Originally Posted by jazz4cash
I agree with Martha, Devon does seem to be taking additional fiduciary risk....everyone is hearing 'Target Funds' without maybe considering what's in the funds.
They're investing in thier own DB plan among other things:
Devon's target-date funds will consist of low-cost investments in its $614million defined-benefit pension plan, including alternative investments such as real estate investment trusts and inflation-indexed securities.
At first, I was confused when reading the underlined passage above, so I emailed the author [Anne Tergesen] for help. Basically, the funds being used in the DB and DC plans are the same, but the allocations between the funds are different. For example, the according to DVN's last 10-K, it's pension assets were 80% stock/20% bonds, while the target funds will have different allocations of the same underlying funds.
But how is this as increased fiduciary risk over the previous 401(k) choices?