“People want simplicity,” Edward Eng, senior vice president of product development at John Hancock Retirement Services, told PLANSPONSOR.com in an interview. “All you have to do is give us a birth date and a retirement date.”
Eng explained that lifestyle funds are on the other end of the spectrum from those plans that require participants to choose the mutual funds in which they want to invest. Rather, lifecycle funds are for those that do not even want to consider the level of risk they can absorb – a level of investment sophisdication that is required for lifestyle funds.
The Toronto-based provider is riding on the success of its lifestyle funds to propel the take-up rate of its new target date offerings.
Currently John Hancock’s 401(k) business is split 50/50 between lifestyle participants and those choosing their own funds. With the opening of the new target date funds, the company is hoping to attract companies with participants who want to hand off all of the investment option responsibility, according to Eng.
The Retirement Portfolio aims to provide more investment stability throughout retirement in volatile markets and offer a low probability of negative returns in any 12-month period, the company said.
The new target date funds are:
- John Hancock Lifecycle 2045 Portfolio
- John Hancock Lifecycle 2040 Portfolio
- John Hancock Lifecycle 2035 Portfolio
- John Hancock Lifecycle 2030 Portfolio
- John Hancock Lifecycle 2025 Portfolio
- John Hancock Lifecycle 2020 Portfolio
- John Hancock Lifecycle 2015 Portfolio
- John Hancock Lifecycle 2010 Portfolio.