Russell Unveils “Next Generation” of Target Date Investing for Institutional Plan Sponsors

SEATTLE--(BUSINESS WIRE)--To help improve the likelihood of defined contribution (DC) plan participants meeting their targeted retirement income goals, global asset manager Russell Investments has leveraged the methodology in Russell Adaptive Investing™ to develop the “next generation” in target date investing for institutional plan sponsors – Russell Adaptive Retirement Accounts. Russell Adaptive Retirement Accounts are designed to improve a participant’s ability to develop a path of personalized, optimal asset allocations that change based on factors beyond age.

“Using Russell Adaptive Investing, we have the ability to incorporate individual participants’ specific demographics and investment experience into the asset allocation modeling and improve the likelihood that they will achieve their specific targeted retirement income.”

“For good reasons, target date funds are the most popular default option used by DC plans as well as one of the most important innovations for DC plans in the last decade. Yet today’s institutional offerings are not entirely adequate because they are designed for the ‘typical’ participant using a pre-determined asset allocation strategy centered solely on a participant’s age, without taking into account an individual’s investment requirements or retirement income goals,” explained Josh Cohen, defined contribution practice leader. “Using Russell Adaptive Investing, we have the ability to incorporate individual participants’ specific demographics and investment experience into the asset allocation modeling and improve the likelihood that they will achieve their specific targeted retirement income.”

Russell Adaptive Retirement Accounts provide a way for DC 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 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. Plan sponsors benefit because Russell Adaptive Retirement Accounts are in line with QDIA 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, 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 respected 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.

Beyond the Russell Adaptive Retirement Accounts, Russell has also leveraged Russell Adaptive Investing for a retail audience with the recent launch of the Russell Retirement Lifestyle Solution™, a planning and investment program designed to help build portfolios specifically around retirement goals. Available only through financial advisors, and to clients for whom it is appropriate, the program features an adaptive investment model strategy that aims to maintain a client's funded status above 100% in retirement.

Russell has been building and managing multi-manager, multi-asset class portfolios for more than 30 years and has $23 billion in DC assets under management globally as of 9/30/2012.

About Russell Investments

Russell Investments (Russell) is a global asset manager and one of only a few firms that offers actively managed multi-asset portfolios and services that include advice, investments and implementation. Working with institutional investors, financial advisors and individuals, Russell's core capabilities extend across capital market insights, manager research, portfolio construction, portfolio implementation and indexes.

Russell has approximately $162 billion in assets under management (as of 12/31/2012) and works with 2,400 institutional clients and more than 580 independent distribution partners globally. As a consultant to some of the largest pools of capital in the world, Russell has $2.4 trillion in assets under advisement (as of 12/31/12). It has four decades of experience researching and selecting investment managers and meets annually with more than 2,200 managers around the world. Russell traded more than $1.5 trillion in 2011 through its implementation services business. Russell also calculates approximately 700,000 benchmarks daily covering 98% of the investable market globally, which includes more than 80 countries and more than 10,000 securities. Approximately $3.9 trillion in assets are benchmarked to the Russell Indexes.

Russell is headquartered in Seattle, Washington, USA, and has offices around the world including Amsterdam, Auckland, Beijing, Chicago, Frankfurt, London, Melbourne, Milan, New York, Paris, Seoul, Singapore, Sydney, Tokyo and Toronto. For more information about how Russell helps to improve financial security for people, visit www.russell.com or follow @Russell_News.

Russell Retirement Lifestyle Solution refers to Russell Investments' planning tool, model strategy, and advisor support program. Although designed to do so, the Russell Retirement Lifestyle Solution may not adequately address a retiree's lifestyle needs in retirement. Investments and strategies are not guaranteed by Russell Investments.

The Russell Adaptive Retirement Account ("ARA") does not assure a profit or protect against loss in declining markets. There is no guarantee that ARA will result in a better outcome than traditional Target Date fund investing.

Target date fund investing involves risk; principal loss is possible. The principal value of the fund is not guaranteed at any time, including the target date. The target date is the approximate date when investors plan to retire and would likely stop making new investments in the fund.

USI-15901