Ibbotson Associates to Provide New Option for Discretionarily Managed Custom Portfolios with ERISA 3(38) Coverage
12 April 2012

Lincoln Financial Group’s Retirement Plan Services Business announces enhancements to its LifeSpan® customized model asset allocation program for employer-sponsored retirement plans. Lincoln now offers plan sponsors the option to engage with Ibbotson Associates, a registered investment advisor and wholly owned subsidiary of Morningstar, Inc., to provide discretionarily managed custom model portfolios with ERISA 3(38) coverage.

ERISA section 3(38) allows defined contribution plan sponsors to hire a registered investment manager and transfer investment-related liability to the investment manager for the oversight of plan investments.

For more than a decade, the LifeSpan® program has used a sophisticated administrative platform that provides consultants and plan sponsors the ability to develop customized asset allocation models for participants, such as target date and target risk portfolios, utilizing the investment options from the plan’s existing lineup. The open architecture platform is available for plans in Lincoln’s small-to-large retirement plan program and to consultants and advisors who wish to act as an ERISA 3(21) investment advice fiduciary or a 3(38) investment manager fiduciary.

Now, the Lincoln LifeSpan® program affords plan sponsors and consultants the option to delegate the fiduciary responsibility associated with developing, monitoring and updating the model portfolios to the investment expertise of Ibbotson Associates. Ibbotson Associates will create a series of model portfolios, including target date, target risk, and retirement income, based on its patented lifetime asset allocation methodology. Ibbotson will use the plan lineup’s investment options, which undergo rigorous analysis and are carefully selected by plan sponsors and consultants, to implement the diversified model portfolios.

"Many plan sponsors have an increased desire for investment portfolio solutions that help them meet their fiduciary obligations while also helping participants with retirement readiness," said Eric Levy, Senior Vice President, Head of Product and Solutions Management, Retirement Plan Services, Lincoln Financial. "This offering gives plan sponsors and their consultants an alternative to traditional off-the-shelf target date funds by providing an opportunity to create and manage custom model solutions, now with the option of discretionary management and 3(38) ERISA coverage from Ibbotson Associates. These solutions can help provide both plan participants and plan sponsors the opportunity to generate better retirement plan outcomes."

Under this program, plan sponsors or their consultants may choose from an array of model portfolios designed to accommodate varying participant investment objectives, including:

  • Target date models
  • Target risk models
  • Retirement income models for investors closer to retirement
  • Combination target risk and date models offering participants a choice of conservative, moderate or aggressive glidepaths based on their years to retirement and risk preference.

The LifeSpan® models may be offered as a Qualified Default Investment Alternative (QDIA) and are also available to ERISA and non-ERISA plans.

"Plan sponsors and consultants recognize that every participant base is unique, regardless of plan size. Pension benefits, demographic makeup, and participant knowledge of investing can affect what investment offerings are most appropriate," said Brock Johnson, president of retirement solutions for Morningstar’s Investment Management division. "We’re pleased to work with Lincoln to provide plan sponsors and consultants the support they need to offer customized model portfolios that are suited to their participants’ risk capacity and investment needs regardless of plan size."

LifeSpan® is an example of an asset allocation model. Asset allocation models use the investment options available in the retirement product or program and are designed to help an individual select the investment options that best align with their retirement goals. They offer the option to select from either time-based or risk-based models. Asset allocation does not ensure a profit nor protect against loss.

About Ibbotson Associates

Ibbotson Associates is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. Ibbotson Associates, along with Morningstar’s other investment advisory subsidiaries, comprise the Morningstar Investment Management division. This division provides independent investment management, retirement, and consulting services to institutions and advisers, and has more than $180 billion in assets under advisement and management as of Dec. 31, 2011.

About Lincoln Financial Group

Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. With headquarters in the Philadelphia region, the companies of Lincoln Financial Group had assets under management of $160 billion as of December 31, 2011. Through its affiliated companies, Lincoln Financial Group offers: annuities; life, group life, disability and dental insurance; 401(k) and 403(b) plans; savings plans; and comprehensive financial planning and advisory services. For more information, including a copy of our most recent SEC reports containing our balance sheets, please visit www.LincolnFinancial.com.


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