John Hailer, president and chief executive officer of Natixis Global Asset Management, US and Asia, has urged the US Department of Labour to consider a variety of investment options that will allow investors to diversify their income sources across many types of investments.
He cautioned that many of the options now being discussed offer very narrow solutions for pre-retirees and retirees.
Hailer pointed to mutual funds as a solution that offers the flexibility and diversity necessary to generate lifetime income. Because of increasing life spans, retirees must plan for a 20 to 40 year investment horizon that focuses on growing capital, rather than merely protecting it.
His comments were submitted in response to the DOL’s request for information on lifetime income options for participants and beneficiaries of retirement plans.
"No single investment product or style should dominate the search for retirement income options," wrote Hailer. "While investment strategies that offer a ‘set it and forget it’ approach are attractive due to their simplicity, the events over the last two years have proven that a simple ‘auto-pilot’ approach will not meet the retirement needs of the average investor."
Providing information and solutions for aging investors is one of the most pressing public policy issues facing industry and government. Seven thousand Americans turn 65 every day and as many as 78 million workers are without access to an employer-provided retirement savings plan, putting retirement investment decisions in the hands of individual investors.
By the end of 2008, mutual funds accounted for 22 per cent of the USD22trn US retirement market.
"There’s a mutual fund for nearly every investment style and goal and their structure and track record stand as proof that mutual funds can offer investors a reliable option for retirement plans," wrote Hailer. "Having served investors’ needs for over 60 years, the mutual fund has proven an integral component in aiding millions of individuals to prepare for retirement."