Janus/PLANSPONSOR Survey: Defined Contribution Plan Providers Take New Approaches in Wake of the Pension Protection Act (PPA)

Company Release - 12/10/2007 4:05 PM ET


A new survey of defined contribution (DC) plan sponsors found that automatic enrollment features, target-date fund usage and institutional plan oversight practices continue to gain momentum in the marketplace since the passage of the Pension Protection Act of 2006 (PPA).

Janus Capital Group participated in PLANSPONSOR'S 2007 DC survey by sponsoring a series of questions that focused on DC plans' investment evaluation, selection, monitoring and oversight. The survey, conducted between July and September 2007, reflected comments from a cross-section of more than 5,400 DC plan sponsors from a wide range of industries across the country.

"The trends in this year's results are especially revealing because the survey was conducted after the passage of the Pension Protection Act last year and before many of its automatic enrollment provisions take effect in 2008," said PLANSPONSOR CEO Charles Ruffel.

Usage of automatic enrollment programs has increased primarily because the new law includes annual automatic deferral increases in the early years of an employee's participation. In addition, lifecycle funds - and target-date funds in particular - are beginning to replace stable value and money market funds as the default option in many automatic enrollment plans. That finding suggests that target date funds could soon become the dominant default preference among DC plans adopting automatic enrollment.

"History suggests the marketplace will soon demand best-of-breed investment lineups for target-date products," said Russ Shipman, Managing Director and Senior Vice President of Janus' Retirement Alliance Services business. "Multi-manager menus will undoubtedly remain the standard for all but the smallest plan sponsors in the DC marketplace, so it follows that the lineups of one-stop lifecycle solutions will evolve to more closely align with that time-tested result."

The survey also revealed that a growing number of DC sponsors have started to embrace a more institutional approach to plan administration and oversight, practices that have traditionally been employed by defined benefit plan sponsors.

"DC plan sponsors are taking on more administrative and oversight responsibilities," said Nancy Holden, Vice President of Client Relations for JanusINTECH Institutional Asset Management. "They have an increasing fiduciary duty to help their employees achieve financial security in retirement, so there is a heightened focus on finding effective and cost-efficient investment solutions."

    To learn more about the 2007 survey findings, go to www.janus.com.

    About Janus Capital Group Inc.

Founded in 1969, Denver-based Janus Capital Group Inc. (Janus) is a recognized leader of growth and risk-managed investment strategies. Our commitment to deliver for investors is rooted in our research-intensive approach and relentless passion to gain a competitive edge.

At the end of September 2007, Janus managed approximately $208 billion in assets for more than four million shareholders, clients and institutions around the world. Outside the U.S., Janus has offices in London, Tokyo and Hong Kong. Janus Capital Group consists of Janus Capital Management LLC, Enhanced Investment Technologies, LLC (INTECH), and Capital Group Partners, Inc. (doing business as Rapid Solutions Group). In addition, Janus Capital Group owns 30% of Perkins, Wolf, McDonnell and Company, LLC.


PLANSPONSOR is the nation's foremost provider of research and information on employer-sponsored pension and retirement plans, and other aspects of retirement savings. In addition to conducting custom research on assignment, PLANSPONSOR publishes an array of annual studies related to the retirement plan industry, including retirement plan rankings for 26 industries and the Fortune 500(R). Independently-owned and operated, the company publishes two periodicals, PLANSPONSOR and PLANADVISER. Please visit www.plansponsor.com for more information.

Please consider the charges, risks, expenses and investment objectives carefully before investing. For a prospectus containing this and other information, please call Janus at 1-877-335-2687 or download the file from janus.com. Read it carefully before you invest or send money.

A fund's performance may be affected by risks that include those associated with non-diversification, non-investment grade debt securities, undervalued or overlooked companies, investments in specific industries or countries and potential conflicts of interest with Janus Smart Portfolios. Additional risks to the fund(s) may include those associated with investing in foreign securities, emerging markets, initial public offerings, derivatives and companies with relatively small market capitalizations. Please see a Janus prospectus or janus.com for more information about risk, fund holdings and details.

Performance of life-cycle and target date funds depends on the underlying funds. They are subject to volatility of the financial markets in the U.S. and abroad and to additional risks associated with investing.

As with all investments, plan participants must make your own determination whether an investment in any particular security is consistent with your investment objectives, risk tolerance, financial situation and with your evaluation of the securities offered by the employer-sponsored retirement plan.

JanusINTECH is the intermediary and institutional business arm of Janus Capital Group; Janus Capital Management, LLC serves as the investment adviser.

Janus Funds distributed by Janus Distributors LLC (12/07)

Source: Janus Capital Group

Contact: Janus Capital Group James Aber, 303-336-4513