Products February 21, 2008

DoL Unveils Retirement Planning Worksheets

The Department of Labor (DoL) has unveiled a set of interactive worksheets to help workers with retirement savings decisions.
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A DoL news release said the set of interactive worksheets was developed as a companion to the agency’s 2006 publication “Taking the Mystery Out of Retirement Planning.”

The worksheets allow those 10 to 15 years from retirement to calculate their income and savings as well as their projected expenses in retirement. Although targeted to individuals approaching retirement, the worksheets and booklet are also useful for recent retirees, the agency said.

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The worksheets are located here. The booklet can be viewed here.

The Markets February 21, 2008

Dow Jones Introduces Benchmarks for Lifecycle Funds

Dow Jones Indexes has launched the Real Return Target Date Indexes, a series of indexes designed to serve as benchmarks for lifecycle portfolios.
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Each index in the Dow Jones Real Return Target Date Indexes series represents a mix of sub-indexes representing stocks and bonds, Treasury Inflation Protected Securities (TIPS), as well as commodities and real estate, which potentially counterbalance inflation, according to the company. Industry experts were consulted on the design of the Dow Jones Real Return Target Date Indexes, and an advisory board is being formed for continued oversight.

The Dow Jones Real Return Target Date Indexes comprise 11 indexes, nine with target dates in five-year intervals out to 2045, a Dow Jones Real Return 40+ Index, and a Dow Jones Real Return Today Index, the announcement said. Each index is a composite of sub-indexes that represent stocks, bonds, TIPS, commodities and real estate securities – the Dow Jones Wilshire Global Total Market Index, Lehman Aggregate Bond Index, Lehman U.S. TIPS Index, Dow Jones-AIG Commodity Index, and Dow Jones Wilshire Real Estate Securities Index.

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The component asset classes are weighted within each Dow Jones Real Return Target Date Index to measure a targeted level of risk. Stocks and bonds are classified as nominal assets with high- and low-risk profiles, respectively; real estate securities and commodities are considered real assets with high-risk profiles; and U.S. TIPS are considered real assets with a low-risk profile. Over time weighting of the asset classes are adjusted based on predetermined formulas to adjust the risk level systematically as the index’s target date approaches.

“As more plan sponsors pursue target date strategies in light of the Pension Protection Act, market participants require more choice when selecting their benchmarks. The Dow Jones Real Return Target Date Indexes are differentiated because they include a diversified mix of asset classes as well as measure inflation-adjusted performance, or the “real’ return, of a target date portfolio,” said Michael A. Petronella, president of Dow Jones Indexes, in the company announcement.

More information on the Dow Jones Real Return Target Date Indexes can be found at www.RealReturnIndexes.com.

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