American Express Retirement Services (AERS) said it would make available to participants the Exeter Fund’s family of lifecycle investment options managed by Manning & Napier Advisors.
The new funds allow participants to hand over their active asset allocation decisions to Manning & Napier.
In a lifecycle fund, the investment manager allocates assets to different asset classes within the context of an established set of investment objectives.
This allows participants to choose the fund with objectives that best match their own circumstances, such as time horizon and tolerance for volatility, while the manager selects the asset class mix to meet those objectives.
With lifecycle funds, plan sponsors can offer their participants a two-tier approach to allocating their 401(k) contributions.
Tier one is the lifecycle funds which allow participants to select a fund with a distinct asset allocation approach for all or a portion of their 401(k) accounts; tier two offers the traditional 401(k) fund offerings of asset class-based options for those participants who want to manage the asset-allocation decisions themselves.