Understanding Investing

Meet myTDF: Personalization Meets Simplicity

Target date funds have become the QDIA of choice for plan sponsors. myTDF offers a more personalized approach, while still preserving the simplicity for plan sponsors and participants that’s made TDFs so popular today.

More from this section

Read Transcript

Text on screen: PIMCO

Text on screen: PIMCO provides services only to qualified institutions and investors. This is not an offer to any person in any jurisdiction where unlawful or unauthorized.

Joseph Szalay: Personalization is a natural next step for target date funds, and as we introduced in the first episode of this series, myTDF is an innovative solution that makes personalized glide paths for individual participants as easy as traditional target date funds.

Text on screen: TITLE – The next evolution in retirement plan design; SUBTITLE – SIMPLE AND EASY

Image on screen: A diagram with a check mark in the middle highlights how myTDF is simple and easy. To the left of the check mark, for plan sponsors, the diagram notes seamless plan integration and implementation. On the right, for participants, the figure explains how there’s no effort in enrollment, with all five data points coming directly from the plan recordkeeper and payroll provider.

Plan sponsors may think offering personalization for a large participant population would be hard, but in fact it’s simple. It’s also simple for participants because the factors used to customize their portfolios come directly from the recordkeeper. So, just like traditional Target Date Funds, myTDF requires no participant engagement.

Image on screen: A figure shows three components of myTDF. On the far left, a circle is labeled “myTDF”, which links to three other circles to its right, arranged as a vertical column. The first of those circles, at the top of the column, highlights PIMCO. To its right are bulleted points: Glide path algorithm, RealPath Blend CITs from PIMCO and Vanguard, and fiduciary 3(38) oversight. The next circle, directly below the PIMCO section, highlights the recordkeeper, with three features listed: managing participant level implementation process, powering participant engagement platform, and integrating with Morningstar. The final circle, at the bottom, is labeled “Morningstar,” with bulleted items calling attention to how the technology platform houses glide paths, maps participant data stored at the record keeper, and that PIMCO doesn’t receive personal data.

All the hard work is done behind the scenes by PIMCO and our partners.

We’ve initially selected Morningstar to house PIMCO’s proprietary glidepath model and map participant data stored at the Recordkeeper. This allows us to provide hundreds of thousands personalized portfolios without PIMCO receiving any personally identifiable information directly.

Image on screen: A diagram uses a flow chart to show how myTDF works in practice. At the top, above a horizontal row of boxes, a box notes how PIMCO provides the algorithm output containing an extensive set of glide path allocations and portfolio mappings to Morningstar (i.e. the myTDF engine). This box points downward to the second of the three horizontally arranged boxes. The second box notes how Morningstar processes the inputs through the myTDF engine to output the optimal allocation and portfolio mapping for each participant. The box has an arrow pointing to the next box to the right, which notes that the recordkeeper executes the allocations. This box, which is furthest to the right, has an arrow circling back to a box on the far left, which notes how the recordkeeper sends key participant inputs. This box in turn points to the second box, the one discussing Morningstar turning inputs into allocations, completing the circle.

So, how does this work in practice?

Image on screen:  The video zooms in on the far left-hand box on the flow chart that shows how myTDF works in practice. This box notes how the recordkeeper sends key participant inputs. Below the box, the inputs are listed as follows: age, salary, account balance, employer contribution rate, and employee deferral rate.

First: After a participant enrolls or is defaulted into myTDF, the recordkeeper securely sends their data to Morningstar. This includes their date of birth, salary, retirement account balance, as well as the participant’s savings and company match rates.

Image on screen:  The video zooms in on the second column of the flow chart that shows how myTDF works in practice. This includes the top box, which notes that PIMCO provides the algorithm output containing an extensive set of glide path allocations and portfolio mappings to Morningstar (i.e. the myTDF engine). This box has an arrow below it pointing down to a box that highlights how Morningstar processes the inputs through the myTDF engine to output the optimal allocation and portfolio mapping for each participant. The hypothetical allocation, shown as a pie chart. 

Second: Morningstar runs the participant’s data through PIMCO’s proprietary glidepath model, which generates an asset allocation that is personalized for the participant. This information is then securely sent back to the recordkeeper.

Image on screen: The video zooms in on a portion of the previously described horizontal flow chart that shows how myTDF works in practice. The highlight is of a box on the far right of the flow chart, which notes that the recordkeeper executes the allocations. The video then zooms back out to the main diagram of the flow chart. The text “Process repeats quarterly or any time an employee joins/leaves the plan” appears below the diagram.

Then lastly, recordkeeper executes the trades to implement the participant’s personalized portfolio.

This process is repeated on a quarterly basis to ensure any changes, such as a pay increase or balance change, are automatically captured and considered in the participant’s allocation over time.

Image on screen:  With a view of the horizontal flow chart that shows how myTDF works in practice, the video zooms in on the second box from the right of the flow chart, which notes how allocations are mapped to combinations of existing PIMCO RealPath Blend Collective Investment Trusts.

Now, what are the actual investments being used to build participant portfolios? 

We use PIMCO’s RealPath Blend target date collective investment trusts as the building blocks for myTDF, combining different vintages to implement the personalized glide path.

Text on screen: TITLE – Vintage blending:

Image on screen:  The video shows a graphic resembling a chart with five side-by-side bars, made up of stocks and bonds, labeled 2060, 2045, 2040, 2030, income, which combine into one bar. Bulleted text then appears to the right listing the asset classes: U.S. Fixed income, Global bonds, Long treasuries, Long TIPS, TIPS, Emerging market bonds, High yield, Commodities, Real estate, Non-U.S. stocks, U.S. small cap stocks, U.S. large cap stocks, Emerging market stocks. Additional bulleted text appears to the right explaining how MyTDF builds a more precise glidepath, that there’s no need to change the core menus, and how it follows a similar benchmarking process.

We call it vintage blending. Why is this important?

By using RealPath Blend Target Date CITs, we can access asset classes that may not be available on the plan’s investment menu. That allows us to build a more precise glidepath for each participant. Plus, plan sponsors don’t need to change their core menus to accommodate myTDF.

In addition, benchmarking is simple. Plan sponsors who are familiar with traditional TDFs can follow a similar benchmarking process for myTDF.

Target date funds have deservedly become the QDIA of choice for most plan sponsor’s due to their simplicity and ability to cater to a broad group of participants. myTDF offers a more personalized approach to target date funds, while still preserving the simplicity that has made them so popular today. 

Text on screen: For more insights and information, visit pimco.com

Text on screen: PIMCO

Disclosure


PIMCO and myTDF ® are trademarks of Allianz Asset Management of America LLC in the United States and throughout the world.

myTDF is offered by Pacific Investment Management Company LLC, a registered investment adviser, and is intended for citizens and legal residents of the United States and its territories. Investment advice generated by myTDF is based on information provided and limited to the investment options available in the defined contribution or defined benefit plan. Projections and other information regarding the likelihood of various retirement income and/or investment outcomes are hypothetical in nature, do not reflect actual results, and are not guarantees of future results. Results may vary with each use and over time. myTDF may be covered by one or more U.S. or international patents.

myTDF is a defined contribution or defined benefit plan solution that allows a plan participant to personalize their target date fund allocation across multiple vintages based on participant inputs using PIMCO proprietary funds. An investment in myTDF through your plan will be allocated to the PIMCO REALPATH® Blend Income Collective Trust Series and PIMCO REALPATH® Blend Completion Collective Trust, a series of PIMCO Collective Investment Trust.

The PIMCO REALPATH® Blend Income Collective Trust and PIMCO REALPATH® Blend Completion Collective Trust are part of a series of the PIMCO Collective Investment Trust. SEI Trust Company serves as the Trustee of the Trust and maintains ultimate fiduciary authority over the management of and the investments made in the Trust. The Trustee is a trust company organized under the laws of the Commonwealth of Pennsylvania and wholly owned subsidiary of SEI Investments Company. The PIMCO Collective Investment Trust is a trust for the collective investment of assets of participating tax qualified pension and profit-sharing plans and related trusts and governmental plans as more fully described in the Declaration of Trust. The terms of the plan and Declaration of Trust are incorporated by reference and should be reviewed for a complete statement of its terms and provisions. The PIMCO Collective Investment Trust is managed by SEI Trust Company, the Trustee, based on the investment advice of PIMCO, the investment adviser to the Trust. SEI Trust Company has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act and, therefore, is not subject to registration or regulation as a pool operator under the Act. As a bank collective trust, the Trusts are exempt from registration as an investment company.

Please call SEI Trust Company to obtain a copy of the Trust’s Disclosure Memorandum. Investment objectives, risks, charges, expenses and other important information about the Trust are contained in the Trust’s Disclosure Memorandum.

The Trust is not FDIC-insured, may lose value and is not guaranteed by a bank or other financial institution. Neither the Trust nor the units representing beneficial interest therein are registered with SEC.

Glide Path is the asset allocation within a Target Date Strategy (also known as a Lifecycle or Target Maturity strategy) that adjusts over time as the participant’s age increases and their time horizon to retirement shortens. The basis of the Glide Path is to reduce the portfolio risk as the participant’s time horizon decreases. Typically, younger participants with a longer time horizon to retirement have sufficient time to recover from market losses, their investment risk level is higher, and they are able to make larger contributions (depending on various factors such as salary, savings, account balance, etc.). Generally, older participants and eligible retirees have shorter time horizons to retirement and their investment risk level declines as preserving income wealth becomes more important.

Target Date Funds are designed to provide investors with a retirement solution tailored to the time when they expect to retire or plan to start withdrawing money (the "target date"). Target Date Funds will gradually shift their emphasis from more aggressive investments to more conservative ones based on their target dates. Target Date Funds invest in other funds and instruments based on a long-term asset allocation glide path developed by PIMCO, and performance is subject to underlying investment weightings, which will change over time. An investment in a Target Date Fund does not eliminate the need for an investor to determine whether a Fund is appropriate for his or her financial situation. An investment in a Fund is not guaranteed. Investors may experience losses, including losses near, at, or after the target date, and there is no guarantee that a Fund will provide adequate income at and through retirement.

The funds invests in other funds and performance is subject to underlying investment weightings which will vary.

PIMCO as a general matter provides services to qualified institutions, financial intermediaries and institutional investors. Individual investors should contact their own financial professional to determine the most appropriate investment options for their financial situation. This material contains the current opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America LLC. in the United States and throughout the world. Pacific Investment Management Company LLC, 650 Newport Center Drive, Newport Beach, CA 92660, 800-387-4626. ©2023, PIMCO

CMR2023-0517-2909632

Filters: Reset All

Filters

Close Filters Dropdown
  • Tags

    Reset

    Close
  • Category

    Reset

    Bond by Bond
    Careers
    Economic and Market Commentary
    Investment Strategies
    PIMCO Foundation
    PIMCO Education
    View from the Investment Committee
    View From the Trade Floor
    Viewpoints
    Education
    Close
  • Order By

    Reset

    Alphabetical
    Most Recent
    Close
() filters applied

Multimedia Finder

Filter By:
  • Bond by Bond
  • Careers
  • Economic and Market Commentary
  • Investment Strategies
  • PIMCO Foundation
  • PIMCO Education
  • View from the Investment Committee
  • View From the Trade Floor
  • Viewpoints
  • Understanding Investing
  • A
  • B
  • C
  • D
  • E
  • F
  • G
  • H
  • I
  • K
  • M
  • N
  • P
  • R
  • S
  • T
  • W
  • Z
Clear
Berdibek Ahmedov
Product Strategist
Robert Arnott
Founder and Chairman, Research Affiliates
Andrew Balls
CIO Global Fixed Income
Rachel Betton
Justin Blesy
Asset Allocation Strategist
Meredith Block
ESG Research Analyst
Allison Boxer
Economist
David L. Braun
Portfolio Manager
Jelle Brons
Portfolio Manager, Global and U.S. Investment Grade Credit
Nathaniel Brown
Director of the PIMCO Foundation
Erin Browne
Portfolio Manager, Asset Allocation
Grover Burthey
Portfolio Manager, ESG
Libby Cantrill
U.S. Public Policy
Kenneth Chambers
Fixed Income Strategist
Stephen Chang
Portfolio Manager, Asia
Devin Chen
Portfolio Manager, Commercial Real Estate
Richard Clarida
Global Economic Advisor
Mathieu Clavel
Portfolio Manager, Alternative Credit
Tony Crescenzi
Portfolio Manager, Market Strategist
Harin de Silva
Portfolio Manager, Special Situations
Pramol Dhawan
Portfolio Manager
Matt Dorsten
Portfolio Manager, Quantitative Strategy
Jason Duko
Portfolio Manager
Devin Ekberg
Senior Consultant, Advisor Education
David Forgash
Portfolio Manager
Preeyam Gandhi
Strategist
Max Gelb
Product Strategist
Nick Granger
Portfolio Manager, Quantitative Analytics
Adam Gubner
Portfolio Manager, Distressed Debt
Bill Gurtin
Gregory Hall
Head of U.S. Global Wealth Management
David Hammer
Portfolio Manager
Daniel H. Hyman
Portfolio Manager
Daniel J. Ivascyn
Group Chief Investment Officer
Henry Kao
Account Manager, Stable Value
Mark R. Kiesel
CIO Global Credit
Erica Kinsella
Product Strategist, ESG Strategies
Sean Klein
Head of Client Business Strategy – Client Solutions and Analytics
Kristofer Kraus
Portfolio Manager
Brian Kyle
Global Wealth Management
Jason Mandinach
Head of Alternative Credit and Private Strategies
Kyle McCarthy
Alternative Credit Strategist
Lalantika Medema
Alternative Credit Strategist
Vidur Mehra
Mohit Mittal
CIO Core Strategies
John Murray
Portfolio Manager, Global Private Real Estate
John Nersesian
Head of Advisor Education
Roger Nieves
Sonali Pier
Portfolio Manager, Multi-Sector Credit
Christina Pihos
Defined Contribution Marketing
Gavin Power
Chief of Sustainable Development and International Affairs
Chitrang K. Purani
Lupin Rahman
Portfolio Manager
Graham A. Rennison
Quantitative Portfolio Manager
Steve A. Rodosky
Portfolio Manager
Emmanuel Roman
Chief Executive Officer
Jerome M. Schneider
Portfolio Manager
Marc P. Seidner
CIO Non-traditional Strategies
Emmanuel S. Sharef
Portfolio Manager, Asset Allocation and Multi Real Asset
Greg E. Sharenow
Portfolio Manager, Commodities and Real Assets
Kimberley Stafford
Global Head of Product Strategy; Responsible for Sustainability Oversight
Jason R. Steiner
Portfolio Manager, Private Lending and Opportunistic Strategies
Christian Stracke
President, Global Head of Credit Research
Geraldine Sundstrom
Portfolio Manager, Asset Allocation, EMEA
Richard Thaler
Distinguished Service Professor of Economics and Behavioral Science at the University of Chicago's Booth School of Business
François Trausch
CEO and CIO of PIMCO Prime Real Estate
D. Alan Trice
Matt Tuten
Portfolio Manager
Megan Walters
PIMCO Prime Real Estate
Qi Wang
CIO Portfolio Implementation
Jamie Weinstein
Portfolio Manager, Corporate Special Situations
Paul-James White
Portfolio Manager
Tiffany Wilding
Economist
Jerry Woytash
Portfolio Manager, Short-Term Desk
Kirill Zavodov
Portfolio Manager, Real Estate
Mike Cudzil
Portfolio Manager
Chris Brightman
Chief Executive Officer and Chief Investment Officer, Research Affiliates
PIMCO
Ryan Mulvey
Strategist
Ben Bernanke
Chair, Global Advisory Board
Seray Incoglu
Portfolio Manager, Commercial Real Estate
  • Alphabetical
  • Most Recent
Section : Date : Experts :
Reset All
Risks and Opportunities: Moving from Cash to Bonds
Macro and Markets Q1 2024
Economic and Market Commentary

Macro & Markets – Q1 2024 (video)

Macro & Markets – Q1 2024

Join us for PIMCO’s “Macro and Markets” webinar, a quarterly conversation where we help contextualize the fixed income market and share insights from PIMCO’s Cyclical and Secular outlooks. In this edition –inflation, employment are rate cuts; how a soft landing is possible but risks remain; how markets may have already priced in a cutting cycle; and monetary policy across the globe.
Watch and earn 1-hour of complimentary Continuing Education (CE) for CFP, CIMA, CPWA, and CPA.

Earn CE

Credit Outlook – Time for High Quality Bonds and Leveraged Loans (video)
Unlocking the Power of Private Credit
Aviation Finance: Capturing Opportunities in Private Credit
3 Tax Planning Strategies for Clients in 2024
PIMCO Education

3 Tax Planning Strategies for Clients in 2024(video)

3 Tax Planning Strategies for Clients in 2024

Tune into an informative discussion on how your clients can benefit from strategic tax planning by increasing retirement account contributions, booking capital losses to offset gains, and bunching itemized deductions for charitable giving.

For additional resources on this topic, including an investor-friendly Tax Guide, visit pimco.com/advisoreducation

Load more results Load {{cCtrl.fetchResults}} more results