The Journey Toward Reaching Retirement Readiness

John DoyleSenior Vice President, Senior Retirement Strategist

Capital Group | American Funds

Audience QuestionDo you consider Retirement Readiness one of the objectives of your plan and benefits?

1. Yes, but not measured

2. Yes-success measurements in place

3. Not specifically-up to participants

4. No-don’t look at it that way

Audience QuestionHow is Retirement Readiness measured within your plan?

1. Participants are surveyed once a year

2. Using projected replacement-income ratios

3. Measured by a different method

The Journey Toward Reaching Retirement Readiness

• 10,000 baby boomers retire every day*• Government programs are dangerously in the red• Retirement savings shortfalls abound• Employers may bear the burden when employees

can’t afford to retire

*Pew Research Center and Social Security Administration

What can you do?

• Understand the role of your plan in retirement readiness

• Solve for both wealth accumulation and for retirement income

• Keep it simple

What makes a DC plan successful?

Participation rate

Savings rates

Investment results

Retirees staying in plan

► Set goals

► Influence what you can

► Measure the impact

Success measures

Participation rates• Auto-enroll

— New— Existing

Investment results• Investment

re-enrollment• Re-evaluate QDIA

Savings rates• Default savings rate• Match change• Auto-escalate rate

Retirees staying in plan• Use of post-retirement

options• More retirees staying

in plan

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.

The statements expressed herein are informed opinions, are as of the date noted, and are subject to change at any time based on market or other conditions. They reflect the view of an individual and may not reflect the views of others across the organization. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation. Permission is given for personal use only. Any reproduction, modification, distribution, transmission or republication of the information, in part or in full, is prohibited.

Content contained herein is not intended to serve as impartial investment or fiduciary advice. The content has been developed by Capital Group, which receives fees for managing, distributing and/or servicing its investments.

Securities offered through American Funds Distributors, Inc.

© 2018 Capital Group. All rights reserved.

Craige StoneDirector, Defined Contribution Savings Plans

Utah Retirement Systems

Utah Retirement Systems

• Four Defined Contribution Savings Plans• 401(k) – grandfathered ($5.3 Billion)• 457(b) ($604 Million)• Deemed Roth IRA ($140 Million)• Deemed Traditional IRA ($120 Million)

• 170,000 participants/200,000 accounts• Administration and Recordkeeping

Utah Retirement Systems• Defined Benefit

• Public, Police/Fire, Schools, Higher Education

• $32 Billion AUM; 90% funded ratio (at market)

• 224,000 participants• Tier 2 program since 2011 – employee choice:

• Hybrid DB/DC; or• DC only 401(k)

Individual Planning Sessions• Where you are – where you want to be –

and how to get there.» Income replacement expectations» Sources of retirement income» Risk tolerance questionnaire» Investments fit

• Hybrid DB/DC or DC Only option? (new hires)

• Which pension payout option is right (retiring)

Hyun SwansonManager, Retirement Savings Program

University of California

UC Retirement System• 10 campuses, 5 medical centers• Primary: Pension, 2016 added choice

between Pension and DC options– 130,000 active members

• Supplementary: Retirement Savings Program– 403(b), 457(b), 401(a)– 316,000 unique participants

Approach to Retirement Readiness

• How much will you need?• How much will you have?• How do you make up the potential gap?• How can you make your money last?

Annual Retirement Income Statement

Retirement Readiness Scores Percent of current salary expected from UC sources

Comprehensive retirement planning• Finding fulfillment in retirement• Income planning for the long term• UC Pension and Retirement Savings

Program benefits• Social Security benefits and claiming

strategies• Health coverage for retirees• Navigating the UC retirement process

Experience Grouping Messaging

Joseph HealySenior Vice President, Account Manager & DC Specialist

PIMCO

Retirement Readiness Trends

1. Readiness requires adequate savings and ability to use

Three quarters (75%) of key plan stakeholders are unsatisfied with current solutions offered participants today

74 %of key plan stakeholdersbelieve plans should offer a

retirement income tier

Source: PIMCO 2018 Retirement Income Survey, April 2018

4 of 5 (80%) key plan stakeholders

value retention of assets

Retirement Readiness Trends

1. Readiness requires adequate savings and ability to use

2. Consensus favors targeted payout investment strategies

3. Complex, interrelated decisions require holistic model

4. Simplicity is essential to drive adoption

Conclusion

DC must migrate to a common framework:

• Satisfy the needs of all stakeholders

• Harmonize guidance, operations, and investments

“Give them the third best to go on.The second best comes too late.

The best never comes.”- Sir Robert Alexander Watson-Watt

PIMCO disclosures…This material contains the current opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Statements concerning financial market trends are based on current market conditions, which will fluctuate. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. ©2018, PIMCO.

Pacific Investment Management Company LLC, 650 Newport Center Drive, Newport Beach, CA 92660, 949.720.6000

These materials are being provided on the express basis that they and any related communications (whether written or oral) will not cause Pacific Investment Management Company LLC (or any affiliate) (collectively, “PIMCO”) to become an investment advice fiduciary under ERISA or the Internal Revenue Code, as the recipients are fully aware that PIMCO (i) is not undertaking to provide impartial investment advice, make a recommendation regarding the acquisition, holding or disposal of an investment, act as an impartial adviser, or give advice in a fiduciary capacity, and (ii) has a financial interest in the offering and sale of one or more products and services, which may depend on a number of factors relating to PIMCO (and its affiliates’) internal business objectives, and which has been disclosed to the recipient. These materials are also being provided on PIMCO’s understanding that the recipients they are directed to are all financially sophisticated, capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies. If this is not the case, we ask that you inform us immediately. You should consult your own separate advisors before making any investment decisions.

These materials are also being provided on the express basis that they and any related communications will not cause PIMCO (or any affiliate) to become an investment advice fiduciary under ERISA or the Internal Revenue Code with respect to any recipient or any employee benefit plan or IRA because: (i) all recipients are acting as or on behalf of a U.S. registered investment adviser, a U.S. registered broker-dealer, a bank regulated by the United States or any State, an insurance company licensed by more than one State to manage the assets of employee benefit plans subject to ERISA (and together with plans subject to Section 4975 of the Internal Revenue Code, “Plans”), or a fiduciary with respect to such Plan(s) with at least $50 million of client assets under management and control, (ii) the recipients are all independent of PIMCO and its affiliates, (iii) upon review of all relevant facts and circumstances, the recipients have concluded that they have no financial interest, ownership interest, or other relationship, agreement or understanding with PIMCO or any affiliate that would limit any fiduciary responsibility that any recipient may have with respect to any Plan on behalf of which this information may be utilized, and (iv) the recipient is, or is represented by, an independent fiduciary that satisfies the criteria set forth in 29 C.F.R. § 2510.3-21(c)(1), including but not limited to paragraphs (c)(1)(i), (ii), and (iv). If this is not the case, or if there is any relationship with any recipient of which you are aware that would call into question the recipient’s ability to independently fulfill its responsibilities to any such Plan, we ask that you let us know immediately.

The information provided herein is intended to be used solely by the recipient in considering the products or services described herein and may not be used for any other reason, personal or otherwise.

CMR2018-0921-355531

Gene HuxholdSr. Managing Director, Investment Only Retirement Plans

John Hancock Investments

Who “Owns” Retirement Readiness?

“You” is Relative….• Helping Hand Can Make a Big Difference

• Australia Super Annuitization Program – Initiated 1992 (9.5%)*

• Employee Contributions are not mandatory

• US “Version” – Auto Enroll, Auto Escalation, Social Security (12.4%, but more than retirement)

* Australian Tax Office

Education• Will Education be Consistent for a

Career?

• 17% of American Workers Feel Confident About Having enough Money for a Secure Retirement*

* 2018 U.S News & World Report. Retirement Confidence Survey.

Education – Income • Questions

–When to Retire–How Much is Needed–Translating Savings into Income–How to Maximize Social Security

• Individuals with >$100,000 in Retirement Savings–27% Have an Advisor*

–Can Robo Solutions Provide the Answers?

* The Spectrum’s Millionaire Corner Study: Advisor Usage Among DC Plan Participants

LeakageCan You Stop What you Know is going to End Badly?

• Loans• Hardship Withdrawals• Cash Outs• Divorce