The defined contribution pension plan grew out of mundane changes to the tax code, not from the lofty ambitions of reformers. But this scheme lies at the heart of any debate about modifying workers pensions. Vanguard Group has driven some of the most innovative work to improve defined contribution plans since they became popular in the early 1980s. Head of the institutional investor group at the $1.8 trillion money manager, Chris McIsaac is at the forefront of those efforts. McIsaac, 38, wants to make defined contribution more user-friendly. Corporations desire to improve their 401(k) plans are coming now because they realize that DC programs are the primary vehicle for saving for retirement, he explains. Long before the Department of Labor demanded it, Vanguard pushed for and offered fee disclosure so participants could see how high costs affected results. One of the largest providers of index funds, the Valley Forge, Pennsylvaniabased firm has promoted using these low-cost vehicles in target date portfolios and as stand-alone choices for investors. Next for McIsaac, who grew up in Edmonton, Canada, and joined Vanguard right after graduating from Harvard Business School in 1997: talking to the DoL about simplifying its newly required fee disclosures. Now 15- or 16-page documents land in participants mailboxes, he says. The question is whether they read them.
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