The
Neuberger Berman Flexible Select Fund was debuted by Neuberger Berman. The
all-cap equity mutual fund seeks risk-adjusted returns with lower volatility.
The
fund accesses the top ideas from the less-benchmark constrained equity teams at
Neuberger Berman. Neuberger Berman
Flexible Select Fund is a long-only, actively managed diversified fund that
combines the top holdings from multiple equity teams at the firm focused on absolute
return.
The fund will employ 17 to 20 distinct portfolio management
teams at Neuberger Berman that manage assets primarily for high-net-worth
clients. The fund has the ability to invest in cash and bonds as
necessary, based on the underlying asset allocations of the various portfolio
management teams. Tickers for the fund are NFLIX, NFLAX and NFLCX.
Rebecca Moore, senior editor at
PLANSPONSOR, spoke with Bob Tomaschko, senior director of compensation,
retirement and HRMS at Land O’Lakes, and Greg Long, executive director at the
Federal Retirement Thrift Investment Board, during a panel at the PLANSPONSOR
National Conference about the issues that can plague plan sponsors.
One aspect of the retirement plan
industry has been subject to media coverage and documentaries: fees. In the
wake of the Employee Retirement Income Security Act (ERISA) Section 404(a)(5)
participant fee disclosure regulations, there was much expected calamity.
However, when Moore asked the audience how many received push back or questions
from plan participants, she was met with a low rumble of laughter. Although the
participant backlash has not occurred, plan sponsors should remain diligent
about reviewing their fees and making sure they are reasonable, Long and
Tomaschko stressed.
The study of behavioral economics
has led to the evolution of an “ ‘auto’ everything” retirement plan culture.
Long argued that this development has been very effective, and he anticipates
that nearly 90% of his participants will be able to retire with dignity as a
result. “As plan sponsors, we are choice architects now,” he said. “You want to
make the right choice the easy choice.”
Tomaschko agreed, and urged the
panel attendees to look at this from a participant perspective. He does not
think plan sponsors have become more paternalistic, and believes “helping
people be comfortable retiring when they want to retire [is] the right thing to
do.”
What Don’t Participants Know?
A recurring theme of the discussion:
Participants don’t know what they don’t know. “How many participants think bond
prices don’t go down?” Long asked. Too many. “How many of your participants
have a specific, measurable, actionable goal?” Not enough.
The focus on account balance is
misguided, Long said. Participants should look at that their retirement income
will be, not at a lump sum. According to Long, “If we can change the focus in
participants’ heads, that will change behavior.”
Tomaschko noted that Land O’Lakes’
search for a perfect-for-participants annuity product has become an ongoing
project. Until they find that solution, he says, better education is a must.
When many participants consider making withdrawals from their retirement
savings, which not many do, they imagine taking 10% of their balance annually,
a rate Tomaschko said is far too much. As participants retire, Long added, some
will keep their savings in the plan, while others will roll their funds into an
individual retirement account (IRA). It is important, he said, to ensure that
they are making that decision with their eyes wide open.
The behavioral change necessary for
Americans to be able to retire comfortably and with dignity is massive, Long
said, and will take decades to implement and to produce results. Faced with
that challenge ahead, Long said: “Let’s get started.”
Unfortunately, most people have
neither time for nor interest in their retirement plans, Tomaschko noted. “If I
have five minutes to watch a video on large-cap versus small-cap funds, or a
cat playing with a squirrel, I’m going to look at the squirrel,” he said.
Employees are likely to do the same, and need plan sponsors to help them make
the best choices to improve their retirement readiness.