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Made to measure: Evaluating the impact of a retirement managed account

Aug 1, 2018
Empower Institute

Made to Measure: Evaluating the Impact of a Retirement Managed Account

Retirement managed accounts need a clearer definition and better benchmarks to convey their value.

Many defined contribution plans today offer a managed account option. To date, however, there is no standard method for valuing these accounts that considers the full range of potential product features and their financial impact. Retirement managed account (RMA) services can be more complex than certain traditional professionally managed investment products such as balanced funds or target date funds. As a result, measuring their value is an equally complex process.

To solve this issue, Empower has developed a formal definition of an RMA and created a framework to help consultants, advisors and plan fiduciaries evaluate the value of such a service.


Key findings

  • Historical performance is probably not the most appropriate way to account for the overall value of RMAs.
  • RMAs offer more personalized investment management, financial planning and opportunities to mitigate negative behavioral tendencies than target date or balanced funds.
  • Recordkeepers and RMA providers can facilitate value estimates by clearly articulating the features in their RMA products and providing plan-level analytics.
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Carefully consider the investment option’s objectives, risks, fees and expenses. Contact Empower Retirement for a prospectus, summary prospectus for SEC registered products or disclosure document for unregistered products, if available, containing this information. Read each carefully before investing.

Securities offered and/or distributed by GWFS Equities, Inc., Member FINRA/SIPC. GWFS is an affiliate of Empower Retirement, LLC; Great-West Funds, Inc.; and registered investment adviser, Advised Assets Group, LLC. Investing involves risk, including possible loss of principal. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice.

IMPORTANT: The projections, or other information generated on the website by the investment analysis tool 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 results may vary with each use and over time.

Insurance products are issued by or offered through Great-West Life & Annuity Insurance Company, Corporate Headquarters: Greenwood Village, CO; or in New York, by Great-West Life & Annuity Insurance Company of New York, Home Office: New York, NY. Guarantees are subject to the terms and conditions of the contract and the claims-paying ability of the insurer.

The Empower Institute is a research group within Empower Retirement, LLC.

All features may not currently be available and are subject to change without notice. ©2020 Empower Retirement, LLC. All rights reserved.

Unless otherwise noted: Not a Deposit | Not FDIC Insured | Not Bank Guaranteed | Funds May Lose Value | Not Insured by Any Federal Government Agency.