Larger DB plans moving to outsourcing, Russell finds

Corporate defined benefit plans with more than $500 million in assets accounted for 42% of the RFPs for outsourced CIO assignments Russell Investments completed in the first half of 2012, more than double the 18% figure for all of 2011, according to a news release Tuesday from Russell.

In a telephone interview, Joseph Gelly, the firm's managing director, fiduciary solutions, said demand from smaller institutional investors remains strong, but growing acceptance of the fiduciary outsourcing model and continued market volatility have left ever bigger plans reviewing the internal resources needed to exercise proper day-to-day oversight of their retirement portfolios.

Against that backdrop, there's evidence of a significant uptick in the number of plans which, despite having the scale to drive down fees and hire internal staff, are considering outsourcing full fiduciary and discretionary responsibility for portfolio construction, implementation and manager selection, said Mr. Gelly.

— Contact Douglas Appell at dappell@pionline.com | @Appell_PI