Deals and People August 17, 2023

Voya Financial Hires 2 to Grow Retirement Distribution

Expanding its wealth solutions distribution business, Voya is seeking growth in new markets, including mid-market segments.

Reported by

Voya Financial has expanded its retirement products wealth solutions distribution team, adding two positions focused on new-market growth, the firm announced Monday.

Shelly Nolfi

Voya appointed Shelly Nolfi and Holly Monday to the newly created positions of assistant vice president for client management and expansion, with both starting last week.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

Nolfi and Monday are responsible for leading the New York City recordkeeper and investment manager’s strategic growth in emerging, mid-market, large and government market segments. 

“Voya has an opportunity to expand our presence and further growth, particularly within the mid-market, which is why Voya is investing in additional resources within distribution to support this [market segment],” Sheila McCullough, Voya’s senior vice president and wealth solutions client engagement leader, said in the press release.

Holly Monday

Voya considers plans with assets between $50 million and $250 million the mid-market retirement plan segment. Voya representatives did not provide details for how the moves may affect their work with existing plan sponsor clients.

“These newly created positions within our client engagement team will allow for an even greater focus on being able to execute Voya’s plans to grow our existing scale and workplace benefits and savings products with our clients today, including solutions such as an entrance to the [health account solutions] market, managed accounts, executive benefits, emergency savings and Voya’s broader guidance and advice solutions,” McCullough wrote by email. “As we continue to purposefully expand our offerings where additional solutions may advance our customers’ overall experience, Shelly and Holly will play a critical role in our future success, given their broad breadth of client experience.”

Nolfi joined Voya eight years ago, working most recently with the client engagement division as a senior director focused on strategic planning and service delivery. Monday joins Voya from Fidelity Investments, working most recently as a vice president and managing director, and has extensive experience in sales, strategic planning, business development, relationship building and customer service.

Voya in June shuffled the client-facing retirement product distribution team following the exit of chief client officer William Harmon.

The new roles at Voya were added to build on “recently introduced positions” within the broader distribution team and, more specifically, Voya’s intermediary relations team, according to the release.

The firm expanded its wealth solutions retirement distribution earlier this month, moving to develop enhanced dual investment defaults.

Two of Voya’s competitors, Principal Asset Management and T. Rowe Price, expanded their retirement planning and product distribution capabilities with internal promotions and outside hires in July.

T. Rowe Price has plans to add headcount in retirement income distribution, expanding the core market field sales team to more than 30 heading into 2024, according to Mike Shamburger, head of core markets.

Principal recruited Jeff Cimini from Voya to take the newly created role vice president of planning, performance and transformation, and hired Sean Jordan as head of small and midsize business segments.

At T. Rowe Price, core market retirement plans are those with $50 million or fewer in plan assets. At Principal, small and midsize are defined as plans with $200 million or fewer in assets.

Data and Research August 17, 2023

Auto Default Contributions Hit High of 4.1% Among Fidelity Participants

The recordkeeper also found retirement saving balances rebounding with stronger market performance in Q2.

Reported by

Fidelity Investments reports the average default contribution rate for auto-enrolled employees hit an all-time high of 4.1% in the second quarter, according to analysis drawing on its participant pool released Thursday.

In Q2, 39% of employers offered auto-enrollment, which was relatively steady from Q1, and shows a continued commitment to automatic retirement savings as a mechanism to get, and keep participants contributing, according to the country’s largest recordkeeper. The data “shows that when participants are automatically enrolled in a plan and begin to see their savings grow, they are especially likely to remain enrolled in the plan,” Fidelity wrote in the report.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

The SECURE 2.0 Act leans heavily on auto enrollment to help reduce the workplace retirement savings gap. Starting in 2025, newly created retirement plans will be required to automatically enroll their qualified employees at a contribution rate between 3% and 10% of pay, and plan sponsors must escalate the contribution rate by 1percentage point annually until it reaches either 10% or a maximum of 15%.

Overall, retirement balances increased for the third straight quarter due in part to improving market conditions, according to the report. Average 401(k) balances were up 4% quarter-on-quarter, the average IRA was up 5%, and the average 403(b) account balance increased 5%. Retirement account balances for the sample group of participants quarter-over-quarter, and year-over-year, were:

 

Q2 2023

Q1 2023

Q2 2022

IRA

$113,800

$109,000

$110,800

401(k)

$112,400

$108,200

$103,800

403(b)

$102,400

$97,900

$93,300


The recordkeeper also reported a jump in both IRA account openings and asset levels. The total number of IRA accounts rose to 14.3 million, an 11% increase over Q2 2022, while total assets grew 14.3%, according to Fidelity.

Roth IRAs were the most popular option, making up 59.1% of all IRA contributions in the quarter, a trend that appears to be spreading among consumers, says Rita Assaf, vice president of retirement and college products for Fidelity.

“We’re seeing a general increase in Roth IRA interest,” Assaf says, noting that her team has been tracking Google search trends for the savings vehicle. “Roth IRA search terms over the last five years have increased a lot across all age groups.”

Assaf says consumer interest in personal finance and investing has increased generally, as well, as technology and resources become more “democratized.” She attributes the trend to online savings and brokerage options that don’t require an in-person meeting with an adviser, as well as a surge in social media content focused on financial wellness.

Younger investors (ages 18-35) were one of the drivers of IRA growth, Assaf notes, with Fidelity seeing a 34.4% increase of that age cohort in IRA accounts year-over-year.

“Those [younger investors] that have dipped their toes into Roth, when we ask why, they say they really like the control of it,” she says. They also say they hear about it “from parents, or friends, or social.”

In recent quarters, the data has also shown that women are becoming more engaged, and saving more, in both workplace and IRA savings, Assaf says.

“Just in general, women have become more engaged with their overall financial well-being, which is different than previous generations,” she notes. “Millennial women may have seen their mothers in the workplace, and been exposed to workplace plans when they became live in ‘70s, but it’s a relatively a new concept to own your financial wellness, and own your retirement savings….I think it’s encouraging, that young women as well are taking an active role in their finances.”

In less positive news, outstanding 401(k) loans increased slightly, with the percentage of participants with a loan outstanding rising to 17.1% in Q2, compared to 16.6% last quarter. Those rates were still higher than during the COVID-19 pandemic, Fidelity noted.

Fidelity also noted that total 401(k) savings rates were slightly lower than the prior quarter, clocking in at 13.9% when including employer contributions, as compared to 14%. That rate is still higher than Q4 2022 (13.7%) and Q3 2022 (13.8%), but not yet at Fidelity’s suggested rate of 15%.

«