Popularity of managed accounts in defined contribution (DC) plans is growing; however, they currently represent a small portion of assets and have been infrequently chosen as the qualified default investment alternative (QDIA) option. With participant-specific information becoming more readily available, managed account solutions have the ability to tailor investment strategies to the characteristics of each participant. This strong link to each participant’s situation is an important advantage relative to other QDIA options and properly-designed managed accounts will continue to gain popularity as QDIAs because of it. Russell Investments Personalized Retirement Account (PRA) offers plan sponsors and their participants an objective based solution that adapts over time to help get and keep participants on track to meet retirement income goals.
This paper discusses the changes to DC plans in the past 10 years and what the use of managed accounts, Russell Investments PRA, offers plan sponsors and their participants.