Deals and People December 4, 2014

New York Life Investment Management to Acquire IndexIQ

New York Life Investment Management is making its first entry into the ETF industry with the acquisition of IndexIQ.
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New York Life Investment Management announced the signing of a definitive agreement to acquire IndexIQ, a firm specializing in liquid alternative exchange-traded funds.

New York Life’s MainStay Investments business will leverage the acquisition of IndexIQ to enter the exchange-traded fund (ETF) market “with dominant position in alternative ETFs,” the firm says, calling the acquisition its first entry into the ETF industry.

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The combination of the two companies brings New York Life’s global asset management franchise and distribution platform together with IndexIQ’s ability to launch alternative ETF products. Upon closing of the transaction, IndexIQ’s services will be delivered through New York Life’s MainStay Investments platform, opening new capabilities to investors seeking exposure to alternative investments through ETFs. It will add $1.5 billion to MainStay’s $101 billion in assets under management, according to the firms.

“Our entry into the ETF space is a significant leap forward for New York Life Investment Management and offers remarkable opportunities all around,” says Drew Lawton, chief executive officer of New York Life Investment Management. “Retail and institutional investors are increasingly attracted to ETFs because they offer a cost-effective, transparent way to access investment opportunities across asset classes around the globe.”

Lawton says IndexIQ has established itself as an innovator in liquid alternative ETFs, adding that New York Life intends to leverage IndexIQ’s capabilities to become a leading provider of non-traditional ETF solutions to the investment markets.

Among its 12 fund offerings, IndexIQ offers the IQ Hedge Multi-Strategy Tracker ETF, which aims to replicate the risk-adjusted return characteristics of hedge funds using strategies that include long/short equity, global macro, market neutral, event-driven, fixed income arbitrage, emerging markets and other strategies commonly used by hedge fund managers. IndexIQ also offers ETF models and separately managed account services.

The transaction is expected to close in the first half of 2015. Terms of the transaction were not disclosed. More information is available at www.mainstayinvestments.com and www.indexiq.com.

Data and Research December 3, 2014

Plan Sponsors Increasing Encouragement to Save

PSCA’s 57th Annual Survey shows plan sponsors are increasing efforts to encourage retirement savings among employees.
Reported by

Savings rate suggestions, greater adoption of automatic enrollment and financial wellness programs are among efforts plan sponsors are making to improve employee retirement savings outcomes, finds the 57th Annual Survey of Profit Sharing and 401(k) Plans from the Plan Sponsor Council of America (PSCA).

Nearly 22% of companies surveyed said they provide a suggested savings rate to employees—18.8% suggest 6% and 46.5% suggest a rate higher than 6%. Half of all plans have an automatic enrollment feature, up from 47.2% in 2012, and 44% of all plans have an auto-escalation feature.

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The survey found 16.7% of respondents offer a comprehensive financial wellness program to employees.

Account balances increased by 18.2% since last year. More than 88% of eligible participants have an account balance, and 80.3% of eligible participants contributed to their plans.

Companies reported they contributed an average of 4.7% of pay to their plans in 2013 (up from 4.5% in 2012 and 4.1% five years ago) Eighty percent of plans make a match on employee contributions and 98% of those plans made the match in 2013.

Forty percent of plans that do not offer auto-enroll state that they are satisfied with their participation rates and one-third (32.5%) cite corporate philosophy as why they do not use it. The survey found plans with an auto-enroll feature have participation rates 10 percentage points higher than plans that do not.

“Plan sponsors are spending more time and effort to educate, promote and encourage saving for the long-term,” says PSCA Executive Director Robert Benish.  “They are making great strides in adopting new plan design features, investments and financial wellness programs that are making a positive impact on participant outcomes.”

For further information, or to purchase a copy of the survey report, go to http://www.psca.org/57thAS_Report.

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