Factors Considered in PRO Portfolio Construction

Below you’ll find a comparison of the personal factors that are considered in determining asset allocation within a TDF vs the new PRO Solution. The PRO service coordinates with your Recordkeeper (or other service providers) to obtain the PRO Customized Default data without requiring any participant involvement. The PRO Retirement Tool is an online portal which allows participants to personalize their retirement goals and gives feedback on their progress. Most importantly, the tool provides suggestions on how to accomplish their personal retirement goals.

Here’s what each of these factors allow us to do:

• Age – gauge participant’s investment time horizon
• Salary – estimate participant’s retirement income goal and projected social security benefits
• Savings rate – calculate the impact of contributions on the growth of participant’s account
• Account balance – gauge how far participant is to their goal
• State income taxes – estimate how a participant’s state of residence will impact their after-tax retirement income
• Gender – estimate a more accurate life expectancy
• Pension income – understand what income sources and if they have cost of living adjustments
• Spouse Age, Income & Savings – knowing the household financial picture for a more complete analysis of the participants needs
• Outside Investments – many participants have balances outside of their workplace retirement plan
• Other Income Sources – a second job or rental income may impact the target retirement income
• Other pertinent plan information (as applicable) – incorporate other plan-specific features that could impact a participant’s retirement goals (i.e. profit sharing, ESOP, company matching provisions, vesting and tenure-related provisions, etc.)

* Some factors may not be available in all situations