Defined Contribution Solutions at Northern Trust has grown rapidly in the last three years, more than doubling assets under management through an expanding array of multi-asset class structures, including target-date and global balanced funds, and providing integrated participant communications for corporate and public retirement plans.
Assets managed by Northern Trust for defined contribution (DC) plans rose to approximately $78 billion as of December 31, 2012, from $37 billion at the end of 2009. Northern Trust's target-date retirement solution, the Northern Trust Focus FundsTM, recently exceeded $4 billion in assets with the addition of several large corporate DC plan clients.
"DC plans have grown in stature as the primary workplace retirement vehicle for most Americans, and the marketplace is responding to our comprehensive approach for both design and implementation of cost effective solutions that capture global market exposure," said Jim Danaher, Managing Director, Defined Contribution Solutions at Northern Trust. "Our strategies consider the perspectives of plan sponsors and participants, with a global range of solutions that empowers participants to meet their retirement investment goals."
Northern Trust offers a diversified array of strategies to support DC plan investment menus, including multi-asset solutions like the Focus Funds suite of target retirement date funds and the Global Balanced Fund, which allocates across stocks, bonds and real assets to achieve both growth and income investment objectives. Other strategies include core options in index equity, fixed income and multi-manager funds, as well as customized asset allocation solutions.
The Northern Trust Focus Funds have gained greater adoption by DC plan sponsors in recent years, as assets grew at an annualized rate of 136 percent from the end of 2009 through January 31, 2013, when the funds topped $4 billion in assets under management.
"The Focus Funds incorporate many of Northern Trust's strengths as a multi-capability asset manager: a core competency in strategic asset allocation, globally diversified investments and a cost-efficient structure," said Susan Czochara, senior product manager of Northern Trust's DC Solutions Group. "And because innovation is nothing without participation in retirement plans, we also work with plan sponsors, their consultants and record-keepers to design effective communications programs that educate, engage and empower participants."
The DC Solutions team also includes Lee Freitag, senior product manager and a 20-year financial services veteran, Ashish Gandhi, investment strategist, and Sergio Rego, product analyst. The asset management team works closely with Northern Trust's global custody unit to provide comprehensive integrated solutions including daily valuation, multi-manager unitization, DB/DC integration, performance measurement and cross-border pooling. Northern Trust has approximately $214 billion in DC assets under custody.
As a DC industry stakeholder, Northern Trust in 2010 launched a thought leadership program dedicated to helping plan sponsors perfect and refine DC plan design. The Path Forward research series will publish its fourth study examining challenges in DC plan design and implementation later in 2013. Previous studies included surveys of plan sponsors and consultants on the attributes of an ideal DC plan structure, the challenges of engaging younger employees in DC plan participation, and the potential for DC plans to adopt best practices developed over decades by defined benefit plans and other institutional investors.
Asset Management at Northern Trust begins with listening and leads to answers beyond the expected for our clients. The multi-asset class investment management business is comprised of Northern Trust Investments, Inc., Northern Trust Global Investments Limited, Northern Trust Global Investments Japan, K.K., the investment advisor division of The Northern Trust Company and The Northern Trust Company of Connecticut and its subsidiaries which offer investment products and services to personal and institutional markets.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 16 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of December 31, 2012, Northern Trust had assets under custody of US$4.8 trillion, and assets under investment management of US$758.9 billion. For more than 120 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com or follow us on Twitter @NorthernTrust.