J.P. Morgan Reinvents Target Date Fund Communications

NEW YORK, July 31, 2013 /PRNewswire/ -- J.P. Morgan Asset Management today announced that it has launched a new communications program designed to deliver a simplified explanation of its SmartRetirement series of target date funds, using  easy-to-understand terminology supported by animation and infographics.    

Industry studies continue to show that many participants lack basic knowledge on how target funds work – key ideas like what the date in the fund name actually means, the fact that the funds are already fully diversified and that target date funds do not provide guaranteed income in retirement.

To solve this gap in understanding, many firms want to provide more information to participants. However, based on the firm's recent participant research, 75% of participants say they don't take the time to read all of the investment information that is currently provided to them. Also, 44% say they are already getting more information than they can absorb. This is likely part of the reason many participants don't understand what they are invested in – including target date funds.

J.P Morgan sought to address the knowledge gap as well as the communication approach with its new program and is making it available to all J.P Morgan SmartRetirement clients regardless of the recordkeeper servicing their plan.

"Research has shown that while defined contribution plan participants want access to target date funds for retirement savings, they do not understand some of the most basic components of how target date funds work," said Catherine Peterson, Director of Retirement Insights at J.P. Morgan Asset Management. "Given the growing importance of target date funds in plans, we developed this program to specifically address identified participant knowledge gaps."

The program features a full suite of educational resources to support their SmartRetirement clients - helps clarify what target date funds are, how they work and how to choose a SmartRetirement Fund. The program takes a fresh approach in trying to address these points. At the same time, it is structured to be accessible to different types of investors – the "do-it-for-me" investors, who want only the very basics,  and the "do- it- yourselfers" who  are looking for that extra level of detail.   This innovative approach aims to present the material in simple, easy-to-understand language, arming participants with clear information around investing in target date funds.

For those trying to make a decision about target date funds, it helps them quickly understand if this solution may be right for them and how to select a fund. And for those participants that have been defaulted into the target date appropriate for their age, it helps them understand what they are invested in.

The program includes  a dynamic website, featuring  an animated video explaining how a glide paths works, thoughts from employees invested in target date funds or thinking about getting started investing in target date funds and a closer look at the detailed asset allocation by vintage. An infographic-style brochure and product profiles also provide an explanation of key elements presented in an easy-to-understand way.

"Considering the critical role that target date funds play in 401(k) plans and successful retirement outcomes, we think it is very important for plan sponsors to think about how these best practices can be applied to participant communications. It's time to raise the bar on target date fund communications and ensure that the industry is taking every opportunity to educate and inform in a way that is accessible and understandable to all investors," said Peterson.  

To experience how J.P. Morgan is demystifying target date funds, visit:  www.jpmorgansmartretirement.com

About J.P. Morgan Asset Management – Retirement

J.P. Morgan Retirement, with defined contribution assets under management of $85 billion, is a leading comprehensive retirement solutions provider dedicated to improving individual retirement outcomes. J.P. Morgan Retirement Plan Services provides bundled recordkeeping services to more than 650 clients and 2 million plan-level participants, representing more than $158 billion in retirement plan assets (as of June 30, 2013).  

About J.P. Morgan Asset Management

J.P. Morgan Asset Management, with assets under supervision of approximately $1.9 trillion and assets under management of $1.5 trillion (as of 6/30/13), is a global leader in investment management. J.P. Morgan Asset Management's clients include institutions, retail investors and high-net worth individuals in every major market throughout the world.  J.P. Morgan Asset Management offers global investment management in equities, fixed income, real estate, hedge funds, private equity and liquidity.  JPMorgan Chase & Co. (NYSE: JPM), the parent company of J.P. Morgan Asset Management, is a leading global asset management firm with assets of approximately $2.1 trillion and operations in more than 60 countries.  Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

J.P. Morgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co.

SOURCE J.P. Morgan Asset Management