North Carolina lawmakers introduced House Bill 496 to the state’s general assembly this week to help more workers save for retirement.
Legislators in the Tar Heel State supporting the legislation argue the bill is necessary to address the lack of retirement savings options for employees without access to a retirement plan at work. The bill was sponsored by State Representatives Jarrod Lowery, Jeffrey McNeely, Jon Hardister and Harry Warren, all Republicans.
“The General Assembly finds that too many North Carolina citizens have no or inadequate savings for retirement, and an estimated 1.7 million North Carolina working families, including employees, independent contractors, and the self-employed, have no access to an employer-sponsored retirement plan or program or any other easy way to save at work,” the draft text states. “More adequate, portable, low-cost, and consumer-protective retirement saving by North Carolina households will enhance their retirement security and ultimately reduce the pressure on state public assistance programs for retirees and other elderly citizens and the potential burden on North Carolina taxpayers to finance such programs.”
Data from the AARP show that 48% of U.S. private sector workers aged 18 to 64—57 million people—do not have access to an employer-sponsored retirement plan. According to the AARP data, employers at small businesses are less likely to provide a retirement plan, and that access differs substantially by race, ethnicity and gender.
Coast to Coast
Across the U.S., 18 non-federal government entities have enacted retirement savings programs: 16 states and two cities, according to data compiled by the Center for Retirement Initiatives at Georgetown University’s McCourt School of Public Policy.
By proposing the state program, North Carolina lawmakers joined a group of nine states with active legislative proposals or study commissions in 2023. Alabama, Alaska, Florida and South Dakota are the only states without legislation or a commission on the topic.
The bill would make it state policy to assist private sector “working households,” particularly those with low or moderate income, to voluntarily save for retirement and to retirement savings and other retirement plans for employees in the state.
The legislation, if passed, would establish the North Carolina Small Business Retirement Savings Board to administer the program, the bill states.
“The General Assembly intends to establish a North Carolina Work and Save Program that will use the services of competent and qualified private-sector entities selected by the North Carolina Small Business Retirement Savings Program Board to administer the Program and manage the funds on behalf of the Program participants,” according to the bill text.
After the bill was filed in the North Carolina House of Representatives on Tuesday, it passed a first reading one day later and was referred to the House Appropriations Committee on Wednesday, according to the North Carolina General Assembly website. A timeline for the committee to review the bill is unclear.
A request for comment on the bill made to the Lowery’s office was not returned.
State Assets Increase
According to Georgetown data, two cities and 14 of the states have built auto-IRA programs. The California, Connecticut, Illinois and Oregon programs are mandatory for employers to participate.
Breckinridge launches dividend income strategies; Eastspring offers CIT with emerging markets exposure; Nomura starts fund focused on private and public credit; and more.
Updated to remove an announcement from Eastspring Investments Services Pte Ltd. upon company request for regulatory reasons.
Breckinridge Launches Dividend Incomes Strategies, Including ESG-focus
Asset manager Breckinridge Capital Advisors Inc. has expanded into dividend equities with its new High Quality Dividend Strategy and Sustainable High Quality Dividend Strategy. Josh Perez, portfolio manager and director, corporate research, will manage the strategies with oversight from Ognjen Sosa, the firm’s CIO.
The High Quality Dividend Strategy is designed to leverage Breckinridge’s corporate credit ratings to identify high-quality, large-cap companies with a record of paying dividends. The Sustainable High Quality Dividend Strategy uses the same approach while also emphasizing environmental, social and governance factors.
“A company’s credit quality historically has been a reliable predictor of the robustness of its dividend, especially in times of economic distress,” Sosa said in a statement. “Leveraging our fixed income heritage and expertise and relying on our bottom-up credit research and forward-looking approach, we believe our dividend income strategies will complement our existing capabilities providing investors with a differentiated equity SMA offering.”
The Boston-based asset manager has $42 billion in assets under management as of December 31, 2022.
Nomura Announces Fund Focused on Private Credit
Nomura Private Capital, a division of Tokyo-based Nomura Holdings Inc., announced its first investment product, the Nomura Alternative Income Fund.
The NAIFX is designed to provide diversified exposure to private and public credit sectors, creating easy access to such investment by removing operational and suitability-related hurdles, according to the firm, which has provided an initial $100 million to seed this fund.
“Based on client demand and feedback, the team worked relentlessly over the last year to get this fund off the ground,” Robert Stark, NPC’s head of investment management in the Americas, said in a statement. “We aspire to become a partner of choice to our clients in supporting the shift from public to private markets and are excited about the opportunities for our clients and for Nomura.”
NPC has begun to engage registered investment advisers, bank and trust departments and family offices to access private credit through the fund. The investment team for the fund is led by CIO Matthew Pallai.
The launch of the inaugural fund is the first of several products that NPC plans to bring to market over the coming years, according to the New York-based firm.
American Century Launches Floating Income ETF
American Century Investment Services Inc. has brought a new actively managed exchange-traded fund to the New York Stock Exchange called the American Century Multisector Floating Income ETF (FUSI).
The Kansas City, Missouri-based firm announced that FUSI is an actively managed fund intended to generate yield by investing across several investment-grade floating-rate security types, such as collateralized loan obligations, commercial mortgages, residential mortgages, corporate credit and other similarly structured investments. It may also invest up to 35% of its portfolio in below-investment-grade securities, including bank loans and other related floating-rate debt.
“We believe a diversified floating rate mandate has the potential to mitigate downside risk and increase income, and we are excited to offer this on our ETF platform,” Sandra Testani, American Century’s vice president of ETF product and strategy, said in a statement.
The fund is managed by Charles Tan, senior vice president and co-CIO of global fixed income, Peter Van Gelderen, vice president and senior portfolio manager, and Jason Greenblath, vice president, senior portfolio manager and director of corporate credit research.
ISS ESG Launches US Cyber Risk Index
ISS ESG, the sustainable investment arm of Institutional Shareholder Services Inc., has launched the ISS ESG US Cyber Risk Index, which supports investors in identifying and tracking companies with low or negligible cyber-related risks based on the ISS ESG Cyber Risk Score.
The ISS ESG Cyber Risk Score is designed to signal the relative likelihood that an organization may suffer a material cybersecurity incident within the next 12 months, based on its external security posture. ISS ESG regularly collects global risk indicators that reflect a company’s cybersecurity risk behaviors, incorporating elements indicative of organizational security posture on endpoints, software services and infrastructure configuration, according to the New York-based division of ISS.
The ISS ESG US Cyber Risk Index constituents are drawn from U.S. large- and mid-cap stocks, and only issuers with a rating of low to negligible risk are eligible. The index is market cap-weighted and rebalanced quarterly.
“The cost of corporate cyber breaches can run in the hundreds of millions of dollars per incident,” Hernando Cortina, head of index strategy at ISS ESG, said in a statement. “For investors, the launch of ISS ESG’s US Cyber Risk Index provides an investable tool to screen for companies with low or negligible expected relative exposure to cyber breaches within the next 12 months.”
ISS also owns PLANADVISER.
OCIO Provider Taiko Announces Expanded Access to Investment Strategies, Alts
Outsourced CIO provider Taiber Kosmala and Associates LLC, better known as Taiko, a subsidiary of Advisor OS LLC, has launched a platform upgrade that efficiently sources investment solutions for advisers. The new service provides access to exclusive alternative investments, along with a highly curated gallery of separately managed accounts and custom portfolio strategies.
The Chicago-based firm’s new Strategy Gallery supplements Taiko’s investing platform, allowing advisers to provide bespoke investment solutions for clients.
“This new interface gives advisers an interactive, yet custom, curated gallery of investments, creating a more efficient pathway to source diversified investment solutions in both public and private markets,” Chris Horvath, a Taiko managing director, said in a statement.
Advisers using the platform receive access to customized messaging and strategy updates for each investment opportunity, empowering them to communicate effectively and educate clients about new opportunities and allocations.
Nationwide Adds Buffered Fund Annuities to Guard Against Downturns
Nationwide Mutual Insurance Co. has added a new category of investment options to Nationwide Monument Advisor, a flat-fee, investment-only variable annuity.
Monument Advisor is offering two new series of defined outcome funds by Invesco: the Invesco V.I. S&P 500 Buffer Funds and the Invesco V.I. NASDAQ Buffer Funds, according to Columbus, Ohio-based Nationwide.
The Invesco V.I. S&P 500 Buffer Funds and the Invesco V.I. NASDAQ Buffer Funds are designed to provide exposure to equity growth, protect against market downturns and respond to changing market conditions. Invesco will professionally manage the funds, which include an initial 10% buffer providing downside protection against market declines, according to Nationwide.
“Defined outcome funds can help shield investors from volatile markets like we’re seeing today, allowing them to stay invested without assuming all the downside risks,” Mike Morrone, vice president of business and development and product management at Nationwide Insurance, said in a statement.
In addition to providing growth exposure with downside protection, the funds can offer tax-efficient flexibility, allowing clients to respond to market threats and opportunities by moving assets across the funds without tax consequences. They also offer liquidity, transparency and clarity about expected returns and daily valuation information.
