Products March 13, 2025

Product & Service Launches

Apollo, Athene and Motive Partners purchase a guaranteed income provider; Sun Life partners with Workday Wellness; Capital Group launches 8 model ETF portfolios; and more.

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Apollo, Athene, Motive Partners Purchase Guaranteed Lifetime Income Solution

Three firms—Apollo Global Management Inc., Athene Annuity and Life Co., and Motive Capital Management LLC—announced the purchase of Advantage Retirement Solutions LLC, a guaranteed lifetime income solutions and technology provider for defined contribution plans.

ARS offers a multi-carrier technology, Lifetime Income Builder, that enables guaranteed lifetime income to fit into defined contribution plans, including directly into target-date-fund products.

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The investment in ARS was made by the acquisition of all outstanding shares by a new entity owned by Athene and funds advised by Motive Partners, according to the buyers’ announcement. ARS will continue to operate independently as it seeks to scale its offerings across the DC ecosystem.

The Lifetime Income Builder technology is currently used in the State Street GTC Retirement Income Builder Series, sponsored by Global Trust Co., which is available across several recordkeeping platforms. Lifetime Income Builder includes annuity guarantees backed by multiple insurers within a TDF construct.

Sun Life US Partners With Workday Wellness to Enhance Benefits Offerings

Sun Life U.S., a provider of employee benefits and human resource technology solutions, is now a strategic Workday Wellness partner. Workday Wellness is an AI-powered solution that aims to improve the benefits management experience by offering employers a “real-time view” into the benefits and wellness programs that employees use and value the most.

Sun Life has developed a portfolio of data connection solutions, known as Sun Life Link, which automate benefit data exchanges to and from Sun Life employer clients through the Workday platform. The automation of these tasks aims to free up HR teams so they can focus on the projects and aspects of their job that “really matter to them.”

As a Workday Wellness partner, Sun Life is also developing additional application programming interfaces that enhance connectivity for employers by integrating more employee data for functions that include plan set-up; enrollment and eligibility; absence management; and billing.

Capital Group Launches 8 Active ETF Model Portfolios

Capital Group has launched eight active model portfolios comprising its all-active exchange-traded funds. The launch comes in response to the growing trend of financial professionals seeking active ETF model solutions, according to Capital Group.

The company offers 22 ETFs in the U.S., sold by more than 35,000 financial advisers and composed of more than $53 billion in assets under management.

Details of the full suite of Capital Group ETFs can be found here, along with details on the range of model portfolio solutions here.

Lane42 Investment Partners Launches as Alternative Asset Management Firm

Lane42 Investment Partners LLC announced its launch as an alternative asset management firm focused on pursuing compelling opportunities in both public and private markets across asset classes.

Lane42 intends to provide flexible debt and equity capital solutions to both public and private companies, while also pursuing investments across liquid markets and through multiple market and economic cycles.

The firm was founded by Scott Graves, who will serve as its CEO and CIO. It will be headquartered in Los Angeles, with a presence in New York. Graves brings more than 30 years of experience across public and private credit and equity alternative investment strategies.

TCW Launches Emerging Markets Equity Fund

The TCW Group Inc., a global asset management firm, announced the TCW White Oak Emerging Markets Equity Fund. The fund is an actively managed mutual fund that seeks to provide long-term capital appreciation by investing in a broad range of equity securities from emerging market economies.

The TCW White Oak Emerging Markets Equity Fund is sub-advised by White Oak Capital Partners Pte. Ltd.

The fund invests primarily in a set of emerging markets stocks beyond traditional large-cap companies to include small- and mid-caps. The fund is managed by Prashant Khemka, Manoj Garg and Wen Loong Lim.

Benefits March 12, 2025

US Corporate Pension Finances Suffered ‘Worst Monthly Loss Since 2022’

Weak markets and rising liabilities resulted in sinking pension funding levels in February.

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U.S. corporate pension funds, over the past year, experienced growing surpluses, as strong market returns and higher interest rates consistently improved the health of corporate pension finances. 

However, in February, corporate pension funding ratios declined, a result of both weak equity returns and an increase in the value of pension plan liabilities, breaking a three-to-four-month streak of month-over-month increases.

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Funded Status Declines

Investment consultant Wilshire estimated that the funded status of corporate U.S. pension plans in the S&P 500 Index declined by 1.1% in the month of February, to 104% from 105.1%. Liability values increased by 2.5% but were offset by a 1.4% increase in the value of assets.

“February’s funded status declined due to an increase in the liability value,” said Ned McGuire, a managing director at Wilshire, in a statement. “Corporate bond yields, which are used to value corporate pension liabilities, fell by nearly 25 basis points—the largest monthly decrease since December 2023. This drop occurred as consumer confidence experienced its largest monthly decline since August 2021.”

According to Milliman, the largest 100 corporate pension plans in the U.S. saw their funding ratios decline month over month to 104.8% from 106%. Positive returns for fixed income resulted in a 1.9% investment gain during the month but were offset by an increase in pension liabilities.

According to Milliman, while pension assets increased by $18 billion, a decline in monthly discount rates to 5.36% at the end of February from 5.60% at the end of January resulted in a $13 billion decline in pension surpluses. 

“Gains in fixed income investments helped shore up the Milliman 100 pension assets but were not strong enough to counter the sharp discount rate decline,” said Zorast Wadia, a Milliman principal and consulting actuary, in a statement, noting that plan sponsors with prudent asset-liability matching strategies will be able to preserve the funded status improvements they have made. 

According to October Three Consulting, pension finances suffered their worst monthly loss since 2022, a result of both poor equity returns and lower interest rates. According to October Three, pension plans with a 60/40 portfolio saw their funding ratio fall to almost 99% from almost 102%. 

Plans with an 80% allocation to fixed income saw their funding ratios fall to between 99% and 100% from a range between 100% and 101%.

LGIM America’s monthly Pension Solutions Monitor noted that pension funding ratios, benchmarked by a 50/50 portfolio, fell to 112.6% in February from 115.5% in January.

According to WTW, the WTW Pension Index, which tracks the health of a hypothetical 60/40 portfolio, funding ratio decreased 3.5% in February to an index level of 120.2.

Weak Market Returns

In February, the S&P 500 fell 1.3%, the Nasdaq Composite Index fell 3.9% and the Russell 2000 Index fell 5.4%, according to October Three. The MSCI EAFE index and the MSCI EM index gained 3.0% and 1.0%, respectively, resulting in a diversified portfolio return of negative 1.2%.

Interest rates used to discount pension liabilities fell more than 0.25% in February, resulting in stronger bond returns so far this year.

“Corporate bond yields declined 0.25% in February after a flat January,” October Three noted. “As a result, pension liabilities have grown 3%-4% through the first two months of 2025, with long duration plans seeing the largest increases.” 

In February, though, discount rates used to value pension liabilities fell 0.2%, resulting in a modest dent in pension finances during the month, according to October Three, which expects plan sponsors to use discount rates in the 5.1% to 5.4% range to measure pension liabilities. 

“While U.S. equities saw a pullback, as reflected by a nearly [two] percentage point monthly decline in the FT Wilshire5000 Index, most other asset classes experienced positive returns, leading to an increase in total asset value month-over-month,” McGuire said in a statement. 

According to WTW, a 60/40 portfolio returned 0% in February, while portfolios with 20% fixed income returned negative 0.7%, and portfolios with a 60% long-duration fixed-income allocation returned 0.6%. Portfolios with 80% long-duration fixed income returned 3%. 

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