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RUSSELL INVESTMENTS
100%
50%
25%
75%
0%
BEHIND TARGET
ON TARGET
Allocation to Growth Assets
AHEAD OF TARGET
Ahead of target
JACK
TAMARA
BILL
CRYSTAL
Recommended
allocation to
growth assets
Target date glide
path growth
allocation
What will happen to the allocations
of each example participant through
time?
If market returns are high, Crystal will find
her surplus increasing, and will increase
her growth allocation until she hits the
upside guardrail. Bill will gradually increase
his growth allocation as his position
improves. Tamara will seek a lower growth
allocation as her plan to secure retirement
readiness allows her investments to work
a bit less to catch up. Jack is likely to stay
at the allocation limit since an extremely
strong market would be needed to improve
the viability of his plan.
The allocation shifts are not a market
timing exercise.
5
Tamara does not become
more conservative because she feels the
high market return is likely to be followed
by a move in the other direction, and
Bill does not increase his growth allocation
based on an assumption of continuing
market momentum. The allocation
responses are directly tied to the
characteristics and retirement readiness
of each participant.
CONCLUSION: CUSTOMIZATION AND
ADAPTIVITY BENEFIT PARTICIPANTS
Russell Investments’ Adaptive Retirement
Account solution is designed to improve
on target date glide path solutions
through its focus on the characteristics
of each participant including not just
age but account balances, gender,
desired retirement income, salary and
savings patterns. These data are already
maintained by the plan record keeper
and plan sponsor. The adaptive nature of
the solution provides allocations that are
responsive to changes in each participant’s
situation through time and are designed
to improved opportunities to achieve the
retirement income goal.
Russell Investments’
Adaptive Retirement
Account solution is
designed to improve
on target date glide
path solutions
through its focus on
the characteristics
of each participant.
5
Russell Investments’ strategic
forecasts, which are updated semi-
annually, are employed in the ARA
analysis. These long-term return
assumptions vary from each update,
but are reflective of equilibrium
market behavior and evolve slowly
over time. The projections or other
information generated by this
analysis regarding the likelihood of
various investment outcomes are
hypothetical in nature, do not reflect
actual investment results and are not
guarantees of future results. The
assumptions do not take fees into
consideration and all returns are
assumed gross of any fees, including
ARA fees.
Figure 1: Allocation pattern for example participants