Study: Real estate improves DC plan outcomes
With real estate–rich defined benefit plans shrinking and real estate–poor defined contribution plans expanding rapidly, the real estate investment industry is feeling a sense of urgency to make deeper DC plan inroads. It might have just got some valuable help.
A new research report has concluded that adding a 10 percent mix of listed and unlisted real estate would have improved retirement outcomes for defined contribution plan participants.
The study, titled A Path to Better Retirement Outcomes: Allocating Real Estate Assets to Retirement Portfolios, was conducted by professors from Griffith University and Bond University, and commissioned by the Defined Contribution Real Estate Council, which was formed in 2012 to educate defined contribution plan administrators about real estate investment options.
The study explains that listed real estate, represented by REITs, has often played a role in DC portfolios because REITs’ liquidity and valuation cy