Products July 23, 2020

Investment Product and Service Launches

Lincoln Financial Group releases new guaranteed lifetime income option; MUFG adds Broadridge loan tracker; and USI Advisors adds Investment Metrics portfolio solution.

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Art by Jackson Epstein

Lincoln Financial Group Releases New Guaranteed Lifetime Income Option

Lincoln Financial Group has launched the Lincoln PathBuilder, an in-plan guaranteed income option.

As the availability of pensions decreases and more retirement savers are concerned about market volatility, Lincoln PathBuilder was built to turn defined contribution (DC) retirement plan savings into monthly checks.

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“As an industry, we’ve focused on ensuring that retirement plan participants know they need to work to save enough for the retirement they envision,” says Jamie Ohl, executive vice president, president of Retirement Plan Services and head of Life & Annuity Operations at Lincoln Financial Group. “And while that is the important first step in building a financially secure future, we must also now focus on helping those participants translate their savings into a monthly check that will last through retirement—because, in planning for retirement, the ultimate outcome is income.”

MUFG Adds Broadridge Loan Tracker

MUFG Investor Services, an administration, asset servicing, banking and fund financing firm, has selected Broadridge Financial Solutions’ Sentry loan tracking and reporting technology to service its clients in the private debt space.

With recent growth in the private debt, private credit and direct lending market, and the growing demand for software capable of administering and handling loans, MUFG Investor Services has chosen to partner with Broadridge to implement its Sentry Loan Portfolio Management system. This web-based system, which Broadridge added to its solution set with its acquisition of ClearStructure Financial technology, allows MUFG Investor Services to manage all aspects of its loan administration and service clients.

“The private debt business is experiencing tremendous growth right now among middle markets and smaller firms, and we want to have a platform that caters to the needs of this thriving business,” says Treabhor Mac Eochaidh, head of Debt Services at MUFG Investor Services. “By adopting Broadridge’s system, we’re tapping into the most comprehensive and flexible loan system on the market and expanding our offerings to meet the evolving needs of our clients.”

“The Sentry solution is designed to address front-, middle- and back-office functionality, and positions firms for the future with optimal transparency and efficiency,” adds Eric Bernstein, Broadridge’s president of Asset Management Solutions. “In working with the Sentry system, MUFG Investor Services will be better able to streamline its processes and address the current demands of private debt funds.”

Besides managing day-to-day loan administration, the Sentry Loan Portfolio Management system allows users to monitor compliance issues and reconcile and aggregate data to streamline or automate processes.

USI Advisors Adds Investment Metrics Portfolio Solution

USI Advisor, Inc., a registered investment adviser (RIA) offering investment advice to retirement plans and endowments, has chosen Investment Metrics Portfolio Analytics and Reporting Solution to help with investment analysis and communications to its clients. 

USI Advisors will deploy the Investment Metrics Portfolio Analytics and Reporting Solution to perform investment analysis and reporting for its advisory practice across its defined contribution (DC), defined benefit (DB), endowment and foundation asset pools. With data aggregation and analytics, Investment Metrics enables performance measurement, investment analysis, peer comparison, benchmarking, attribution analysis and manager research. Using a library of standard and custom reports with analytics, USI Advisors can produce customized client reports that communicate investment insights with branded differentiation. 

“We chose Investment Metrics’ solution because we needed an integrated, flexible and scalable solution to meet the needs of our clients across our growing advisory practice. We were keen to have a single platform that could leverage our best practices to deliver investment insights across the various institutional plans that we advise,” says Michael Welz, president and chief investment officer. “While customization and scalability are important, we also need to differentiate our materials so that our consultants can communicate the appropriate investment insights to meet their respective clients’ needs.”

“Flexibility and scalability to serve different client segments in a bespoke manner on a consolidated platform was a key requirement for USI,” says Sanjoy Chatterjee, chief strategy officer of Investment Metrics. “With one integrated platform that meets the needs of investment analytics and reporting across various plan types, we bring efficiency, accuracy and consistency to address all of USI’s institutional investment advisory needs, while supporting their future growth seamlessly.”

Compliance July 23, 2020

State Unclaimed Property Programs May Help Find Missing Participants

The ERISA Advisory Council is asking the DOL to issue guidance on plan sponsor use of these programs which reunite people with unclaimed property as often as 72% of the time.

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The Advisory Council on Employee Welfare and Pension Benefit Plans has issued a report to Secretary of Labor Eugene Scalia on transferring amounts from uncashed checks from retirement plans to state unclaimed property programs.

In this lengthy report, titled “Voluntary Transfers of Uncashed Checks from ERISA Plans to State Unclaimed Property Programs,” the council found that state unclaimed property programs return property to people as often as 72% of the time. It recommends that the Department of Labor (DOL) issue guidance on these programs.

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The council—known as the ERISA [Employee Retirement Income Security Act] Advisory Council—says it is up to individual plans to decide if they want to engage with state programs. The council also notes that, unlike other countries, the U.S. does not have a clearinghouse or registry of missing participants.

In 2013, the council recommended that the DOL develop best practices for finding missing participants, and, in 2014, the DOL issued a Field Assistance Bulletin stating that, “consistent with their obligations of prudence and loyalty, plan fiduciaries must make reasonable efforts to locate missing participants or beneficiaries.”

Those recommendations included using certified mail, checking plan and employer records, running free electronic search tools and reaching out to plan beneficiaries. The DOL also said employers could use internet search tools, commercial locator services, credit reporting agencies, information brokers and/or investigation databases.

If plan sponsors are unable to locate the missing participants, they must transfer the benefits to an individual retirement account (IRA), taxable account or state unclaimed property program.

The council notes that, according to the U.S. Bureau of Labor Statistics (BLS), the median number of years that wage and salary workers had been with their employer in January 2018 was 4.2 years and that older Baby Boomers, those born between 1957 and 1964, held an average of 12.3 jobs between the ages of 18 and 52. As a consequence of holding so many jobs and, potentially, retirement accounts at various employers, workers can lose contact with those plans, the council says.

According to the SPARK [Society of Professional Asset Managers and Recordkeepers] Institute, 78% of uncashed checks are for less than $100, 98% are for less than $1,000, and only 0.2% are for an amount greater than $20,000. SPARK also says that, in 2017, 4.5% of retirement distribution checks, or roughly 225,000 checks, were uncashed. The council estimates that this amounts to more than $100 million a year, which could “make a meaningful difference in the financial security for many Americans.”

The council notes that many plans that cannot find a participant or beneficiary consider the sums forfeited and use them for the benefit of the plan, typically to pay plan expenses or reduce employer contributions. The IRS permits this but requires employers to repay the money to participants should they eventually be found. According to the American Benefits Council, 49% of plans use this method. The others used involuntary rollovers.

The council notes that virtually all 50 states have an unclaimed property program. These state unclaimed property programs maintain searchable websites, and there is also a national website, missingmoney.com, in which 40 states and three territories participate.

These state programs have professional staff members who search for owners using informational databases, news media and social media. They also set up booths at state fairs, sporting events and other public venues. They also try to find people through driver’s license bureaus and state income tax records.

According to representatives from the National Association of Unclaimed Property Administrators (NAUPA), states have a return rate of 72% for in-state property where a Social Security number is provided and where the value of the property is more than $100.

The council says that “state unclaimed property programs have a number of features that may increase the likelihood that missing participants will be reunited with their lost retirement savings. … The council is keenly aware of the administrative complexities associated with state unclaimed property programs. However, the council has kept in mind that the issue at hand is not a mandate for plans to transfer unclaimed property to the states but, rather, an option that a plan administrator may voluntarily choose to utilize.”

In conclusion, the council recommends that the DOL issue guidance that plans may use state unclaimed property programs. Earlier, the DOL had said that this was not a “preferred” option. The council is asking the DOL to reconsider this, as it believes these programs can be successful.

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