Products April 22, 2021

Investment Product and Service Launches

Ubiquity Retirement + Savings makes ESG options available to 401(k) plans, and HSBC launches AI powered multi asset index.

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Art by Jackson Epstein

Ubiquity Retirement + Savings Makes ESG Options Available to 401(k) Plans

Ubiquity Retirement + Savings has added environmental, social and governance (ESG) fund options to its 401(k) offerings, allowing plan sponsors to incorporate socially responsible investments into their plan’s fund menus.

Ubiquity’s turnkey ESG investment lineup includes low-cost mutual funds and exchange-traded funds (ETFs) from Vanguard and is currently available for participants in the firm’s Custom(k) and Reserve(k) plans.

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“Just like personal values, investment strategies are not one-size-fits all,” says Chad Parks, founder and CEO of Ubiquity. “With our new socially responsible investment portfolio, small business owners can empower employees with the opportunity to save for the future while applying their savings toward the causes they care about most.”

“Ultimately, it’s about the power of choice,” says Ashvin Prakash, Ubiquity’s director of product development. “Offering these options in 401(k)s will give small businesses everywhere a competitive edge and help promote plan participation.”

For more information, visit myubiquity.com.

HSBC Launches AI Powered Multi Asset Index

HSBC has launched the AI Powered Multi Asset Index (AiMAX), which it says is the first rules-based multi-asset investment strategy to use artificial intelligence (AI) as a method for constructing a diversified growth portfolio.

The introduction of AiMAX follows HSBC’s launch of AiPEX, an AI-powered stock index family using IBM Watson. HSBC says that since going live on August 9, 2019, the AiPEX Total Return Index (AIPEXTR) has outperformed the S&P 500 Total Return Index by 4.79 percentage points.

AiMAX was developed in collaboration with EquBot, an asset manager that developed an AI-based exchange-traded fund (ETF) and uses IBM Watson Discovery to retrieve and analyze millions of data points, from both traditional sources such as financial statements and non-traditional sources such as social media posts.

By building intuition and experience from historical information, and continuously learning as new information becomes available, AiMAX constructs a diversified portfolio of assets whose prices are poised for growth. AiMAX invests across 15 asset classes, spanning five investable asset types (developed equities, developed bonds, emerging markets, real assets and inflation assets) and a cash index.

“This is a new approach to multi-asset investing that combines cutting edge AI techniques and a time-tested diversification strategy to balance risk and return,” says David Odenath, head of quantitative investment solutions, Americas at HSBC Global Banking and Markets. “By using AI and big data to improve the accuracy of our capital markets assumptions, we are able to deliver a next generation asset allocation strategy to our clients.”

Compliance April 21, 2021

Senators Announce Retirement Security Bill for Military Spouses

Under the Military Spouses Retirement Security Act, small employers would be eligible for a tax credit of up to $500 per year per military spouse.

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Lawmakers have introduced a bill that would expand access for military spouses to employer-sponsored retirement plans.  

U.S. Senators Susan Collins, R-Maine; Maggie Hassan, D-New Hampshire; James Lankford, R-Oklahoma; and Michael Bennet, D-Colorado, have presented the Military Spouses Retirement Security Act, a bipartisan bill that would help spouses of active-duty service members save for retirement by increasing their access to employer-sponsored retirement plans.

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Under the act, small employers—with 100 employees or fewer—would be eligible for a tax credit of up to $500 per year per military spouse. It would be available for three years per military spouse, and the credit amount would be equal to $200 per military spouse, plus 100% of all employer contributions for that spouse, up to $300.

To receive the credit, small employers must allow a military spouse to be immediately eligible for retirement plan participation within two months of hire. Upon plan eligibility, a military spouse “must be eligible for any matching or non-elective contribution available to a similarly situated employee with at least two years of service and must be 100% immediately vested in all employer contributions,” according to the bill.  

“Like many Americans, spouses of active-duty service members often face challenges when it comes to saving for retirement. Military spouses also face one hurdle that many others do not: frequent moves and changes in employment,” Collins says. “By encouraging small employers to provide military spouses with accelerated access to retirement plans, employer contributions and vesting, our bipartisan bill would help to strengthen the financial security of these unsung heroes of our country’s national defense.”

The coronavirus pandemic has exacerbated threats to retirement security, especially for families of active-duty service members. According to the Department of Defense, about one-third of military service members experience a permanent change of station move every year. When service members move, their spouses often relocate with them, putting their own careers on hold.  

Another DOD report found that a quarter of military spouses are unemployed—a rate roughly four times the national average of 6.3% in January. Military spouses faced other disadvantages prior to the pandemic as well—and many continue to be underemployed and earn less than they are qualified for, or earn nothing at all.

“Every assignment and deployment impacts a family, and too often, that can mean sacrificing access to retirement benefits,” Lankford says. “This legislation encourages businesses to make it easier for military spouses to participate in retirement plans and ease some of the burdens of moving every few years. This is a simple way we can honor their sacrifices, make their life of service easier and help prepare them for their retirement.”

The full text of the bill can be found here.

 

 

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