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View More Press Releases by Northern Trust

Press release:

Northern Trust Asset Management Launches New Generation Target Date Solution -- Life Engineered

Issued by: Northern Trust

Date: Jan. 28, 2016

New funds focused on taking the right risk at the right time to help participants build more reliable retirement outcomes and live well, for life

CHICAGO, January 27, 2016 — Northern Trust Asset Management, a trusted and leading investment manager to institutional and private investors worldwide, today announced the launch of Life Engineered™ Funds, a new generation of target date retirement funds. The funds help defined contribution plan sponsors by providing participants with a comprehensive solution that takes the guesswork out of investing and builds a more secure retirement. Using Northern Trust’s proven asset allocation framework, the funds combine the expertise of Northern Trust’s innovative factor-based Engineered Equity™ strategies and PIMCO’s active fixed income and inflation-sensitive strategies.

“Northern Trust has re-engineered the target date fund,” said Stephen N. Potter, President of Northern Trust Asset Management. “Life Engineered Funds leverage our unique factor-based investment approach – called Engineered Equity – and our demonstrated expertise in asset allocation. This new series reflects our continued commitment to the retirement marketplace by providing an efficient and effective solution for DC participants to build for their life in retirement.”

“Our offering also incorporates the insight and expertise of PIMCO, a leading global investment management firm, for the fixed income and inflation component,” Potter continued. “The result is two global market leaders coming together to specifically help plan participants live well, for life.”

“We look forward to working with Northern Trust and share a common point of view on the primary objective for Target Date funds,” said Rick Fulford, Head of Retirement at PIMCO. “We believe the next generation target date funds, like Life Engineered, should seek to provide sufficient, reliable income.”

Life Engineered Funds are available to defined contribution retirement plan sponsors in 12 collective trust funds, designed for participants who are retired or are planning to retire between now and 2060. Each fund includes a combination of three distinct strategies: growth, income and inflation sensitive.

“We have seen considerable adoption of our Engineered Equity factor-based strategies by global institutional investors over the past year, due to an increased focus on managing volatility and taking compensated risks,” said Northern Trust Chief Investment Officer Bob Browne. “Academic studies, including our own, have identified factors in the equity markets that have been proven to outperform over time. Strategically combining exposures to those factors provides portfolios the right volatility at the right time, over a certain time horizon.”

“The result is enhanced efficiency, controlled risk, more reliable return and better investor outcomes,” Browne continued. “Utilizing our proprietary glidepath, Life Engineered portfolios are designed to deliver the right blend of growth, income and risk at the right time depending on where you are in your retirement journey. This investment solution was developed to help grow retirement assets and protect a portfolio’s purchasing power, ultimately to generate more retirement income.”

Sabrina Bailey, Global Head of Defined Contribution at Northern Trust Asset Management, said that as DC plans become the primary retirement savings vehicle for most Americans, these new target date funds address challenges facing retirement plan sponsors and their participants.

“Studies show the average investor consistently underperforms the market by a significant amount , and more than half  of households are at risk for living below their standards in retirement,” Bailey said. “Participants have challenges – knowledge, interest and time – that can prevent them from making the best financial choices. When it comes to investing in their retirement plans, they often do not know which funds to choose, how often to rebalance, and how much risk they should be taking.”

Bailey added: “Our Path Forward research shows that more than 70 percent of DC plan participants /2/ turn to their employers for advice and guidance. As a former institutional retirement consultant, I also understand the increased fiduciary risk facing plan sponsors. Our Life Engineered Funds give plan sponsors a solution that takes the guesswork out of retirement investing for their participants. By focusing on taking the right risk at the right time, we believe investors can increase the probability of successful outcomes.”

Life Engineered Funds expand Northern Trust Asset Management’s product suite for DC plans, which include the Northern Trust Focus Funds, a target date solution with more than $7 billion in assets under management as of December 31, 2015. Focus Funds offer efficient, globally diversified investments, primarily with passive index strategies. For more information, please visit www.lifeengineered.com.

Northern Trust Asset Management is one of the largest investment managers for defined retirement plans in the United States, with $112.4 billion in assets under management for defined contribution plans as of December 31, 2015. In addition, The Northern Trust Company has approximately $300 billion in DC assets under custody as of December 31, 2015. More information can be found at www.northerntrust.com/dcsolutions.

Life Engineered Funds are collective trust funds maintained by Northern Trust Investments, Inc. as trustee. Life Engineered Funds are available for participation only by certain retirement, pension, profit sharing, stock bonus, and other trusts that are exempt from federal income taxation and satisfy other eligibility criteria established by the trustee. The Funds are not available for investment by the general public.

Northern Trust Asset Management is a leading global asset management firm serving institutional and individual investors in 29 countries, with $875 billion in assets under management as of December 31, 2015. Northern Trust Asset Management offers proprietary and multi-manager solutions across all markets and asset classes, from passive to actively managed strategies, delivered in multiple vehicles. For more information, please visit our website or follow us on Twitter @NTInvest.

Northern Trust Asset Management is composed of Northern Trust Investments, Inc., Northern Trust Global Investments Limited, 50 South Capital Advisors, LLC, Northern Trust Global Investments Japan, K.K., NT Global Advisors, Inc. and investment personnel of The Northern Trust Company of Hong Kong Limited and The Northern Trust Company.

About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has offices in the United States in 19 states and Washington, D.C., and 20 international locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of December 31, 2015, Northern Trust had assets under custody of US$6.1 trillion, and assets under management of US$875 billion. For more than 125 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit northerntrust.com or follow us on Twitter @NorthernTrust.

Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at http://www.northerntrust.com/disclosures

/1/  NRRI Update Shows Half Still Falling Short, Center for Retirement Research at Boston College, December 2014

/2/  The Path Forward, DC Participants Want More, 2015, Northern Trust Asset Management

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