Managed accounts are being rolled out by many large public defined contribution plans. Among them:
• the $3.6 billion defined contribution plans of the State of Michigan Retirement Systems, East Lansing;
• the $1 billion Texas $aver Defined Contribution Plans of the Employees' Retirement System of Texas, Austin;
• the $501 million North Carolina State Deferred Compensation Plan, Raleigh;
• the $489 million Louisiana Public Employees' Deferred Compensation Plan, Baton Rouge;
• the three defined contribution plans, totaling $400 million, offered by New Jersey Transit, Maplewood, N.J.; and
• the $150 million City of Austin (Texas) Deferred Compensation Plan.
Managed accounts are personalized investment portfolios put together from among the plan's options for participants who want a professional money manager to manage their accounts.
The $100 million 403(b) plan of the California State Teachers' Retirement System, Sacramento, also offers managed accounts. "When we rebuilt the program (starting about two years ago) we decided to get professional money managers to manage assets for those participants who wanted it," said Ed Derman, deputy chief executive officer of CalSTRS. "We pay for it out of the plan." There is no fee charged to the participant. CitiStreet, North Quincy, Mass., is provider for the program and Financial Engines Inc., Palo Alto, Calif., provides the advice and managed accounts service.
Randy Taylor, senior vice president and head of government plan marketing at CitiStreet, said the use of managed accounts is growing rapidly.