Products December 17, 2020

OneAmerica Introduces Combo Retirement Plans Solution

The tool allows tax-exempt plan administrators to manage several DC retirement plans simultaneously.

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OneAmerica has released a tool to combat the complexity of administering multiple retirement plans.

Called the ComboPlan solution, the feature allows defined contribution (DC) plan sponsors of tax-exempt organizations to administer several plans at once, including 401(k), 401(a), 403(b) and 457 plans. The solution provides one point of contact and a single website experience for the participant, thereby reducing multiple point of references and account logins.

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According to the Plan Sponsor Council of America, four in 10 employers in the nonprofit and governmental space offer more than one type of retirement plan, and administering multiple plans simultaneously can be a confusing process for employers with little knowledge of the retirement industry. 

Kevin Kidwell, vice president of national tax-exempt sales at OneAmerica, explains to PLANSPONSOR that managing several plans at once can increase regulatory concerns if the plans are not administered correctly. “We want to keep the plans similar in terms of their definition of compensation, eligibility and contribution remittances, so that plan sponsors aren’t involved in a compliance failure,” he says. 

Because the retirement industry increasingly focuses on 401(k)s, the largest DC plan type, other retirement plans such as 403(b)s, 401(a)s and 457(a)s are typically left out. With OneAmerica’s ComboPlan solution, administrators can properly manage different types of plans simultaneously, Kidman says. “[The industry] doesn’t train administrators on 403(b), they train them on 401(k) plans,” he continues. “We built our system so that it’s for all 401(k), 403(b) and 457(a) plans.”

Jennifer Jenkins, regional vice president of tax-exempt markets at OneAmerica, says the ComboPlan solution provides an effective way to streamline plans, especially for employers challenged by COVID-19. Duplicating tasks, such as payroll contributions and census retrievals, increases costs, she tells PLANSPONSOR. “If they’re working with tighter margins and fewer employees, this efficiency is now more important than ever,” Jenkins says.

“At some recordkeepers, the more complex the multiple plans, the more costs the employer faces,” Kidwell adds. For OneAmerica clients using the ComboPlan solution, it’s simply a few additional signatures, he notes.

Compliance December 17, 2020

Two Pro-ESG Investing Bills Introduced in House

Two bills proposed by Congressional Democrats would require certain parties to disclose whether and how they are taking environmental, social and governance factors into account while managing institutional investment portfolios.

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Several high-profile Democrats in the U.S. House of Representatives have introduced bills aimed at promoting the acceptance and use of environmental, social and governance (ESG) investments by individuals and institutions.

The lawmakers are Representatives Andy Levin, D-Michigan, vice chair of the House Education and Labor Committee and member of the Subcommittee on Health, Employment, Labor and Pensions (HELP); Brendan Boyle, D-Pennsylvania, member of the House Ways and Means Committee; and Cindy Axne, D-Iowa, member of the House Financial Services Committee.

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The trio are the lead sponsors on two distinct bills: the Sustainable Investment Policies Act and the Retirees Sustainable Investment Policies Act. According to Levin, Boyle and Axne, the bills would give workers a bigger say in how they invest their retirement savings by requiring plan investors and fiduciaries to take ESG factors into account and explain to beneficiaries how they consider such factors when making investment decisions.

“The investment process should be transparent to them and in line with workers’ values,” Levin says. “Fortunately, we are seeing that there is a convergence of sustainability values and diversity priorities in governance with durable performance over time. Companies perform better if they are aimed at where the economy is going, which is toward sustainability and inclusion across all aspects of how we build, how we make things, how we live and how we move about.”

Boyle says the legislative package “allows Congress to give teeth to what industries, Wall Street and individual investors have made increasingly clear.”

“Taking environmental, social and corporate governance principles into consideration isn’t just good public relations, but is the viable, responsible and profitable approach for America,” Boyle says.

Axne adds that it is “obvious that companies that invest in their future will do better over the long run, and that’s what sustainable investing is all about.

“We as investors should understand how our advisers are evaluating these risks, and having this information will help ensure people can control what their savings is supporting,” the lawmaker says.

Technically speaking, the Sustainable Investment Policies Act amends the Investment Advisers Act, while the Retirees Sustainable Investment Policies Act amends the Employee Retirement Income Security Act (ERISA). Both bills, as is the normal course, would have to be passed by committee and then the full House and Senate prior to becoming law—a prospect that is frankly unlikely so late in the current Congress, especially with a major debate about a coronavirus relief package taking up a lot of lawmakers’ time and attention. However, it is also likely the bills will be reintroduced during the next term.

The introduction of the bills comes shortly after the Department of Labor (DOL) published its own final regulations pertaining to the use of ESG factors by retirement plans. Sources say the final DOL regulations include some significant changes compared with the department’s initial proposal. Chief among these changes is the fact that the text of the final rule no longer refers explicitly to “ESG.” Rather, it presents a framework that emphasizes that retirement plan fiduciaries should only use “pecuniary” factors when assessing investments of any type—which is to say that they should only use factors that have a material, demonstrable impact on performance.

In this sense, the rule does seem to leave ample room for the use of ESG-minded investments, presuming these types of investments are assessed in a purely economic manner and that their financial features make them prudent investments.

These government actions come at a time when demand for ESG investing is growing among American individuals and institutions. A survey by Willis Towers Watson found that while only 27% of employers currently include ESG investments in their executive compensation programs, this figure is slated to double to 54% in the next three years.

“Pressure has been mounting for companies to demonstrate a commitment to ESG,” says Heather Marshall, senior director, executive compensation, Willis Towers Watson. “Some investors are becoming increasingly vocal on environmental issues, while the pandemic and social unrest are accelerating the focus on social issues by many boards. This is driving companies to consider incentive plan metrics that link variable pay outcomes to the successful execution of ESG aspects of their business strategies.”

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