2. 2
The Bonds of Family and State
A Long History of Retirement in Greek Culture
The God “Geras” and “Baleful” old age
Laertes on Ithaca: Kinship Support in
Retirement
Solon: Linking “Eldercare” to Public Service
Aristotle (Athenian Constitution: 1293 a3-7):
“All citizens take part…the predominance of the
masses…even the poor…by receiving pay.” Jury
service (3 obols) and the distinction between
Oligarchy and Democracy
3. 3
The Transition to Individual Saving in Greece
The Complementarity of the Third Pillar
Source: “Towards a New Social Contract: Greek Pensions Halfway Through Adjustment,” Platon Tinios, Hellenic Observatory
4. 4
The Boomer Wave in the US: ~12,000 New Retirees Every Day
Generational Transition…From Savers to Spenders
2014 was a Tipping Point
for Decumulation
The Experience in the US: The Long (401K) Runway for Employer DC Plans
Source: Deutsche Bank and PIMCO
5. 5
Turning Income into Wealth: Nudging toward Retirement Success
From Paycheck to Retirement Spending
CFA Institute
Behavioral Science Lessons:
“Default” in early, contribute often, stay the course, hit “Target Date”
Evolution of Total Wealth, Savings and Withdrawals Impact of Making all the Wrong Choices
6. 6
93% 93% 92%
89%
83%
76%
67%
57%
45%
0%
20%
40%
60%
80%
100%
40 35 30 25 20 15 10 5 0
Years to retirement
PIMCO
PIMCO glide path: engineered with the goal of delivering
sufficient and consistent retirement income1
As of 31 December 2021
SOURCE: PIMCO, Morningstar
For illustrative purposes only.
1Income distributions are not guaranteed.
Refer to Appendix for additional asset allocation, chart, glide path, index, investment strategy, and risk information.
RPB_phil_02
Building
retirement
savings
Defending
retirement
wealth
Supporting
retirement
income
U.S. Fixed income Global bonds Long treasuries Long TIPS
TIPS Emerging market bonds High yield Real estate
Emerging market equities Non-U.S. equities U.S. small cap equities U.S. large cap equities
Total equity exposure (PIMCO) Total equity exposure (industry)
7. 7
Bonds are different:
Go active where it matters and passive where it saves
Fixed income active managers have generally
outperformed their passive counterparts1
Active fee premium is highest
for equities
As of 31 December 2021. SOURCE: Morningstar.
Past performance is not a guarantee or a reliable indicator of future results.
1Percentage of active managers that generated excess returns versus the median passive manager, (classified as “Index Fund” by Morningstar), based on 5-year after fee returns for each Fund families’ lowest priced share class)
2Based on prospectus net expense ratio of actively-managed funds relative “Index Fund” strategies, as defined by Morningstar. Average fee premium based on average premium across the fixed income and equity Morningstar categories specified below.
Based on Morningstar U.S. ETF and U.S. Open-End Fund Categories (Institutional shares only). Large cap represented by Morningstar US Large Cap Blend category, Small Cap represented by Morningstar US Small Cap Blend category, Global (equities)
represented by Morningstar World Large Stock Blend category, Core represented by Morningstar Intermediate Core Bond and Intermediate Core-Plus Bond categories, High Yield represented by Morningstar US High Yield Bond category, Global (bonds)
represented by Morningstar World Bond category
Refer to appendix for additional investment strategy and risk information.
Active fee premium for
equity managers2:
55 bps
Active fee premium for
fixed income managers2:
30 bps
0% 20% 40% 60% 80% 100%
Large cap
Small cap
Global
Core
High yield
Global
Equities
Fixed
Income
Percent
of
active
managers
outperforming
(%)
30%
77%
9. 9
You don’t know how long you’re
going to live. You don’t know
how long your spouse is going
to live. You don’t know what the
markets are going to do – it’s a
problem that gives the best
mathematicians big headaches.
– Dr. Richard Thaler
PIMCO Senior Advisor on Retirement and Behavioral Science
10. 10
Running for the Exits May Backfire: Managing Misbehavior
Hypothetical forecast for illustrative purposes only
Stocks represent the total return of the S&P 500 Index; bonds represent the total return of the Bloomberg Barclays US Aggregate Index; cash represents the ICE BOfAML 3M T bill. Performance does not reflect the deduction of the fees and costs of an investment product. If these fees were reflected
performance would be lower. Figure is provided for illustrative purposes and is not indicative of the past or future performance of any PIMCO product.
11. 11
Cash flow is key: Mollifies loss aversion; mitigates misbehaviors*
*High cash flow is defined as income greater than $125k
Source: PIMCO Retirement Decumulation Study, 2021
Cash flow:
(Emotional) reactivity to risks
Among respondents entering retirement, those
with a cash flow were 1.9 times LESS likely to be
highly loss averse compared to the other groups.
Confidence in retirement spending plan
The presence of some source of regular cash flow
was linked to higher confidence in every group
12. 12
401(k)
IRA
529
Solving for Decumulation: Income to Outcome
“Paycheck”
Replacement
For Illustrative Purposes Only
*Investment products contain risk and may lose value. There is no guarantee that an investment product will be successful in producing income. Investors should consult their investment professional prior to making an investment decision.
Growth
Portfolio
13. 13
Combining Safety and Growth
Income to Outcome Over Time
Value
Growth Portfolio
Time
Paycheck Portfolio
For illustrative purposes only.
15. 15
PIMCO glide path assumptions
As of 31 December 2021
SOURCE: PIMCO, Employee Benefit Research Institute (EBRI)
Hypothetical example for illustrative purposes only
1Index return estimates are based on the product of risk factor exposures and projected risk factor premia. The projections of risk factor premia rely on historical data, valuation metrics and qualitative inputs from senior PIMCO investment professionals.
U.S. Large Cap: S&P 500 Total Return Index; U.S. Small Cap: Russell 2000 Total Return Index; Global Equities: MSCI EAFE Total Return Index; EM Equities: MSCI EM Total Return Index; Real Estate: Dow Jones U.S. Select REIT Total Return Index;
Commodities: Bloomberg Commodity Total Return Index; High Yield: ICE BofAML US HY BB-B Rated Constrained Index; EM Fixed income: JPMorgan Government Bond Index – Emerging Markets Global Diversified (Unhedged); Global Fixed Income:
Bloomberg Global Aggregate Index (USD-Hedged); US Fixed Income: Bloomberg U.S. Aggregate Index; TIPS: Bloomberg U.S. TIPS Index; Long Treasuries: Bloomberg Long-Term Treasury Index; Long TIPS: Bloomberg U.S. TIPS: 10-year+ Index; Cash:
ICE BofA Merrill Lynch U.S. 3-month Treasury Bill Index.
Refer to appendix for additional glide path, index, return assumptions, investment strategy, and risk information
RETURN ASSUMPTIONS
Asset class
Nominal return
assumptions¹
(Over 40 years)
Cash 2.4%
U.S. fixed income 3.3%
Long Treasuries 3.2%
Global fixed income 3.2%
EM fixed income 5.6%
High yield 4.7%
TIPS 2.9%
Long TIPS 3.4%
Commodities 1.9%
Real estate 5.5%
U.S. large cap 5.6%
U.S. small cap 5.5%
Global equities 5.6%
EM equities 7.7%
CONTRIBUTION RATES
Cohort Participant Employer Total
25-29 5.52% 3.64% 9.16%
30-34 5.58% 3.71% 9.29%
35-39 5.67% 3.73% 9.40%
40-44 5.79% 3.75% 9.54%
45-49 5.96% 3.78% 9.74%
50-54 6.30% 3.79% 10.09%
55-59 6.70% 3.82% 10.52%
60-65 7.04% 3.73% 10.77%
INCOME ASSUMPTIONS
Cohort
Real income
('000s)
25-29 $51
30-34 $60
35-39 $67
40-44 $70
45-49 $70
50-54 $70
55-59 $70
60-65 $70
16. 16
Appendix
PERFORMANCE AND FEE
Past performance is not a guarantee or a reliable indicator of future results. The performance figures presented reflect the total return performance, unless otherwise noted, for Institutional Class shares
(after fees) and reflect changes in share price and reinvestment of dividend and capital gain distributions. All periods longer than one year are annualized. Periods less than one year are cumulative.
Investments made by a Fund and the results achieved by a Fund are not expected to be the same as those made by any other PIMCO-advised Fund, including those with a similar name, investment objective
or policies. A new or smaller Fund’s performance may not represent how the Fund is expected to or may perform in the long-term. New Funds have limited operating histories for investors to evaluate and new
and smaller Funds may not attract sufficient assets to achieve investment and trading efficiencies. A Fund may be forced to sell a comparatively large portion of its portfolio to meet significant shareholder
redemptions for cash, or hold a comparatively large portion of its portfolio in cash due to significant share purchases for cash, in each case when the Fund otherwise would not seek to do so, which may
adversely affect performance.
It is important to note that differences exist between the fund’s daily internal accounting records, the fund’s financial statements prepared in accordance with U.S. GAAP, and recordkeeping practices under
income tax regulations. It is possible that the fund may not issue a Section 19 Notice in situations where the fund’s financial statements prepared later and in accordance with U.S. GAAP and/or the final tax
character of those distributions might later report that the sources of those distributions included capital gains and/or a return of capital. Please see the fund’s most recent shareholder report for more details.
Although the Fund may seek to maintain stable distributions, the Fund’s distribution rates may be affected by numerous factors, including but not limited to changes in realized and projected market returns,
fluctuations in market interest rates, Fund performance, and other factors. There can be no assurance that a change in market conditions or other factors will not result in a change in the Fund’s distribution rate
or that the rate will be sustainable in the future.
For instance, during periods of low or declining interest rates, the Fund’s distributable income and dividend levels may decline for many reasons. For example, the Fund may have to deploy uninvested assets
(whether from purchases of Fund shares, proceeds from matured, traded or called debt obligations or other sources) in new, lower yielding instruments. Additionally, payments from certain instruments that
may be held by the Fund (such as variable and floating rate securities) may be negatively impacted by declining interest rates, which may also lead to a decline in the Fund’s distributable income and dividend
levels.
Differences in the Fund's performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in
the pricing methodologies used by the Fund and the index.
There is no assurance that any fund, including any fund that has experienced high or unusual performance for one or more periods, will experience similar levels of performance in the future. High
performance is defined as a significant increase in either 1) a fund's [total] return in excess of that of the fund's benchmark between reporting periods or 2) a fund's total return as compared to its historical
returns between reporting periods. Unusual performance is defined as a significant change in a fund's performance as compared to one or more previous reporting periods
ASSET ALLOCATION
Asset allocation is the process of distributing investments among various classes of investments (e.g., stocks and bonds). It does not guarantee future results, ensure a profit or protect against loss.
ATTRIBUTION ANALYSIS
The attribution analysis contained herein is calculated by PIMCO and is intended to provide an estimate as to which elements of a strategy contributed (positively or negatively) to a portfolio’s performance.
Attribution analysis is not a precise measure and should not be relied upon for investment decisions.
CHART
Performance results for certain charts and graphs may be limited by date ranges specified on those charts and graphs; different time periods may produce different results.
CORRELATION
The correlation of various indexes or securities against one another or against inflation is based upon data over a certain time period. These correlations may vary substantially in the future or over different time
18. 18
Appendix
MORNINGSTAR RATING
The Morningstar Analyst Rating™ is not a credit or risk rating. It is a subjective evaluation performed by Morningstar’s manager research group, which consists of various Morningstar, Inc. subsidiaries
(“Manager Research Group”). In the United States, that subsidiary is Morningstar Research Services LLC, which is registered with and governed by the U.S. Securities and Exchange Commission. The
Manager Research Group evaluates funds based on five key pillars, which are process, performance, people, parent, and price. The Manager Research Group uses this five-pillar evaluation to determine how
they believe funds are likely to perform relative to a benchmark over the long term on a risk adjusted basis. They consider quantitative and qualitative factors in their research. For actively managed strategies,
people and process each receive a 45% weighting in their analysis, while parent receives a 10% weighting. For passive strategies, process receives an 80% weighting, while people and parent each receive a
10% weighting. For both active and passive strategies, performance has no explicit weight as it is incorporated into the analysis of people and process; price at the share-class level (where applicable) is directly
subtracted from an expected gross alpha estimate derived from the analysis of the other pillars. The impact of the weighted pillar scores for people, process and parent on the final Analyst Rating is further
modified by a measure of the dispersion of historical alphas among relevant peers. For certain peer groups where standard benchmarking is not applicable, primarily peer groups of funds using alternative
investment strategies, the modification by alpha dispersion is not used.
The Analyst Rating scale is Gold, Silver, Bronze, Neutral, and Negative. For active funds, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that an
active fund will be able to deliver positive alpha net of fees relative to the standard benchmark index assigned to the Morningstar category. The level of the rating relates to the level of expected positive net
alpha relative to Morningstar category peers for active funds. For passive funds, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that a fund will be
able to deliver a higher alpha net of fees than the lesser of the relevant Morningstar category median or 0. The level of the rating relates to the level of expected net alpha relative to Morningstar category peers
for passive funds. For certain peer groups where standard benchmarking is not applicable, primarily peer groups of funds using alternative investment strategies, a Morningstar Analyst Rating of Gold, Silver, or
Bronze reflects the Manager Research Group’s expectation that a fund will deliver a weighted pillar score above a predetermined threshold within its peer group. Analyst Ratings ultimately reflect the Manager
Research Group’s overall assessment, are overseen by an Analyst Rating Committee, and are continuously monitored and reevaluated at least every 14 months.
For more detailed information about Morningstar’s Analyst Rating, including its methodology, please go to https://shareholders.morningstar.com/investor-relations/governance/Compliance--
Disclosure/default.aspx.
The Morningstar Analyst Rating (i) should not be used as the sole basis in evaluating a fund, (ii) involves unknown risks and uncertainties which may cause the Manager Research Group’s
expectations not to occur or to differ significantly from what they expected, and (iii) should not be considered an offer or solicitation to buy or sell the fund.
OUTLOOK
Statements concerning financial market trends are based on current market conditions, which will fluctuate. There is no guarantee that these investment strategies will work under all market conditions or are
appropriate for all investors and each investor should evaluate their ability to invest for the long term, especially during periods of downturn in the market. Outlook and strategies are subject to change without
notice.
PORTFOLIO STRUCTURE
Portfolio structure is subject to change without notice and may not be representative of current or future allocations.
STRATEGY AVAILABILITY
Strategy availability may be limited to certain investment vehicles; not all investment vehicles may be available to all investors. Please contact your PIMCO representative for more information.
RETURN ASSUMPTIONS
Return assumptions are for illustrative purposes only and are not a prediction or a projection of return. Return assumption is an estimate of what investments may earn on average over the long term.
Actual returns may be higher or lower than those shown and may vary substantially over shorter time periods.
!mk_RPB_appendix
20. 20
Appendix
ICE BofAML U.S. High Yield, BB-B Rated, Constrained Index tracks the performance of BB-B Rated U.S. Dollar-denominated corporate bonds publicly issued in the U.S. domestic market. Qualifying bonds are
capitalization-weighted provided the total allocation to an individual issuer (defined by Bloomberg tickers) does not exceed 2%. Issuers that exceed the limit are reduced to 2% and the face value of each of their
bonds is adjusted on a pro-rata basis. Similarly, the face value of bonds of all other issuers that fall below the 2% cap are increased on a pro-rata basis.
Merrill Lynch 3-Month Treasury Bill Index
Dow Jones U.S. Select Real Estate Investment Trust (REIT) Total Return Index, a subset of the Dow Jones U.S. Select Real Estate Securities Total Return Index, is an unmanaged index composed of U.S.
publicly traded Real Estate Investment Trusts. This index was formerly known as the Dow Jones Wilshire REIT Index.
Bloomberg Global Aggregate (USD Hedged) Index provides a broad-based measure of the global investment-grade fixed income markets. The three major components of this index are the U.S. Aggregate, the
Pan-European Aggregate, and the Asian-Pacific Aggregate Indices. The index also includes Eurodollar and Euro-Yen corporate bonds, Canadian Government securities, and USD investment grade 144A
securities.
JPMorgan Government Bond Index-Emerging Markets Global Diversified Index (Unhedged) is a comprehensive global local emerging markets index, and consists of regularly traded, liquid fixed-rate, domestic
currency government bonds to which international investors can gain exposure.
The Lipper Mixed-Asset Target-Date Funds Average is an average of funds that seek to maximize assets for retirement or other purposes with an expected time horizon not to exceed the target year. The total
return of the Lipper Average does not include the effect of sales charges.
The MSCI Emerging Markets Net Dividend Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Markets
Index consists of the following 21 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines,
Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.
The MSCI EAFE Net Dividend Hedged USD Index is an unmanaged index of issuers in countries of Europe, Australia, and the Far East represented in U.S. Dollars on a hedged basis.
The Russell 2000 Index is an unmanaged index generally representative of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 10% of the total market capitalization of the
Russell 3000 Index.
Bloomberg Commodity Index Total Return is an unmanaged index composed of futures contracts on a number of physical commodities. The index is designed to be a highly liquid and diversified benchmark for
commodities as an asset class. The futures exposures of the benchmark are collateralized by US T-bills.
The S&P 500 Index is an unmanaged market index generally considered representative of the stock market as a whole. The index focuses on the large-cap segment of the U.S. equities market.
It is not possible to invest directly in an unmanaged index.
These materials are being provided on the express basis that they and any related communications (whether written or oral) will not cause Pacific Investment Management Company LLC (or any affiliate)
(collectively, “PIMCO”) to become an investment advice fiduciary under ERISA or the Internal Revenue Code, as the recipients are fully aware that PIMCO (i) is not undertaking to provide impartial investment
advice, make a recommendation regarding the acquisition, holding or disposal of an investment, act as an impartial adviser, or give advice in a fiduciary capacity, and (ii) has a financial interest in the offering
and sale of one or more products and services, which may depend on a number of factors relating to PIMCO (and its affiliates’) internal business objectives, and which has been disclosed to the recipient.
These materials are also being provided on PIMCO’s understanding that the recipients they are directed to are all financially sophisticated, capable of evaluating investment risks independently, both in general
and with regard to particular transactions and investment strategies. If this is not the case, we ask that you inform us immediately. You should consult your own separate advisors before making any investment
decisions.
!mk_RPB_appendix