Paper issued by the Global Multi-Asset Strategy Group at J.P. Morgan Asset Management addressing inflation risk in defined contribution schemes.
In the wake of recent market volatility and worries over a prolonged global economic slowdown, immediate concerns over inflationary pressures have eased. But that does not mean the need for protection has passed. In fact, as central banks globally continue their expansionary policies, those policies raise the risk of inducing greater inflation when global growth resumes in earnest. At the same time, the recent swings in volatility can become a significant concern- especially for those closer to retirement-since portfolios that are hit with large losses have less time to recover before the funds are needed, further eroding purchasing power.
Within the attached paper, J.P. Morgan Asset Management examine three key areas:
Why the threat of inflation is a real risk for members, especially for those near retirement
Where effective techniques can be applied to help protect retirement assets
How these strategies can be effectively incorporated into a DC scheme investment line-up
Evaluating these three key areas can help scheme trustees identify - and overcome - specific inflation vulnerabilities, increasing the odds that participants reach safe retirement funding levels, regardless of changing inflation trends.
Click here to view the paper
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