Plan sponsor Nyhart Actuary and Employee Benefits (Nyhart) has re-enrolled its employees into Russell Adaptive Retirement Accounts, developed by global asset manager Russell Investments.
Russell Adaptive Retirement Accounts are customized retirement portfolios from a defined contribution (DC) plan’s investment menu, which are designed to be cost-efficient and easy to use, like target-date funds, but to also go a step further toward increasing the probability of plan participants reaching their targeted retirement income goals.
“We are excited to take a step toward the future of retirement saving and add Russell Adaptive Retirement Accounts to our plan menu as our QDIA (qualified default investment alternative),” said Tom Totten, CEO and actuary at Nyhart.
“Following our recent re-enrollment, our DC plan participants now receive customized portfolio allocations aimed at helping improve their retirement outcomes. Because the customized DC accounts incorporate factors beyond age – a current limitation of target date funds – our participants will have a more holistic view of whether they are on-track to meet their desired retirement income goals.”
Russell Adaptive Retirement Accounts are designed to be a QDIA that draws personal information from a DC plan sponsor’s record keeper and HR systems, including age, gender, salary, current account holdings, contribution rate and DB pension benefit (if eligible).
This personal information is inputted into Russell Investments’ asset allocation model that uses the firm’s capital market assumptions in order to construct a portfolio of the DC plan’s existing investment options customized to an individual participant. A participants’ customized asset allocation is then assessed and adjusted quarterly based on how well each individual is tracking toward his or her retirement income goal – without requiring any direct participant involvement.
“Target date funds continue to be one of the most popular default options, but each fund is built for the average participant—and no one is average,” said Jeff Eng, director, retirement income solutions at Russell Investments.
“Russell Adaptive Retirement Accounts are designed to provide participants customized asset allocations aimed at improving the likelihood that they will achieve their specific targeted retirement income by adapting to their investment profiles over time.”