Plan sponsors can help their employees with their retirement plans by providing risk adjusted model portfolios as a default. This essentially provides the plan participant with a pension fund like plan. I believe a vast majority will remain in the model portfolio and will be on track to successfully retire. Unless of course your employees can predict the future.

The average Gen Y investor has 30% of his or her assets in cash, the highest of all demographic groups, according to the latest MFS Investing Sentiment Surveyresults. This would be fine for a baby boomer or even a Gen Xemployee, but not for young employees starting out. They might feel better today with a high cash balance, but the risk is that they will feel worse down the road when their assets haven’t even kept up with inflation. Moreover, they may be missing out on a once-in-a-lifetime opportunity to accumulate shares of growing companies at low share prices during a weak economy.They haven’t learned some time-tested investment strategies because they have been too busy playing defense. When you are being punched in the face, it is difficult to think about anything other than moving to safety. You just want to get away from your attacker and retreat to nurse your wounds. Because of their focus on defense, something is missing for the Gen Y investor — a piece of the puzzle they either were never taught or aren’t open to because they are too skeptical after their bad experiences.

The model portfolio is the ideal solution for all investors saving for retirement. As the employee ages the portfolio needs to become more conservative. Your retirement savings have no place speculating.

Please comment or call to discuss how to improve the results for your plan participants.