The funds are designed to improve a participant’s ability to develop a path of personalized, optimal asset allocations that change based on factors beyond age. Russell Adaptive Retirement Accounts provide a way for defined contribution (DC) plan sponsors to further enhance their plans’ default options by leveraging existing investment options and drawing on participant information that can be made available from their recordkeepers (e.g., age, savings deferral rate, current account balance, salary and defined benefit (DB) pension benefit) to determine the appropriate asset allocation for each participant based on how on-target they are toward meeting their specific retirement income goal.
“Russell Adaptive Retirement Accounts combine some customization elements of a managed account service—typically at a lower cost to the participant — with the benefits of traditional target-date funds [TDFs]. Plan sponsors benefit because Russell Adaptive Retirement Accounts are in line with QDIA [qualified default investment alternative] requirements, while participants receive tailored, well-diversified asset allocations that take into consideration their unique financial situations and personal market experiences,” said Dick Davies, managing director of defined contribution. “This can all be done without direct participant involvement, since the necessary information already resides with the recordkeeper or on the plan sponsor’s human resources system. We believe this next generation of target-date investing will be a significant step forward in helping participants increase their probability of reaching their retirement goals.”
Russell partnered with Business Logic, a provider of online investment solutions, to customize their existing secure technology platform with the capability to personalize and automate the methodology in Russell Adaptive Investing for individual participants enrolled in DC plans by drawing on recordkeeper data. Russell will continue to work with Business Logic on an ongoing basis to maintain the platform.