Deals and People February 9, 2024

Retirement Industry People Moves

Federated Hermes names national sales leader; CBIZ Investment Advisory announces president; Fidelity bolsters tax-exempt team; and more.

Reported by

Federated Hermes Names National Sales Leader

Asset manager Federated Hermes promoted Jim Wojciak to national sales manager for retirement, insurance and sub-advised products, effective December 1, 2023, a spokesperson confirmed.

Jim Wojciak

Wojciak’s promotion followed the retirement of his predecessor, Steve Cronin. Wojciak was previously a senior retirement consultant at the firm. He now leads Federated Hermes’ retirement sales efforts and business development with insurance companies and will oversee the company’s sub-advisory relationships.

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

“Jim’s years of experience in the retirement space and relationships make him an ideal leader for Federated Hermes’ retirement efforts,” said Paul Uhlman, president of Federated Securities Corp., by email. “He will oversee the development and execution of strategic sales initiatives that meet our retirement clients’ needs and promote sales growth for the company.”

Wojciak reports to Bryan Burke, director of strategic solutions.

CBIZ Investment Advisory Names New President

Stan Milovancev

CBIZ Inc. announced it named Stan Milovancev president of CBIZ Investment Advisory Services LLC, as of January 1.

“Milovancev is filling a newly created leadership role that consolidates investment advisory services under one business,” a company spokesperson said by email. “Stan has played an integral role in developing national programs and activating high-performing teams. He brings over 30 years of experience, along with business acumen, strategic direction, and overall leadership skills, to the role.”

As president, Milovancev will oversee CBIZ Investment Advisory Services, a wholly owned subsidiary of CBIZ Inc.

CBIZ IAS provides asset management to institutional and private clients. CBIZ manages approximately $62 billion in assets under advisement as of December 31, 2023.

Fidelity Investments Bolsters Tax-Exempt Team

Fidelity Investments hired Brian Giles to the role of vice president of sales support for the tax-exempt market, a spokesperson confirmed. Giles was previously a regional vice president and East Region practice leader for tax-exempt retirement plan sales at OneAmerica.

TIAA Expands Role to Name Head of Institutional Lifetime Income Team

Christopher Stickrod

In March 2023, Colbert Narcisse, TIAA’s chief product and business development officer, announced that Christopher Stickrod, based in Chicago, was named executive vice president and product general manager for institutional managed solutions. Stickrod’s role has now expanded to oversee TIAA’s institutional lifetime income team.

This includes overseeing TIAA’s flagship fixed annuity, TIAA Traditional, and the TIAA CREF variable annuities. As leader of institutional managed solutions, Stickrod will continue to oversee RetirePlus product management, which now has more than $30 billion in assets and more than 400,000 individual participant accounts across nearly 500 institutional clients.

Stickrod’s appointment is effective immediately. Prior to joining TIAA, Stickrod spent 17 years with Nuveen, TIAA’s asset manager.

SEI Appoints New CFO

Sean Denham

SEI announced Sean Denham as its new executive vice president and chief financial officer, reporting to CEO Ryan Hicke, effective March 18.

His appointment as CFO will take effect the day after the resignation of current CFO Dennis McGonigle, whose departure plans were announced by SEI in July 2023. 

Upon his appointment, Denham will be responsible for leading finance and accounting, corporate controllership, business management, enterprise risk management and investor relations functions, as well as administering the internal audit function.

For the last 20 years, Denham has served in various leadership roles at Grant Thornton, most recently as regional managing partner for the Atlantic Coast, national audit growth leader and the national special purpose acquisition company leader. As an audit partner in the firm, he served some of Grant Thornton’s most prominent clients, including public and private companies in the professional services industries.

T. Rowe Price Promotes Company Veterans

T. Rowe Price Group Inc. named Kevin Collins and Francisco Negrón to take new positions leading the firm’s businesses serving the U.S. intermediary and retirement services channels, effective March 1.

Collins will become head of U.S. intermediaries, T. Rowe Price’s business supporting financial advisers and consultants in the intermediary channel. He will report to Dee Sawyer, who was promoted to head of global distribution as of January 1. Sawyer is responsible for sales, marketing and client service, taking over after the retirement of Robert Higginbotham.

Since 2019, Collins has been the head of retirement plan services, which provides investments and recordkeeping services for sponsors and participants of workplace retirement plans. Collins joined T. Rowe Price in 1994 and has held various leadership positions.

Concurrent with Collins’ move, the division’s Annie Brown and Jim Zurad will take roles as co-heads of USI Wealth Management. Brown will lead the unit’s national accounts management team across the broker/dealer, global bank and platform groups, while Zurad will lead its field sales organization. Both will report to Collins.

Negrón will succeed Collins as head of retirement plan services and report to Sawyer. For the past 12 years, Negrón has overseen RPS’ client services organization, which includes the relationship management, client account management, plan compliance consulting and participant engagement functions.

Negrón joined T. Rowe Price in 1987 and is a member of MOSAIC, the company’s business resource group focused on attracting and retaining ethnically diverse associates while promoting an inclusive culture and the firm’s Latinx Heritage community.

Manulife Investment Management Names Global Head of Private Markets

Anne Valentine Andrews

Global asset manager Manulife Investment Management announced Anne Valentine Andrews will join the firm on March 4 as global head of private markets.

With more than 25 years of asset management and alternatives experience, Andrews will lead all investment teams and direct the overall strategy, business development and growth of Manulife IM’s private markets business. She and her team will also work closely with the firm’s global product group and the business leads to drive private market product innovation across the institutional, retail and retirement channels.

Based in New York, Andrews will report to Paul Lorentz, Manulife IM’s president and CEO. 

Andrews joins Manulife IM from BlackRock, where she spent the past nine years, most recently serving as managing director and global head of infrastructure and real estate.

Compliance February 9, 2024

What Could Taxing 401(k)s Look Like? And How Likely Is It?

A few informal proposals have been made in recent years, and none got very far.

Reported by

A study published by Andrew Biggs and Alicia Munnell for the Center of Retirement Research at Boston College advocated taxing tax-advantaged plans in order to help pay for Social Security. The study provoked a wider debate on the utility of qualified plans and the need to find ways to pay for Social Security, which is projected to have to cut benefits by about 23%, starting in 2034.

The total cost to federal revenue of qualified defined contribution accounts, both employer-sponsored and individual retirement accounts, comes out to about $185 billion annually, according to Biggs and Munnell. Biggs says the tax break “really doesn’t raise retirement savings very much,” because much of the tax benefit goes to higher earners who would be saving in any case. The tax preference for retirement accounts prompts many people, especially wealthier savers, to “simply shift money from taxable accounts to untaxed accounts;” those savers are “in no danger of running out of money,” Biggs says.

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

Beyond simply removing tax-preferred status, the Biggs-Munnell study also discussed subjecting employer retirement contributions to FICA taxes so that revenue can be collected for Social Security and Medicare upfront, similar to how traditional employee contributions do not discount an individual’s taxable income for FICA.

Biggs acknowledges that this reform is a bit less straightforward, because calculating income this way would also entitle those workers to more Social Security benefits when they retire.

Legislative Proposals

But what proposals have actually been made to modify the tax status of DC plans, regardless of the benefits to Social Security?

One such proposal came in 2014 from former Representative David Camp, R-Michigan, then the chairman of the House Committee on Ways and Means. His proposal which would have frozen inflation adjustments for DC plan contributions for 10 years. That would have the effect of gradually reducing the real cap on tax-advantaged contributions and potentially raising more revenue. The proposal was issued as a discussion draft and was never voted on.

Other potential proposals were discussed in 2017 in the lead-up to the Tax Cuts and Jobs Act. According to Brigen Winters, a principal in Groom Law Group and an organizer of Save Our Savings, an advocacy that pushed back against the 2017 proposals, some lawmakers wanted to push more savings into after-tax Roth source accounts, so the money saved would be taxed up front to raise more short-term tax revenue.

Specifically, Winters says some lawmakers proposed limiting traditional pre-tax contributions to less than Roth contribution or requiring that at least 50% of employee contributions be made on an after-tax basis. None of these proposals made it into proposed legislation.

Winters says these proposals were partially designed to satisfy Congressional budget scoring rules, which evaluate the cost of all federal spending bills based on their impact on federal revenues in a 10-year window from the date of enactment. Since traditional contributions are pre-tax and Roth post-tax, Roth contributions generate more tax revenue within the 10-year window than traditional pre-tax contributions. In reality. traditional contributions are merely tax-deferred, so they are taxed as income when they are withdrawn from the retirement account, whereas the earnings in a Roth account are tax-exempt.

The so-called “Rothification” proposals such as these faced industry resistance because the short-term tax incentive makes it easier for many to save for retirement. The Rothification proposals “never got very far,” Winters says.

Winters notes that the perception that Roth accounts generate more federal tax revenue than traditional accounts is misleading, and some lawmakers have caught on and proposed either taxing the interest on large Roth balances or compelling distributions from them. These proposals also have not advanced into legislation.

There was an echo of this Rothification debate during discussions ahead of passage of the SECURE 2.0 Act of 2022, Winters explains. A provision of SECURE 2.0 requires catch-up contributions by highly compensated employees to be made on a Roth basis, an inclusion made solely to generate revenue in the short term to pay for other provisions in the bill. Winters says that industry did not push back because the legislation, as a whole, was very popular with groups in the retirement industry.

Lastly, Winters says Camp’s 2014 proposal to de-index contribution limits from inflation for a limited period of time came up again in 2017 during discussion of the Tax Cuts and Jobs Act. Once again, he says, it was resisted and defeated by industry.

In recent years, efforts to tax qualified plans or erode the contribution levels through inflation have all been defeated before any formal legislative proposal could even be made. But that does not mean it is not on people’s minds, both in Congress and in academia.

«