asset Manage-ment, believes the key to a suc-cessful retirement is to get into the habit of saving at a young age and then continue to save and invest for a lifetime.

R E T I R E M E N T

Portfolio

risk

Cons

umpt

ionTO

TA

L C

ON

T R O L

S O M E C O N T R O L

O U T O F YOU

R C

ON

TR

OL

vs. s

avin

gs

Longevity

Employment:

earnings andduration

Market returns

Policy regardingtaxation, savings& entitlem

ents

T H E R E T I R E M E N T E Q U A T I O N



“earn” yourself out of the hole you’re in. That’s why it’s so important to take retirement planning seriously when you’re young.

The good news, however, is that, with enough time and diligence, a secure retirement is possible for those who plan carefully, save consistently and invest efficiently.

JOURNEY: How do you bring these im-portant messages to life in your research?

CEMBALEST: The study provides sce-narios leading up to and through retire-ment for two prototypical families—one with median income, the other affluent (earning six times the median income)—that illustrate many of the challenges faced by those who don’t take retirement planning seriously.

In using these examples, we illus-trate complex financial issues in a very real and compelling way, helping to demonstrate how these issues can affect many individuals.

JOURNEY: Do your findings vary de-pending on a person’s income?

CEMBALEST: Yes, but our overall recommendation never changes: It’s important for all people to plan and save for retirement.

At the same time, however, there are some key differences in how cer-tain factors such as government policy may impact individuals with varying levels of income.

For instance, it’s estimated that for median-income families, approximately 75% to 85% of retirement cash flow will come from Social Security. This means the potential impact of fiscal and re-tirement policy changes on retirement income for these earners should be rela-tively minimal. While savings are still important for these families, they can still be well positioned to replace the in-come they need for a secure retirement as long as they spend and invest wisely.

For affluent families, Social Security

will make up a much smaller portion of their retirement income. This means the impact of any changes to retirement and fiscal policy will likely have a more signifi-cant impact on their retirement income.

While there are a number of vari-ables outside of their control, affluent families are still in command of other important considerations that can positively impact their savings, such as savings rates and risk exposure. As a result, affluent families need to accumulate enough savings to main-tain their standard of living up to and through retirement.

JOURNEY: How can someone truly get a handle on saving for retirement when there are so many variables to consider?

CEMBALEST: Generally speaking, re-tirement income is a by-product of three things: factors that you cannot control (such as market returns and taxes, as well as entitlements such as Social Security and Medicare); factors you can control in part (such as longevity and employment); and factors over which you have total control (such as the amounts you save and spend). And it is critical for any investor to do his or her best to control those factors that can be controlled, while ignoring the rest.

JOURNEY: How can plan sponsors and their advisors make use of these findings?

CEMBALEST: This study can be a help-ful tool for employers and advisors in demonstrating how third-party research validates many of the approaches they are recommending. These results can help them continue to encourage effec-tive savings and investment behaviors to put their participants on the right path to reaching their retirement goals.

Clearly, being earnest about invest-ing and saving and also reassessing the viability of a retirement plan are two actions that can positively impact a person’s ability to save for retirement.

Michael Cembalest is chairman of market and investment strategy for J.P. Morgan Asset Management. In this role, he is responsible for leading the strategic market and investment insights across the firm’s Institutional, Funds and Private Banking businesses.

Cembalest is also a member of the J.P. Morgan Asset Management Investment Committee and a member of the Investment Committee of the J.P. Morgan Retirement Plan for the firm’s 260,000 employees. Most recently, he served as chief investment officer of the firm’s Global Private Bank. Cembalest joined the company in 1987 in the Corporate Finance division.

He earned an M.A. from the Columbia School of International and Public Affairs and a B.A. from Tufts University.

“The importance of Being earnest” analyzes the unique challenges facing both median-income and affluent families planning for re-tirement. This year, the paper was recognized for its “excellence and thought leadership” in the retirement industry by winning RiiA’s 2013 Retirement income Communications Award for printed materials.

MEET MICHAEL CEMBALEST

“ THE IMPORTANCE OF BEING EARNEST ”—AWARD-WINNING INSIGHTS

INVESTMENTINSIGHTSRETIREMENTINSIGHTS THE IMPORTANCE OF BEING EARNEST

Implications of saving, investing and future policy changes on today’s retirement investor

Contact your J.P. Morgan representative to receive a copy of this study.





J.P. M

orga

n 20

13 D

efine

d Co

ntri

butio

n Pl

an S

pons

or S

urve

y Fi

ndin

gs

Retirement plans by the numbers

Only 44% of plan sponsors say the “percentage of participants with account balances on track to replace at least 80% of their final

salary in retirement” is an important criteria for evaluating the success of their DC plan.

Only ½ of plan sponsors rate their plan as effective in “helping make sure employees have a financially secure retirement.”

56% OF PLAN SPONSORS ARE UNSURE WHETHER OR NOT THEY WILL RECEIVE FIDUCIARY PROTECTION FOR PARTICIPANTS WHO ARE DEFAULTED INTO THEIR PLAN’S QDIA DURING A RE- ENROLLMENT.

Almost 60% of plan sponsors said they have a “very high sense of responsibility for the overall financial wellness of their employees.”

Only 5% of plan sponsors are “extremely confident that their participants have the appropriate asset allocation.”

Nearly 1/3 of plan sponsors don’t fully understand the methodology

used to construct the target date fund in their DC plan.


MORNINGSTAR DISCLOSURE: ©2013, Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is propri-etary to Morningstar and/or its providers; (2) may not be copied or distributed; (3) is not war-ranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damage or losses arising from any use of this information. For each fund with a three-year history, Morningstar calculates a Morningstar Rating™ metric each month by subtracting the return on a 90-day U.S. Treasury Bill from the fund’s load-adjusted return for the same period, and then adjusting this excess return for risk. The top 10% of funds in each broad asset class receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The Overall Morningstar Rat-ing for a fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. Past performance is no guarantee of future results. Different share classes may have different ratings.

Recordkeeping and administrative services for the retirement plan provided by J.P. Morgan Retirement Plan Services LLC (J.P. Morgan); securities transactions for the retirement plan may be introduced by registered representatives of J.P. Morgan Institutional Investments Inc. (JPMII), member FINRA/SIPC. Retirement brokerage services are offered by J.P. Morgan Securities LLC (JPMS), member FINRA/NYSE/SIPC. J.P. Morgan, JPMII, and JPMS are affiliates of JPMorgan Chase & Co. Certain recordkeeping and administrative services for plans may be provided on behalf of J.P. Morgan Retirement Plan Services LLC (J.P. Morgan) by FASCore, LLC (FASCore).

Securities transactions are affected by an affiliate of FASCore: GWFS Equities, Inc. (GWFS), a registered broker-dealer and member of FINRA. For transactions involving units of collective investment trusts, GWFS is also a member of SIPC. GWFS and FASCore are independent enti-ties and are not affiliated with J.P. Morgan. If retirement brokerages services are available in the Plan, those services are offered by Charles Schwab & Co, Inc. (Schwab). Schwab receives fees for providing these services and is not affiliated with J.P. Morgan, FASCore or GWFS.

J.P. Morgan Retirement Plan Services LLC and its affiliates and agents may receive compen-sation with respect to plan investments, including, but not limited to, sub-transfer agent, recordkeeping, shareholder servicing, 12b-1 or other revenue-sharing fees.

Contact JPMorgan Distribution Services at 800-338-4345 for a fund prospectus. You can also visit us at www.jpmorganfunds.com. Investors should carefully consider the investment objectives, risks, charges and expenses of the mutual funds before investing. The prospectus contains this and other information about the mutual fund. Read the prospectus carefully before investing.

This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for investment, accounting, legal or tax advice.

Diversification does not assure a profit nor does it protect against loss of principal. Diversifi-cation among investment options and asset classes may help to reduce overall volatility.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than original cost. Past performance is no guarantee of future results.

Certain underlying Funds of the Target Date Funds may have unique risks associated with investments in foreign/emerging market securities, and/or fixed income instruments. Interna-tional investing involves increased risk and volatility due to currency exchange rate changes, political, social or economic instability, and accounting or other financial standards differ-ences. Fixed income securities generally decline in price when interest rates rise. Real estate funds may be subject to a higher degree of market risk because of concentration in a specific industry, sector or geographical sector, including but not limited to, declines in the value of real estate, risk related to general and economic conditions, changes in the value of the underlying property owned by the trust and defaults by the borrower. The fund may invest in futures contracts and other derivatives. This may make the Fund more volatile. The gross expense ratio of the fund includes the estimated fees and expenses of the underlying funds.

J.P. Morgan Asset Management is the marketing name for the investment management businesses of JPMorgan Chase & Co. and its affiliates worldwide. Those businesses include, but are not limited to JP Morgan Chase Bank, N.A., J.P. Morgan Investment Management Inc., Security Capital Research and Management Incorporated and J.P. Morgan Alternative Asset Management, Inc.

J.P. Morgan Funds are distributed by J.P. Morgan Distribution Services, Inc. (JPMDS) and of-fered by J.P. Morgan Institutional Investments, Inc. (JPMII); both affiliates of JPMorgan Chase & Co. Affiliates of JPMorgan Chase & Co. receive fees for providing various services to the funds. JPMDS and JPMII are both members of FINRA/SIPC.

J.P. Morgan Mutual Funds, JPMorgan Chase & Co. and its affiliates do not provide legal or tax advice. Consult your legal or tax advisor for advice specific to your situation.

iRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

At J.P. Morgan Asset Management, we put our best thinking from across our organization to work to

strengthen the ability of advisors, plan sponsors and individuals to meet today’s retirement challenges.

Our experience, resources, tools and insights make us well equipped to impact retirement outcomes.

jpmorgan.com/retirement

Opinions and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice. The views and strategies described may not be suitable for all investors.

iRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

J.P. Morgan Asset Management is the marketing name for the asset man-agement businesses of JPMorgan Chase & Co. and its affiliates worldwide. JPMorgan Distribution Services, Inc., member FINRA/SIPC.

© 2013 JPMorgan Chase & Co. All rights reserved.

We believea stronger future begins with a thoughtful partner.

To start building a stronger retirement future, please contact your J.P. Morgan representative

or call 1-877-576-4632.

J.P. Morgan Asset Management 270 Park Avenue New York, NY 10017-2014

Return Service RequestedINST-JMAG-20

Retirement Insights and Solutions from J.P. Morgan Asset Management

Retirement Insigns and Solutions from J.P. Morgan Asset Management

Economy & Finance

Transcript of Retirement Insigns and Solutions from J.P. Morgan Asset Management