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Retirement Industry People Moves

Fri, 2019-12-13 12:04

Art by Subin Yang

Pacific Life Promotes Sales VP to Division Leader

Pacific Life has selected Brian Woolfolk as the leader of the company’s new institutional division, effective January 1, 2020. Woolfolk currently serves as senior vice president of sales and chief marketing officer in the retirement solutions division.

The institutional division will bring Pacific Life’s collection of products in the institutional space, including for pension risk transfer, stable value wrap and federal home loan bank businesses, under one leadership as it transitions out of the retirement solutions division.

Woolfolk joined Pacific Life in 2010 and has held roles throughout sales, marketing and product development. In his new role, Woolfolk will lead retail business functions through changes as he grows the new institutional division.

“Brian is a dedicated leader with deep experience in building and leading high-performing teams,” says Pacific Life Chairman, President and CEO Jim Morris. “His leadership role as the head of sales and marketing for the retirement solutions division, as well as previously leading the product development area, has given him broad exposure to strategic, operational and organizational challenges and established his reputation as a thought leader who brings structure, insight and a strong business sense to his role.”

DCREC Appoints 2020 Officers and Committee Co-Chairs

The Defined Contribution Real Estate Council (DCREC) has named its new officers and committee co-chairs for 2020.  

The new officer appointments include Sara Shean, executive director at PGIM Real Estate, who is co-president along with Michael O’Connor, managing director at Clarion Partners; Ian Matthew, senior director, TIAA, co-secretary along with Lennine Occhino, partner at Mayer Brown; and Jodi Fiser, senior vice president at LaSalle Investment Management, co-treasurer along with Anne-Marie Vandenberg, president and chief operating officer at RREEF Property Trust.

Rob Palmeri, executive director at UBS Asset Management, will co-chair the best practices committee along with Tim Bolla, vice president of portfolio management at BentallGreenOak.

Howard Margolis, managing director at Clarion Partners, will co-chair marketing and industry awareness with Kevin Ryan, managing director at Manulife/John Hancock.  

Jay Morgan, managing director of StepStone, and Brian Lambert, vice president at AEW Capital Management, will co-chair the research and content committee.  

Jennifer Perkins, senior director of DC real estate solutions at Principal Real Estate Investors will serve as co-chair of Strategic Alliance, alongside with Rob Collins, managing director at Partners Group.

In addition, DCREC announced the formation of two new committees and their leaders: Jim Gehring, partner, Seyfarth Shaw, will be the chairman of legal and regulatory; and Mackenzie Clouse, vice president at Situs RERC, and Amy White, senior director at Invesco, will co-chair the finance and valuation committee.

Officer appointments are for a period of two years and committee leadership appointments are for a period of one year. All will be effective as of January 1, 2020.

“I congratulate our new officers and co-chairs on their recent appointment to DCREC’s leadership team,” says O’Connor, the newly appointed co-president.  “In the past year, we continue to add new DCREC member firms, which I believe is in large part due to our culture of learning and collaboration, as well as the growth of interest in the defined contribution market. Looking ahead, we expect to see more real estate investment options being made available to DC plans and their participants.”   

Retirement Planning Education Provider Connects with PlanMember Securities Corp

Marina Armbruster, founder of School Benefit Services in Sacramento, will affiliate with PlanMember Securities Corporation. 

As a new PlanMember Financial Center, School Benefit Services will expand retirement and investment planning and financial education opportunities for educators in the Sacramento area, particularly in Yuba, Sutter and Placer counties. 

Marina Armbruster founded School Benefit Services in 2009 after two decades in the financial services industry. She provides retirement planning services— including insurance products, Section 125 plans and other employee benefits—to educators in 10 school districts in Yuba, Sutter and Placer counties. Her affiliation as a PlanMember Financial Center began on November 5. 

“I feel at home with PlanMember because they do what I do,” says Armbruster. “There aren’t many professionals in my area who focus on school systems, 403(b) and 457 plans. PlanMember specializes in that field so it’s a perfect fit for me. By joining PlanMember I feel I’m able to offer better products and services to my clients. Establishing my practice as a PlanMember Financial Center will also enable me to grow my business significantly.” 

“Our affiliation with Marina and School Benefit Services supports PlanMember’s plans for expanding its financial center business model in California and across the country,” says Jon Ziehl, founder and CEO of PlanMember, “and we’re looking forward to a successful long-term relationship.”

Fidelity Adds Rewards Practice to Workplace Consulting 

Fidelity Investments has expanded its workplace consulting business with the launch of a rewards consulting practice.

The rewards consulting practice is said to help organizations reframe traditional compensation and benefits packages as total rewards strategies, as well as ensure workplace benefits are closely aligned with an organization’s business goals.

As part of the launch, Fidelity has hired Andy Welt to lead the rewards consulting practice.

Welt joins Fidelity Investments from Marsh & McLennan Agency, where he managed the compensation consulting division. He also has led compensation strategies at Achillion Pharmaceuticals, Hasbro, Royal Bank of Scotland and CVS Health. He will be based in San Diego, California, and will report to Pearce Weaver, senior vice president of Fidelity workplace consulting. In addition to his new role, Welt will continue to serve as a faculty member for World-at-Work, a global association focused on the practice of total rewards, and as an adjunct professor at San Diego State University’s School of Management.

“In today’s ultra-competitive job market, organizations are constantly looking for any opportunity to gain an advantage in the war for talent,” says Shams Talib, head of Fidelity workplace consulting. “Using a total rewards approach can be an effective way to attract and retain top performing employees. Adding Andy to our team will help us build on our capabilities in this area and provide significant value to our clients.”

TRS CIO Announces Departure 

Teacher Retirement System of Texas (TRS) Chief Investment Officer Jerry Albright announced he is stepping down from the pension fund’s lead investment management role at its December board of trustees’ meeting. Albright will continue to serve TRS for up to one year as senior managing director, global investment initiatives.

“It has been the honor of my lifetime to serve the members of TRS in many roles over the past 25 years. I end my tenure as CIO knowing that we have weathered some financial storms, but the fund and its strategy are on the right path for our members. Truly, we have built a great team to represent their interests moving forward,” says Albright, who was appointed CIO in mid-2017.

Albright joined TRS in 1994 and previously served as TRS’ deputy chief investment officer, chief operating officer, as well as the director of investment operations. He spearheaded the current “Building the Fleet” initiative to bring more investment management talent in-house as the trust’s growth continues. Other projects included the development early this year of a recruiting-centered partnership with Howard University’s School of Business. In 2015, Albright directed TRS’ opening of the system’s London office.

Albright first presented an executive leadership succession plan to the board in 2016. The actions of Albright moving to his new role and the appointment of Jase Auby as CIO are the culmination of that plan. 

“I am honored and privileged to take over as TRS’ chief investment officer and to continue leading such a diverse and talented team of investment professionals. Jerry’s experience and leadership in our industry are widely recognized and I thank him for his support as both a mentor and a friend,” says Auby, whom board members approved as CIO at the same public meeting. Auby, who joined TRS in 2009, pledged to maintain TRS’ current investment management approach. That mandate focuses on carrying out a fiduciary duty to the state’s more than 1.6 million active and retired educators.  

On Albright’s stepping down, board of trustees’ chairman Jarvis Hollingsworth, said, “Jerry has always represented the highest level of integrity and financial acumen as he carried out his duties for the trust. I believe he has left a legacy that others will be able to follow for many years.”

“Jerry’s enthusiasm for public service will leave a lasting mark on our agency,” said TRS Executive Director Brian Guthrie. “He has always emphasized the importance of serving our mission first. And I believe he has done that successfully. I look forward to working with Jase Auby as he transitions into his new role and I fully support Auby’s promotion to CIO.” 

Albright is on the advisory board of the finance department at Texas A&M University. He also serves on the governing board as co-chairman of the Toigo Foundation, an industry group whose mission is to foster the career advancement and increased leadership of underrepresented talent. He is also a member of the Board of the Council of Institutional Investors. Albright will transition from those roles over time.

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Categories: Industry News

401(k) Investors Barely Touched Their Portfolios in November

Fri, 2019-12-13 10:14

November was the lightest trading month of the year for 401(k) investors, according to the Alight Solutions 401(k) Index. Average net daily trading activity was 0.013% of balances, and there were no days of above-normal trading activity.

Nineteen of the 20 trading days favored fixed income. Year-to-date, 87% of the trading days have favored fixed income and a mere 13% have favored equities.

Asset classes with the most trading inflows in November were bond funds, accounting for 46% of the inflows, which totaled $182 million. This was followed by stable value funds (21%, $81 million) and target-date funds (12%, $47 million).

Asset classes with the most trading outflows in November were company stock (52%, $204 million), large U.S. equity funds (25%, $100 million) and small U.S. equity funds (8%, 33%).

After reflecting market movements and trading activity, the average asset allocation in equities ticked upward from 67.3% in October to 67.7% in November. New contributions to equities increased ever so slightly from 67.4% in October to 67.5% in November.

Asset classes with the largest percentage of total balance at the end of November were target-date funds, according for 29% of the balance and $65.2 billion, followed by large U.S. equity funds (25%, $56.5 billion) and stable value funds (10%, $21.4 billion). Asset classes that took in the most contributions in November were target-date funds (49%, $545 million), large U.S. equity funds (20%, $217 million) and international equity funds (7%, $77 million).

U.S. equity returns were strong in November, with small U.S. equities rising 4.1%, large U.S. equities rising 3.6%, and international equities growing by nearly 1%. U.S. bonds fell slightly by 0.1%.

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Categories: Industry News

Sustaintable Portfolios Hold Their Own

Fri, 2019-12-13 09:58

Since 42% of investors in a study by Schroders said performance was a primary concern in sustainable investing, S&P decided to investigate whether carbon-sensitive companies perform as well as those that are not sensitive to greenhouse gas emissions.

S&P considered three levels of carbon sensitivity and found companies at all three levels performed as well as those not sensitive to carbon pollution. In fact, as S&P notes in its ‘Trucost’ of Climate Investing Report, “several academic studies document that companies with lower carbon emissions have higher profitability than companies with higher emission activity. Highly profitable firms are usually well managed and have the resources to adopt proactive environmental strategies as a way to decrease regulatory liabilities. In addition, optimizing energy use reduces operating expenses and improves profitability either through the use of new energy-efficient equipment or adopting energy conservation policies.”

S&P took its study a step further to see whether other activities that generate pollution, such as air pollution, excessive water use and volume of waste generated, have an impact on stock returns. S&P found that they did not directly impact returns.

S&P concludes that “incorporating carbon intensity in a stock selection process does not detract from portfolio performance. All three carbon sensitive portfolios produce comparable returns to the baseline portfolio.”

At the 2019 PLANADVISER National Conference, speakers said that retirement plan sponsors are looking for advisers with environmental, social and governance (ESG) experience. They said there are many more ESG-labeled products on the shelf today, and the ESG theme is being programmed into many funds and investment products that do not explicitly carry an ESG label. Additionally, plan sponsors are running analyses of their existing fund menus to rate them from an ESG perspective, and using this type of thinking to help steer decisions about tailoring the investment menu.

The speakers added that some sponsors even think that ESG can drive outperformance.  In addition, a recent Morningstar report found that 72% of investors are interested in ESG investing.

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Categories: Industry News

IRS Publishes 2021 Mortality Improvement Rates for DB Plans

Fri, 2019-12-13 08:34

The IRS has published Notice 2019-67, “Updated Mortality Improvement Rates and Static Mortality Tables for Defined Benefit Pension Plans for 2021,” and called for public comments on its methods for setting certain mortality assumptions. 

The Notice specifies updated mortality improvement rates and static mortality tables to be used for defined benefit pension plans under Section 430(h)(3)(A) of the Internal Revenue Code (Code) and Section 303(h)(3)(A) of the Employee Retirement Income Security Act (ERISA). These updated mortality improvement rates and static tables apply for purposes of calculating the funding target and other items for valuation dates occurring during the 2021 calendar year.

The IRS Notice also includes a modified unisex version of the mortality tables for use in determining minimum present value figures under Section 417(e)(3) of the Code and Section 205(g)(3) of ERISA. The IRS explains that these will apply to distributions with annuity starting dates that occur during stability periods beginning in the 2021 calendar year.

By law, the Department of the Treasury is required to revise the mortality tables used under Section 430(h)(3)(A) at least every 10 years, “to reflect the actual mortality experience of pension plans and projected trends in that experience.”

A Call for Comments

As recounted in the IRS Notice, on October 23, 2019, an IRS committee released the “Pri-2012 Private Retirement Plans Mortality Tables Report.” The mortality tables in that report are based on a study of mortality experience of private-sector defined benefit pension plans in the United States covering calendar years 2010 through 2014.

Notice 2019-67 calls for new public comments as to whether there are other studies of the actual mortality experience of individuals covered by pension plans and projected trends in that experience that should be considered for use in developing mortality tables for future use under Section 430. For example, should the mortality tables under Section 430(h)(3)(A) be developed taking into account studies that examine the mortality experience of individuals covered by large public-sector pension plans, such as the IRS 2010 Public Retirement Plans Mortality Tables Report?

In addition, comments are requested as to which of the tables in the Pri-2012 Mortality Tables Report “should be used to develop Section 430(h)(3)(A) mortality tables, if the Pri-2012 Mortality Tables Report were to be used for that purpose. For example, should the Section 430(h)(3)(A) mortality tables include separate retiree and contingent survivor tables, as are provided in the Pri-2012 Mortality Tables Report?”

Comments must be received by February 28, 2020. Taxpayers may submit comments electronically via the Federal eRulemaking Portal at www.regulations.gov.

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Categories: Industry News

Friday Files – December 13, 2019

Thu, 2019-12-12 15:10

Southern Alexa, a forklift disaster, an army dance, and more.

In Las Cruces, New Mexico, an employee of a Subway sandwich shop is facing charges after police say she robbed the place. The Las Cruces Sun-News reports that she told officers she committed the robbery “to teach one of the employees a lesson about what could happen late at night in that part of town.”

In Las Vegas, Nevada, over the past week, there have been multiple reports of Las Vegas pigeons sporting various colored cowboy hats. Mariah Hillman, who runs Lofty Hopes, told the Huffington Post that after several days of searching, they finally tracked down the pigeon in the red hat, which they’ve named Cluck Norris. Coo-Lamity Jane, who wears a pink hat, is still out roaming. There’s also reportedly a brown-hatted pigeon on the loose. Some social media users noted that the National Finals Rodeo happened to be in town, but the Professional Rodeo Cowboys Association had “nothing to do with the pigeons wearing cowboy hats,” ProRodeo Sports News editor Scott Kaniewski told The New York Times. Hillman said that although she first thought the birds’ attire was cute, she quickly developed concerns for the safety of the cowboy pigeons when she realized the hats appeared to be permanently secured. On capture, the birds will need to spend some time at the rescue while they assess the situation.

In Memphis, Tennessee, a woman who went through the drive-thru line of a McDonald’s realized she received ketchup instead of the jelly she requests. In a sad tale of how violent our society has become, the Associated Press reports that as words were exchanged with several employees, the woman allegedly pulled out a gun and pointed it at them. Over jelly?!?

Southerners may appreciate this. I have actually had a problem with my phone understanding me.

If you can’t view the below video, try https://youtu.be/q3j6708kzEY.


If you ever have a bad day at work, think about this guy.

If you can’t view the below video, try https://youtu.be/-CFTIOQCqTc.


In Alpnach, Switzerland, the army has a dance for you.

If you can’t view the below video, try https://youtu.be/iEKuYZKd30Y.

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Categories: Industry News

Investment Product and Service Launches

Thu, 2019-12-12 13:13
Harbor Offers Robeco Equity Funds to U.S. Clients

Harbor Capital Advisors has selected five Robeco quantitative equity funds to offer to its clients in the U.S.

The funds included are the Robeco Conservative Equity funds (Global, U.S., Global excluding U.S. and Emerging Markets) and one Robeco Active Quant fund (emerging markets). Harbor will launch these as mutual funds under dual Harbor Robeco branding.

“We are excited to have been selected by Harbor Capital Advisors, and look forward to working together,” says Maureen Beshar, head of Robeco U.S. and Canada. “While Harbor and Robeco have a long history, it is this history that makes the relationship remarkable. Given Harbor’s truly independent nature and the relationship between the companies, we had to prove even more that Robeco was the right choice. Harbor is known for its meticulous due diligence process, so being selected is another vote of confidence for our quant equity product range.”

Robeco U.S. focuses on the largest asset owners and mandate business in the country, whereas Harbor offers investment options to a different client group. Robeco and Harbor Capital Advisors are sister companies in the ORIX Europe holding.

E*TRADE Enhances Stock Plan Administration Platform

E*TRADE Financial Corporate Services, Inc. has announced a series of reporting and automation enhancements to its stock plan administration platform, Equity Edge Online (EEO).

The company’s first enhancement will be report bursting and file sharing functionality, allowing stock plan administrators to run certain participant reports and statements in EEO and deliver them as customized PDFs to participants on etrade.com. The company says the feature saves clients time and mailing costs, while providing access to grant and plan information for participants.

Administrators will also be able to customize retirement eligibility (RE) for shares on a grant-by-grant basis for an unlimited number of eligibility dates. Additionally, RE taxation is integrated within EEO’s existing taxation framework. The participant experience will also be streamlined—their unvested shares are automatically withheld to help cover potential tax liabilities. Participants will be allowed to see their retirement eligibility tax obligations through automatically generated confirmations on etrade.com that break down Medicare, Social Security, federal, and state taxes. 

The final enhancement, ESPP share withholding, permits administrators to flag participants foreseen to have a taxable event during their ESPP purchase. Administrators can withhold shares to cover the participant’s tax obligations. Participants can alleviate the need to pay taxes with cash and limit the impact to their paycheck.

“Through our latest enhancements we’re equipping administrators with flexible, customizable solutions—enabling them to meet the needs of participants like never before,” says Scott Whatley, president of E*TRADE Corporate Services. “Stock plan administrators are constantly challenged to do more with less, so we are relentless in our pursuit to deliver an industry-leading platform that transforms manual and time-consuming processes into automated tasks. This way, administrators can spend more time delivering value-added services and boosting participant engagement.”

T.Rowe Price Presents China Evolution Equity Fund

T. Rowe Price has launched the T. Rowe Price China Evolution Equity Fund. The fund will seek long-term growth of capital through investments in Chinese companies. This launch marks T. Rowe Price’s first mutual fund focused solely on Chinese equities.

The fund mainly invests in companies in the bottom 50% of China’s combined market cap (of which more than 98% are listed companies), rather than in the top 50 index heavyweights.

The China Evolution Equity Fund will be managed by Wenli Zheng, a portfolio manager at T. Rowe Price with 11 years of investment experience.

“China is undergoing unprecedented changes, including an evolving economic model, industrial upgrades, and a shifting geopolitical outlook,” says Zheng. “These changes have created an investment landscape with ample mispricing opportunities. The China Evolution Equity Fund looks to exploit these opportunities through a style-agnostic approach unconstrained by an index.”

The fund’s primary benchmark will be the MSCI China All Shares Index Net. The net expense ratio is 1.40% for the Investor Class shares (Ticker: TCELX). This net expense ratio includes an agreement that limits the class’s total expenses from exceeding 1.40%, which will remain in effect through February 28, 2022. 

The net expense ratio is 1.04% for the I Class shares (Ticker: TRCLX). This net expense ratio includes an agreement that limits the class’s operating expenses to 0.05%, also remaining in effect through February 28, 2022. 

The fund’s minimum initial investment amounts are $2,500 for Investor Class shares and $1,000,000 for I Class shares.

CCA Selects Northern Trust for Fund Administration

Corry Capital Advisors (CCA) has appointed Northern Trust to provide fund administration and related services for CCA’s U.S. commingled funds.

Pittsburgh-based CCA selected Northern Trust earlier this year to provide fund administration and depositary services for Irish-domiciled funds to support its expansion into Europe and distribution of its longevity-based life settlement strategies to new investors.

“Northern Trust has provided exceptional client service and broad-based capabilities across asset classes and investment strategies,” says William Corry, founder and general manager of Corry Capital Advisors. “We look forward to expanding our relationship through this new mandate for our U.S. funds.”

“CCA’s selection of Northern Trust to provide fund administration for its U.S. commingled funds demonstrates the seamless nature of our global service model,” says Kimberly Evans, head of Private Capital Administration in North America. “By providing superior client service and support for CCA in Ireland, Northern Trust gave our clients confidence that we are best positioned to administer their funds in the U.S. We look forward to continuing to partner with CCA to help them achieve their strategic goals.”

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Categories: Industry News

DOL Plans Notice of Proposed Rulemaking on Proxy Voting

Thu, 2019-12-12 12:56

A look at the Department of Labor’s (DOL)’s fall regulatory agenda reveals a planned notice of proposed rulemaking on proxy voting.

In April, the White House issued an executive order on the evolving topic of proxy voting and environmental, social and governance investing programs being put into practice by retirement plans subject to the Employee Retirement Income Security Act (ERISA). In the order, the Trump Administration says its intent is to “promote energy infrastructure and economic growth.”

In its agenda, the DOL says: “This deregulatory action would modernize fiduciary practices related to the voting rights associated with ERISA plan investments and harmonize those regulations with the requirements of other regulators.”

On August 21, the Securities and Exchange Commission (SEC) issued an interpretive release titled “Commission Guidance Regarding Proxy Voting Responsibilities of Investment Advisers,” directed at all advisers registered under the Investment Advisers Act of 1940. The SEC focused on three broad categories of Adviser Act compliance as to proxy voting activity: 1) when and to what extent the act applies; 2) the standard of conduct that applies to advisers who engage in proxy voting activities; and 3) the responsibilities of advisers who utilize the services of third-party proxy voting services.

The last the industry heard about guidance for plan fiduciaries in regards to proxy voting by employee benefits plans was in 2018. In a previous discussion with PLANSPONSOR, David Levine, principal with Groom Law Group, explained that the DOL’s Field Assistance Bulletin 2018-01 (issued under the Trump Administration) puts a new spin on the earlier and more legally significant Interpretive Bulletin 2016-01, in which the Obama Administration directed the DOL to operate under the assumption that proxy voting and shareholder engagement can be consistent with a fiduciary’s obligation under ERISA.

The new Trump-inspired spin, in essence, says that the DOL primarily characterized proxy voting and shareholder activism activities as permissible under ERISA because they typically do not involve a significant expenditure of funds, Levine explained. In other words, with President Trump in charge, the DOL now operates under the assumption that it is not always appropriate for retirement plan fiduciaries to routinely incur significant expenses and to engage in direct negotiations with the board or management of publicly held companies with respect to which the plan is just one of many investors.

In its regulatory agenda, the DOL says the goal of its notice of proposed rulemaking “would be to protect the interests of participants and beneficiaries by: (1) addressing practices that could present conflicts of interest associated with proxy advisory firm recommendations; (2) ensuring that proxy voting decisions are based on best information; and (3) ensuring that proxy voting decisions are solely in the interest of, and for the exclusive purpose of providing plan benefits to, participants and beneficiaries.”

Plan sponsors may not know what to do with proxy statements and a request for voting from one of the investments held in their ERISA plans. Michael A. Webb, vice president, Cammack Retirement Group, says it is not a requirement that the plan vote each proxy, and a number of factors, including the expense related to properly reviewing and voting the proxy, should generally be considered. Typically, the plan’s trustee is the one who votes the proxy.

Webb suggests that plans should vote the proxy in a manner consistent with their investment policy in general or the statement of proxy voting policy contained within the plan’s investment policy, in particular. “Proxies can be complicated, and if there is any doubt as to who should be voting the proxy, as well as the procedures that govern the manner in which the proxy should be voted, outside counsel with specific expertise in such matters should be consulted,” he says.

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Categories: Industry News

Judge Denies Dismissal of Suit Against Archdiocese Over Pension Plan

Wed, 2019-12-11 12:51

A judge for the state of New Jersey has denied a motion to dismiss a lawsuit against the Archdiocese of Newark alleging mismanagement of a defined benefit (DB) plan for employees at Saint James Hospital.

According to news reports, a promissory estoppel count, alleging that the archdiocese promised to provide lifetime pension payments and that the plaintiffs relied on those promises in deciding to work for the hospital system, was determined by the judge to be sufficiently pled.

The pension plan was operated under the Employee Retirement Income Security Act (ERISA) following its passage in 1974. In 1988, the Archdiocese notified past and present employees that it planned to terminate the plan, but plan termination was not approved by the Pension Benefit Guaranty Corporation (PBGC) because the plan did not have enough assets to pay all covered benefits.

That’s when, the plaintiffs allege, “the Archdiocese developed a strategy to escape PBGC scrutiny and the protections of ERISA.” In 1990, the Archdiocese sent a letter to the IRS asking it to deem the pension plan a “church plan” under ERISA. The IRS granted the request.

Around 1997, the Archdiocese terminated the pension plan. According to the plaintiffs, though it had $20 million in surplus assets, it did not use that to plug a $2.7 million deficit in the pension plan funding. The Archdiocese transferred the assets of the plan to a non-guaranteed account at Transamerica.

The plaintiffs allege that Transamerica tried numerous times to warn the Archdiocese that it was running out of money to fund pension benefit payments, but the Archdiocese took no action. Transamerica sent a letter to the affected retirees which stated the plan’s assets were diminishing and it anticipated that they would be depleted in approximately five to seven months. Transamerica told the retirees that “once the plan assets have been entirely depleted, no further pension payments will be processed by Transamerica.”

The news reports say that during a hearing about the motion to dismiss filed by the archdiocese, the judge rejected the argument that the former participants’ complaint did not include enough facts to state a claim. He noted that those would “be developed in discovery.”

Unlike Employee Retirement Income Security Act (ERISA) lawsuits that are argued in federal courts, this case is playing out in state court, alleging that the actions taken by the Archdiocese violate New Jersey contract and trust law.

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Categories: Industry News

Quarterly Statements Useful in Enhancing Participant Retirement Readiness

Wed, 2019-12-11 10:48

It’s no secret that many, if not most, retirement plan participants do not read, or do not fully understand, the many communications sent to them. However, the one they are most likely to pay attention to is their quarterly account statement.

A 2016 syndicated study by Corporate Insight found that of the nearly 1,500 respondents, 82% said access to their most recent quarterly statement was “very” or “extremely important,” and 48% had viewed or downloaded statements at some point in the previous twelve months.

The quarterly statement is a tool for getting plan participants engaged in their retirement readiness. However, not all providers are including the best information to get participants engaged.

For Corporate Insight’s latest Retirement Plan Monitor Report, the firm examined the most up-to-date quarterly statements available on the participant websites of its coverage firms and found every firm makes statement archives findable from links within the main menu—what it says is a best practice. All recordkeepers covered by the report provide gain/loss information and contributions/additions information on quarterly statements, but Corporate Insight says plan participants should be able to see other details about what drives the change in their account balance. Eighty-five percent of recordkeepers supplement this information with investment-level summaries, and 54% provide source-level summaries.

Corporate Insight suggests that statements should also show how dividends and capital gains (62% of recordkeepers provide this information), transfers/exchanges (46%) and fees/expenses (85%) have impacted the plan balance. The firm notes that in recent years, the number of lawsuits regarding fiduciary responsibility has rapidly increased, many of which relate to excessive fees. “Clearly, given the current cost-sensitive environment of the defined contribution industry, it is imperative that firms clearly highlight both recordkeeping and investment fees on the participant website and quarterly statement. Among the firms in this report, 85% list plan fee and expense details on the quarterly statement, either within the quarterly activity summaries or within dedicated sections. However, we believe dedicated sections are the best way to clarify this information, and 62% of the firms in this report offer such sections,” Corporate Insight said in its report.

Aside from understanding what sources affect their account balance, retirement plan participants could use reminders of what they are contributing and what their employers match. Only 31% of firms in the report list employees’ current contribution rate on quarterly statements. Most firms (85%) list the contribution amount by source for the statement period and for additional timeframes (77%). Corporate Insight says employer matching information could provide helpful context for participants who use quarterly statements to assess whether they should make changes to their portfolios, but it found only two recordkeepers integrate this information within statements.

According to Corporate Insight, when communicated clearly and accompanied by methodology and assumption information, retirement readiness data enhances quarterly participant statements. Many in the retirement industry believe retirement income projections on statements would help participants in their savings and investing decisions as well as with planning for retirement. The Department of Labor’s Employee Benefits Security Administration’s (EBSA) in 2013 shared advanced notice of proposed rulemaking on the subject—followed by a comment period that saw some industry practitioners share concerns that the financial assumptions and calculation tools underlying such disclosures must be customizable enough to give participants an accurate income projection. Others said they were concerned that plan fiduciaries could be found to be on the hook for inaccurate—and especially over-generous—projections of income. No regulations have been issued regarding the provision of lifetime income projections on statements, and efforts in Congress also have not panned out.

Corporate Insight found that only 38% of recordkeepers’ statements include retirement readiness information. Among these firms, the selection of metrics varies greatly, with some listing only the monthly income projection, and one including both the monthly and annual retirement income projections, a retirement income goal and a gap analysis along with a forecast-style infographic illustrating the participants’ progress toward their savings goals. Since it last reported on statements in 2018, three recordkeepers have actually removed retirement readiness analysis from statements.

These are all items retirement plan sponsors can ask recordkeepers if they will provide.

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Categories: Industry News

ID Theft Insurance as a Voluntary Benefit

Wed, 2019-12-11 10:05
Among the voluntary benefits that employers offer, identification theft insurance is becoming more popular.

The reason, says Daniel Struck, a partner with Culhane Meadows in Chicago, is that one in 25 people experience an incident of cyber theft or identification theft. “It is a widespread issue,” Struck says. “Without insurance, it takes a person 30 to 50 hours of their time to deal with the impact, that is, making phone calls and cancelling accounts. That is typically done during working hours, so employers realize this is a productivity issue.”

And, this insurance typically costs $3 to $5 a person per month, Struck says. LegalShield’s ID Shield costs $6.95 per person a month and $12.95 for family coverage, notes Emily Rose, senior vice president of sales for the company’s business solutions division.

Rose agrees that employers are increasingly interested in offering identification theft insurance to their workers, with some employers covering the cost. “As more and more breaches appear in the news, they are getting employers’ attention, prompting more to offer this type of insurance as part of their overall financial wellness,” Rose says.

As to what ID Shield offers, it centers around “privacy and reputation management,” Rose says. “We start by monitoring personal and financial information and by conducting credit monitoring. We then cover the gamut, including the dark web and social media. We monitor all of that to insure people’s information is secure. Should a breach occur, our restoration services team steps in.”

ID Shield is also very sensitive to breaches to a person’s 401(k) or other savings account, Rose says. Starting in 2020, LegalShield will ask people for a threshold amount that they would likely use to withdraw money from their various accounts, and should a transaction occur above that sum, ID Shield will immediately notify the account holder to verify that they were the person directing that withdrawal, Rose says.

“Once a person finds a discrepancy in their account, they can contact our center,” Rose says. “The first thing we will do is shut that account down, and then help the person change their password and user name to secure all of their accounts. We will then send them paperwork to provide us with limited power of attorney so that our private investigation team can communicate with all of their financial institutions to secure all of their accounts.”

The team tries to have the financial institutions make any breached accounts whole, but should that fail, ID Shield also has an insurance policy that will cover up to $1 million of lost funds, Rose says.

But even if a person reports one problem, LegalShield is very proactive about examining all of his accounts by examining activity through all three credit bureaus, Rose says.

She says all types of workers and all types of companies are expressing interest in this type of insurance, and that when offered, it is very popular among workers. In fact, 70% of ID Shield’s group plan participants are enrolled in the identify theft family plan, she says. Furthermore, a survey that LegalShield conducted found that 50% of employees think employers should offer identify theft protection in their benefits package, and 89% of employees say that owning identity theft insurance provides them peace of mind.

As to what an employer should look for when selecting identification theft insurance, it is important to determine if they will reimburse people for out-of-pocket expenses incurred when dealing with a breach, as well as whether they are willing to reimburse people for stolen monies, Struck says.

“Find out what the scope of the coverage is,” he suggests. “Price, of course, is a factor to consider as well, and it is also important to get a sense of the insurer’s reputation and quality. This is a growing market and very much like the Wild West in its early days. There are insurers of very different qualities in this market. It is important for employers to take the time to make sure they are buying from an insurer that will be dependable in doing what it promises to do.”

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Categories: Industry News

Officials Issue New Items for DB Plan Sponsors

Tue, 2019-12-10 13:34

The Pension Benefit Guaranty Corporation (PBGC) has published a final rule amending its regulation on Allocation of Assets in Single-Employer Plans by substituting a new table for determining expected retirement ages for participants in pension plans undergoing distress or involuntary termination with valuation dates falling in 2020.

The table is needed to compute the value of early retirement benefits and, thus, the total value of benefits under a plan. The rule is effective January 1, 2020.

The Office of the Superintendent of Financial Institutions (OSFI) issued a Schedule of Expected Pension Contributions Form. Section 9.1 of the Pension Benefits Standards Act, 1985(PBSA) requires a pension plan administrator and the fund trustee or custodian to notify the OSFI when expected contributions to a pension plan are not remitted on time. To enable fund trustees or custodians to fulfill their obligation to report late remittances, the PBSA requires a plan administrator to notify them of the amount and expected remittance date of future contributions. For this, the Schedule of Expected Pension Contributions Form may be used.

The OSFI says the use of the form is not compulsory and administrators may choose to use another format to notify the trustee or custodian of expected contributions. Fund trustees or custodians should notify the OSFI if a schedule is not provided.

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Categories: Industry News

Workplaces and Politics Do Mix

Tue, 2019-12-10 11:24

More than half (56%) of employees say the discussion of political issues have become more common in the last four years, according to the Society for Human Resource Management’s (SHRM) Politics in the Workforce survey.

While in most cases, workplaces and politics shouldn’t mix, of the 522 working Americans surveyed, one-third (34%) indicated their workplaces are not inclusive or mostly inclusive about differing political opinions. One in 10 working Americans say they have personally experienced either differential treatment (11%) because of political views or political affiliation bias (12%). In addition, 13% say they have witnessed or observed differential treatment because of political views and 12% have witnessed or observed political affiliation bias.

The survey found 42% of working Americans have personally experienced political disagreements in the workplace. Forty-four percent have witnessed or observed political disagreements in the workplace.

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Categories: Industry News

DB Funded Status Held Up Fairly Well, Considering…

Tue, 2019-12-10 10:16

River and Mercantile notes that long-term corporate bond yields stayed relatively flat in November and U.S. stock prices moved higher. “With liability discount rates remaining level and an increase in U.S. equity markets, most [pension] plans should have seen a slight increase in funded status for the second month in a row,” the firm says in its Monthly Retirement Update for December.

It’s true that firms that track defined benefit (DB) plan funded status recorded a slight increase of about 1%. The aggregate funded ratio for U.S. corporate pension plans increased by one percentage point to end the month of November at 86.8%, according to Wilshire Consulting. Likewise, Mercer estimated the aggregate funding level of pension plans sponsored by S&P 1500 companies increased by one percentage point in November to 86%.

Mercer says this is the result of an increase in equity markets and a slight increase in discount rates. Ned McGuire, managing director and a member of the Investment Management & Research Group of Wilshire Consulting, notes, “November’s one percentage point increase in funded ratio is the third consecutive and seventh monthly increase this year.”

According to Mercer, as of November 30, the estimated aggregate deficit of $351 billion for S&P 1500 companies decreased by $20 billion as compared to $371 billion measured at the end of October.

Legal & General Investment Management America (LGIMA) estimates that pension funding ratios increased throughout November, with changes driven primarily by the rise in U.S. Treasury yields and global equity performance. Its calculations indicate the discount rate’s Treasury component increased by five basis points while the credit component tightened seven basis points, resulting in a net decrease of two basis points. Overall, liabilities for the average plan increased 0.51%, while plan assets with a traditional “60/40” asset allocation increased by approximately 1.78%.

Despite the past three monthly increases in funded ratio, the aggregate funded ratio as tracked by Wilshire Consulting is estimated to be down 0.7 and 6.1 percentage points year-to-date and over the trailing 12 months, respectively.

October Three’s November 2019 Pension Finance Update also shows both model plans it tracks gained ground last month, but are not up for the year. Plan A improved more than 1% in November but remains down 2% for the year, while Plan B gained less than 1% and is now even through the first eleven months of 2019. Plan A is a traditional plan (duration 12 at 5.5%) with a 60/40 asset allocation, while Plan B is a largely retired plan (duration 9 at 5.5%) with a 20/80 allocation and a greater emphasis on corporate and long-duration bonds.

Still, Brian Donohue, partner at October Three Consulting, says, “Pension finances have held up pretty well this year in the face of all-time low interest rates, thanks to continued strong stock market returns.”

According to Northern Trust Asset Management (NTAM), the average funded ratio of corporate pension plans improved in November from 84.6% to 85.7%. Jessica Hart, head of OCIO Retirement Practice at NTAM, notes, “Despite continued equity market strength, few pension plans have been able to de-risk this year as average funded ratios still remain below where they were at the beginning of the year. As plan sponsors look towards 2020, they will need to consider the implications of a continued low rate and potentially low return environment.” 

Michael Clark, managing director at River and Mercantile, says, “Even though rates have ended the last three months relatively flat, there has been noticeable interest rate volatility intra-month. Based on early economic indicators in December (a better than anticipated jobs report and historically low unemployment rates) equities and interest rates are both up in December—for now. Those could both easily change, and change quickly, based on other economic or geopolitical news throughout the month.”

In the earlier stages of a DB plan’s glidepath, LGIMA recommends using market-based benchmarks. As the plan moves to hedge liabilities, LGIMA recommends customizing the Treasury allocation to reduce funded status volatility, and ultimately it suggests customizing the credit allocation as well to align more closely with the plan’s liability.

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Categories: Industry News

Defining ‘Severance of Employment’ for 457(b) Plan Distributions

Tue, 2019-12-10 05:00
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“I recently read your Ask the Experts column on the definition of ‘severance from employment’ for 403(b) and 401(a)/(k) plans. But what about 457(b) plans? Is the definition the same or different?”

Stacey Bradford, Kimberly Boberg, David Levine and David Powell, with Groom Law Group, and Michael A. Webb, vice president, Retirement Plan Services, Cammack Retirement Group, answer:

The definition is generally the same, as Treas. Reg. § 1.457-6(b)(1) states the following:

(b)Severance from employment

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(1)Employees.—

An employee has a severance from employment with the eligible employer if the employee dies, retires, or otherwise has a severance from employment with the eligible employer. See regulations under section 401(k) for additional guidance concerning severance from employment.

Thus, by referring to the 401(k) regulations, the 457(b) regulations are stating that the definition of severance from employment is the same as for 401(k) plans. So, in order to have a severance from employment in a 457(b) plan, you must no longer be employed by the employer maintaining the plan.

As stated in our prior Ask the Experts column, the employer would include all members of a controlled group under Code Section 414(c) (subject to a reasonable, good faith interpretation of these rules for governmental 457(b) plans, such as provided under IRS Notice 89-23). And note that the exception to the rule that applies to 403(b) plans, where an employee moves to an employer in a controlled group that is not eligible to sponsor a 403(b) plan and has thus incurred a severance from employment, does not apply to 457(b) plans. Thus, regardless of whether the controlled group member is eligible to sponsor a 457(b) plan or not, the employee will not have experienced a severance from employment for purposes of the 457(b) rules when he/she transfers employment between employers in the same controlled group.

However, there is one wrinkle that is unique to 457(b) plans, in that such plans are not limited to employees; independent contractors can be eligible for such plans as well. Since there is no employment relationship, an independent contractor experiences a severance from employment on the expiration of his or her contract or contracts under which he or she performs services for the eligible employer. However, if it can be reasonably anticipated that the contract will be renewed, no severance from employment has occurred.

 

NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

Do YOU have a question for the Experts? If so, we would love to hear from you! Simply forward your question to Rebecca.Moore@issgovernance.com with Subject: Ask the Experts, and the Experts will do their best to answer your question in a future Ask the Experts column.

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Categories: Industry News

TRIVIAL PURSUITS: Which Film Was Dubbed Best of All Time?

Mon, 2019-12-09 13:16

It created the list again in 2007.

Which film topped the American Film Institute’s list of the 100 Best Films of all time both years?

It was 1941’s Citizen Kane. The film actually only received one Oscar, for Orson Welles’ and Herman Mankiewicz’s screenplay.

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Categories: Industry News

Intel Case Parties Present Different Sides About ‘Actual Knowledge’ to Supreme Court

Mon, 2019-12-09 12:21

Back in March of this year, two Intel retirement plans filed a writ of certiorari with the U.S. Supreme Court, asking the high court to step in and reconsider a decision handed down against the company in the 9th U.S. Circuit Court of Appeals late last year.

The Supreme Court granted the review in June, and the oral arguments in the case occurred last week. By way of background, in their writ, the Intel plan fiduciaries suggest a late-2018 decision out of the 9th U.S. Circuit Court of Appeals to revive claims previously dismissed as untimely by a Northern California district court created a division among the appellate courts as to whether the provision of plan documents, in itself, creates for participants “actual knowledge” of an alleged fiduciary breach under the Employee Retirement Income Security Act (ERISA).

In the initial district court decision from 2017, the judge sided with the Intel retirement plans, essentially ruling that the plaintiffs waited too long to file claims because they had gained “actual knowledge” of the alleged breach more than three years before the claims were filed. The main evidence used to show that participants had actual knowledge of the alleged wrongdoing was the fact that the plan had given regular printed and digital disclosures detailing its actions in terms of managing the plans’ investments. Case documents show these disclosures included annual notices, quarterly fund fact sheets, targeted emails, and two separate websites. The plaintiffs, on the other hand, continue to argue that Intel must prove that they had genuine subjective awareness of the alleged breach in order for the three-year limitations period to apply.

According to Willy Jay, a partner in and co-chair of Goodwin Procter’s appellate litigation practice, and Jaime Santos, a partner in the firm’s appellate litigation practice, the oral arguments in this case proved, as expected, to be quite dense and technical. Both in their opening arguments and in response to justices’ questions, the two sides presented very different positions about what it takes to establish “actual knowledge” under ERISA.

“One of the things that came up frequently during the oral arguments was how unique or even strange this specific statute of limitations is,” Santos says. “This actual knowledge requirement is not found in any other statute of limitations in the U.S. Code or in any other state code, I believe. So it’s a very unique provision in ERISA that we are talking about.”

According to the attorneys, one of the defendants’ primary arguments to the Supreme Court was that this is a unique provision for a reason. They argued ERISA creates very detailed and fairly burdensome disclosure requirements for plan fiduciaries that are specifically designed to give plan participants all the information they would need to vindicate their rights under the statute.

“Acknowledging the burden faced by plan fiduciaries, Congress chose to have a specific, shorter three-year limitations period under ERISA in these sorts of cases,” Santos adds. In her view, it would be “problematic” to not acknowledge that plan fiduciaries are making these disclosures and that participants have access to a wealth of information about their plans, investments, etc. It remains to be seen, of course, how the Supreme Court justices will feel about the matter.

Jay and Santos say there seemed to be several matters that received special attention from the justices.

“First, they were clearly trying to test the question of whether simply accepting the plaintiffs’ argument that they lacked sufficient subjective awareness of the type they say is required by the law to prove ‘actual knowledge’ would leave the three-year statute any real work to do,” Jay explains. “Second, there was substantial discussion of Intel’s argument about how the statute of limitations provision read when it was originally written.”

In basic terms, Intel’s counsel argued that “actual knowledge” should mean the same thing in the statute today as it did when it was written and enacted.

“When ERISA was enacted, it was understood that simply filing information directly with the Department of Labor was enough to create actual knowledge for participants, even in cases where those documents or disclosures were never sent directly to participants,” Jay explains. “According to Intel, with this history in mind, it doesn’t make sense to think that actual knowledge means something as robust as the plaintiffs are arguing. During their deliberation, the justices seemed to be quite interested in this statutory history.”

Taking a step back, the attorneys voiced some small confidence that Intel’s arguments may prevail, given the justices’ interest in the relevant statutory history and how the actual knowledge requirement was originally interpreted. But they warn it is at this stage impossible to know how the Supreme Court will rule. There could certainly be a surprising decision issued, or perhaps one which is constructed to be very limited in its implications for ERISA case law.

“What I felt like I saw in this case resembles what we’ve seen in other ERISA cases to come up this term, and what I think we will see in January when the U.S. Bank case is argued,” Santos says. “You have two sides who are very far apart in what they are arguing, and the justices I think don’t fully agree with either party. They may in the end see an opportunity to draw from both sides, both arguments. That makes it difficult to predict how these cases will come out.”

Another particular legal issue at question here which Santos and Jay will be watching closely can be framed as follows: If the court sides with the plaintiffs and requires proof of subjective awareness as a key part of establishing “actual knowledge” under ERISA’s three-year limitations period, what implications will that have on the filing of class action cases in the future?

“Several of the justices said they thought siding fully with the plaintiffs here would make it very difficult, if not impossible, to certify classes in the big ERISA cases we have now become familiar with,” Santos observes. “One thing I feel pretty confident about at this point is that this will not be the last we hear about the three-year statute of limitations. This point about class certification and subjective awareness is ripe for further litigation.”

One question that was not squarely presented by this case was whether a potential plaintiff has to just have actual knowledge of the facts to trigger the three-year period, or if he needs actual knowledge of the legal implications of those facts.

“This is something the justices wanted to talk about, but it wasn’t something that was presented directly in the petitions,” Jay notes.

“If we’re talking about what participants have to know as to the facts, it is important to acknowledge the disclosure requirements that Congress and the DOL have created require that the language of the disclosures be in plain English—which most people should be able to clearly understand,” Santos says. “The disclosures we’re talking about here cannot be made in jargon or in tiny fine print. Disclosure has to be done in a way that can be understood pretty clearly. So that’s important here, I think. When it comes to the relevant facts in these sorts of cases, the DOL has already done a lot of work to ensure the facts are available and understandable.”

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Categories: Industry News

SPARK Finds E-Delivery of Retirement Plan Communications Could Improve Retirement Readiness

Mon, 2019-12-09 10:03

Electronic delivery for retirement plan communications could save participants up to $450 million a year, according to the SPARK Institute. Over the course of their savings lives, this could boost participants’ returns by 9%, the Institute adds.

“This latest research significantly endorses the Department of Labor’s (DOL’s) electronic delivery proposal and the undeniable benefits for the nation’s retirement savers,” says Tim Rouse, executive director of the SPARK Institute. “It clearly demonstrates improved retirement outcomes with electronic delivery and online access that can reduce costs and increase savings for the average retiree by 9% over the accumulation period.”

SPARK performed a projection and found cost savings would accrue to the plan participant in the form of lower fees and greater investment growth over time. Annual savings would range between $250 million to $450 million a year, improving retirement security by up to 9% during the accumulation phase.

The SPARK Institute says 99% of retirement plan participants have access to the Internet, and 88% use the Internet on a daily basis. Final account balances could increase by 63% due to e-delivery nudges to participants to increase their deferral rates. “Under conservative assumptions, a 35-year-old worker who is defaulted into electronic delivery—in addition to engaging with online tools and educational resources—could gain 149% more in retirement savings,” SPARK’s research report says.

The Institute says e-delivery provides a better guaranteed of actual receipt of information and strengthens cybersecurity to prevent online account fraud. It concludes that electronic delivery of retirement plan information provides an efficient, secure and reliable means of communicating important plan information.

The SPARK Institute recently wrote to the DOL strongly supporting e-delivery of retirement plan information. The retirement plan industry has reacted positively to the DOL proposal to make default e-delivery of plan documents the norm, but their comment letters also include additional ideas to make the new rules even more effective.

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Categories: Industry News

Following Up on HSAs After Open Enrollment

Mon, 2019-12-09 10:02

“The best time to engage with employees and educate them about health savings accounts is after open enrollment,” says Steve Neeleman, founder and vice chairman of HealthEquity in Draper, Utah.

The 2019 Bank of America Workplace Benefits Report found 57% of employees say they have a good understanding of health savings accounts (HSAs). However, only 11% of employees were able to correctly identify four basic attributes of HSAs—they offer a “triple” tax advantage, funds in the account can be invested, funds in the account do not expire, and having an HSA requires enrollment in an HDHP.

Lisa Margeson, head of Retirement Client Experience and Communications at Bank of America in Boston, notes that before educating employees, employers themselves have to make sure they are educated about HSAs. The same report shows 65% of employers say they have a good understanding of HSAs, while only 7% correctly identified the four basic attributes.

The Employee Benefit Research Institute (EBRI) reports that one-half of HSA owners contributed to their account in 2018, but 37% of HSAs did not receive any contributions (individual or employer) in 2018.

Margeson suggests plan sponsors focus on two key messages: the cost of health care continues to grow significantly, and the tax advantages of HSAs. “With those two complementary messages, we have seen a good pickup in the enrollment in HSAs,” she says.

“Talk about savings and investing, most people see them as like [flexible spending accounts],” Neeleman says. “Start with three basic messages: HSAs are not use it or lose it accounts, they can be invested and employees can increase how much they put into the account during the year. Light bulbs will go on.”

Margeson notes that HSAs are unlike any other employee benefit when it comes to tax advantages. “Employees’ money goes in pre-tax, grows tax-free and, if pulled out for qualified medical expenses, is tax-free as well. No other savings vehicle gives you that,” she says.

Neeleman says not only will an HSA participant save roughly 8% by avoiding FICA taxes, but the employer will save the same percent. “So, it is important to tell employees to fund their HSAs to take advantage of the tax benefits,” he says, noting that California and New Jersey are exceptions.

Most of the time, however, employees enroll in an HSA as they do with a retirement plan—establishing an amount to be deducted from payroll to put into their account, Margeson points out. Employees need to understand, though, that they can only use HSA funds after they are put into the account; they are not like flexible spending accounts (FSAs), with which the full balance employees elect is available before it is funded.

According to Neeleman, most employers allow HSA participants to change the amount deferred into their accounts during the year. They may only allow participants to do so quarterly or at some regular interval. This way employees can save more if they have a change in medical cost needs, for example, if they have a baby.

Margeson notes that most HSA providers send a welcome package informing participants about the account website and how to sign on and take advantage of the tools, resources and education to manage their accounts. But, Neeleman suggests employers that share messages and education early and often help employees have the most success with their HSAs. “A few months out from open enrollment, hold webinars and/or lunch and learns about the ways participants can use their accounts,” he says.

Since the accounts are not “use-it-or-lose-it,” both Margeson and Neeleman say education about saving and investing HSA accounts for retirement is also important. “Out-of-pocket health care costs continue to rise and will be significant in retirement. Employees can make an intentional decision to not use HSA savings for current medical expenses, if they can afford it, and save and invest their money for future use,” Margeson says.

A report from Devenir says those who invest their HSA accounts have an average total balance six times larger than those who don’t.

Sometimes HSA investment providers only allow employees to invest their funds once they reach a certain amount of savings, Margeson points out. She says that’s why it’s important for employers to educate employees during the year so they will know when they can invest and how to do so.

“Employees may first consider their current health care needs then realize an HSA is incredible savings vehicle for retirement health care expenses. Ask them, ‘Why not maximize HSA contributions if you can?’” Neeleman says. He points out that the IRS allows catch-up contributions to HSAs of $1,000 each for the employee and his spouse after age 55.

“I always believe the icing on the cake with education is to remind people that the longer they keep the money in their HSA, the better it can grow,” Neeleman says. “If an employee can pay for a current medical expense with post-tax dollars, he can leave money in his HSA to grow, and in the future, he can reimburse himself tax-free. There’s no statute of limitations on those reimbursements.”

Margeson says, “When we educate employees about [using HSAs for retirement savings] we actually see an uptick in employees saving their funds for the future versus using them today. Across the industry, about 70% pull money out of HSAs for near-term expenses. Among our client base, it’s about 60%.”

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Categories: Industry News

SURVEY SAYS: Favorite Holiday Movie 2019

Mon, 2019-12-09 03:30

Last week, I asked NewsDash readers, “What is your favorite holiday movie?”

The following listed movies did not receive any votes:

  • A Diva’s Christmas Carol
  • An American Christmas Carol
  • Bad Santa
  • Bernard and the Genie
  • Christmas in Connecticut
  • Prancer
  • The Hebrew Hammer
  • The Holiday
  • The Little Drummer Boy
  • The Year Without a Santa Claus
  • We’re No Angels

The following movies received less than 3% of votes:

  • Frosty the Snowman
  • Home Alone
  • How the Grinch Stole Christmas
  • Love Actually
  • Planes, Trains and Automobiles
  • Scrooged
  • The Bishop’s Wife
  • The Polar Express
  • The Ref
  • The Santa Claus
Die Hard, Holiday Inn, Miracle on 34th Street and Rudolph the Red Nosed Reindeer each received 4.8% of votes. Fifth place goes to Elf, with 5.9% of readers selecting it as their favorite holiday movie.

A Charlie Brown Christmas and White Christmas tied for fourth place, receiving 7.1% of votes. A Christmas Story and Christmas Vacation, with 8.3% of readers selecting each, tied for the third spot. And No. 2 goes to A Christmas Carol, at 10.7%.

And, once again, the No. 1 holiday movie selected by NewsDash readers is It’s a Wonderful Life, which received 15.5% of votes.

More than four in 10 responding readers (42.7%) indicated their vote did not change since the 2017 survey, while 3.7% did change their choice. Nearly one-quarter (23.2%) don’t remember which movie they voted for in 2017, and 30.5% did not participate in the survey that years.

A big thank you to all who participated in our survey!

Verbatim

I have to watch it every year!!!!

For goodness sake, please don’t ever include, or do a survey on, favorite Hallmark movie or we will all miss Christmas because we’ll still be scrolling through the endless list!

When will we stop considering Die Hard a Christmas movie – it is ridiculous.

October is nothing but horror movies and December is nothing but Christmas movies. It keeps the world spinning.

I love them all and watch them all. I still debate my husband on whether Die Hard is a Christmas movie…

Holiday movies are great because they divert my attention from all the bad news in the world, and I don’t have to listen to campaign ads by politicians slamming each other!

My second choice is “Die Hard”, which certainly is a Christmas movie despite what some may think.

I had no idea there were holiday movies other than “It’s a Wonderful Life.”

I watch as many as I can fit in. Especially while wrapping presents and baking.

Die Hard is not a Christmas movie. Sorry guys

My guilty pleasure is the plethora of Hallmark Christmas movies

Gotta go with the classic A Christmas Carol, but so many close seconds!

Holiday movies help me shift my mood from grumpy & stressed to grateful & happy.

I chose Christmas Vacation, but A Charlie Brown Christmas is a very close second.

I prefer the ones that get to the spirit behind Christmas. There are really about 5 that I could choose as my favorite – impossible to pick just one!

It’s not Christmas until Linus drops his blanket. I have watched Charlie Brown’s Christmas every year since it was first broadcast.

Depending on the audience, “Elf” & “Christmas Vacation” are perfect with the kids and family; I selected “Love Actually” as that’s the choice for me and the Mrs.

At some point in the holidays you just need to put on your most comfy pjs, have a bowl of buttery popcorn, cuddle under the quilt with your honey, and watch an old favorite that brings happy memories. Helps to curb the insanity for a couple of hours.

I love the George C. Scott version the best.

Even the grinchiest Grinch has to love a feel good holiday movie from time to time. It’s a time to sip hot chocolate and eat fresh from the oven cookies while enjoying your favorite movies!

I love Christmas movies! If you really aren’t feeling in the spirit, they most certainly help you change your attitude (usually)!

There really are waaaay toooo many to choose from. All of the cartoons are great with the exception of Frosty Returns but you must agree because it’s not on the list!!!

I’m 60 years old and for the first time in my life I saw the ENTIRE “It’s a Wonderful Life” movie over the weekend! Also, it appears I am missing out on a lot of great Hallmark movies by not having cable. Bummer.

It’s nice that there are so many good movies for any mood.

It’s not Christmas in our house unless the Christmas Story is playing in the background while we are opening presents.

In general, they’re trite, and they suck.

 

NOTE: Responses reflect the opinions of individual readers and not necessarily the stance of Institutional Shareholder Services (ISS) or its affiliates.

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Categories: Industry News

Retirement Industry People Moves

Fri, 2019-12-06 13:01

Art by Subin Yang

Pantheon Announces Appointment of Partner and Other Hires

Pantheon has appointed Rakesh Jain as partner and global head of private debt. He is based in Pantheon’s New York office.

Pantheon plans to hire additional resources in both London and New York. Currently, Toni Vainio, principal, leads European private debt origination and investments while Francesco di Valmarana chairs the global credit committee. Jain will join the GCC together with existing members di Valmarana, Vainio, Jeff Miller, partner, and Dennis McCrary, partner.

Jain reports to McCrary, leads U.S. investment activity, coordinates global investment activity, and provides line management of the private debt team.

“We are delighted to be joined by Rick, whose deep experience in executing and managing private debt investments will add valuable investment expertise and coverage for our clients,” says di Valmarana.

Previously, Jain was a managing director and investment committee member at Star Mountain Capital, a private credit firm based in New York. Previously, he founded and managed an investment firm focusing on providing flexible private debt and structured equity solutions to middle market U.S. companies, and was a principal at a division of Stone Tower Capital, now Apollo Global Management. Prior to that, Jain worked as the director at Citigroup Alternative Investments, where he managed several funds focused on private equity and private credit direct investments, fund investments, as well as on strategic financial services investments. He started his career in investment banking at Morgan Stanley & Co. in New York in the financial institutions group.

Jain holds a bachelor of commerce degree from McGill University.

Millennium Trust Acquires Liberty Trust Assets

Millennium Trust Company has acquired assets of Liberty Trust Company

Liberty Trust, founded in Dallas, Texas, in 2005, is a leading provider of custody and administration services for specialized individual retirement accounts (IRAs). At the time of the transaction, the Liberty Trust client accounts represent approximately 10,000 IRAs and $800 million of retirement assets under custody, including self-directed IRAs holding privately held or alternative assets, as well as automatic rollover IRA accounts originating from corporate retirement plan sponsors.

“Liberty Trust’s business aligns perfectly with Millennium Trust’s, and we have a dedicated and experienced team to serve these clients through the transition and beyond,” says Gary Anetsberger, CEO of Millennium Trust. “We are excited to build and expand relationships with these clients, and provide them the outstanding service that Millennium Trust is known for in the industry.”

“It was important for us to make sure that this transaction would work well for our clients,” says Glen Martin, CEO and co-founder of Liberty Trust. “Millennium Trust is the leader in this industry, and offers clients an outstanding experience and value.”

“We are thrilled with what Millennium Trust has to offer our clients,” adds Stephen Pauley, COO and co-founder of Liberty Trust. “We know they will receive top-level service with Millennium Trust.”

This transaction represents Millennium Trust’s sixth acquisition over the past three years.

Mercer Announces Recent Hires to Global and U.S. Market

Mercer has appointed two professionals to the global leadership team of its wealth business, as well as a senior hire for the U.S. market.

Raelan Lambert has been named global alternatives leader and Barb Marder has been named global product solutions leader, both with immediate effect. Additionally, John Mohr joins the company as senior investment consultant.  

“Raelan and Barb’s appointments demonstrate the continued growth and strength of our investments business, specifically our abilities in alternatives and our capabilities in digital disruption,” says Rich Nuzum, president of Mercer’s global wealth business. “Both bring strong track records and immense industry knowledge, and we look forward to seeing our clients benefit from their expertise in 2020 and beyond.”

As global alternatives leader, Lambert leads research, advice and solutions related to alternative asset classes. In addition to her work with clients and investment managers, she has operational responsibility for Mercer’s 170 alternatives specialists. Lambert is succeeding Donn Cox, who founded and led LP Capital Advisors and Pavilion Alternatives Group prior to it being acquired by Mercer in 2018. Cox will remain at Mercer as a senior adviser until March of 2020 to assist in transition. Lambert will also work closely with Bill Muysken, who continues in his role as Mercer’s global chief investment officer for alternatives.

Lambert continues to be based in Sacramento and reports to Rich Nuzum. Previous to this appointment, Lambert was the global head of private debt at Mercer. She joined Pavilion Alternatives Group in 2004, which was acquired by Mercer in 2018. Since 2005, she has held leadership roles in the firm’s core business units, including risk management, investment research and investment advisory.

As global product solutions Leader, Marder will play a role in the firm’s efforts to expand its digital disruption capabilities, specifically in the area of investments research delivery. In this position, she assumes direct leadership of MercerInsight, an online tool which provides research, data, and analytics on investment strategies to institutional investors, and Mercer FundWatch, which provides research and ratings on funds to individual investors and financial advisors. Marder is also responsible for managing relationships with investment managers.

She is based in Baltimore and reports to Nuzum.

Marder has worked in Mercer’s business units for over 30 years, including defined contribution (DC) consulting, international consulting and global mobility. She has led Mercer’s innovation hub for the past two years, and spent her first 20 years with the company as an actuary.

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