Deals and People June 25, 2021

Retirement Industry People Moves

Verus hires investment professionals for Pennsylvania team; FuturePlan by Ascensus announces new DVP; and American Trust acquires Denver-based LT Trust Co.

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Art by Subin Yang
Art by Subin Yang
Art by Subin Yang

Verus Hires Investment Professionals for Pennsylvania Team

Verus has added two investment professionals to the team working out of its Pittsburgh office.

Chris Shelby will be added as director of private markets and Evan Benedict was selected as consulting associate. Shelby and Benedict join investment consulting industry veterans Mark Brubaker, managing director, senior consultant and a member of Verus’ Management Committee, and Ted Herman, managing director, senior consultant.

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As a director on the Verus Private Markets investment team that has a presence in all offices, Shelby will provide investment advice to clients to help implement and maintain private markets portfolios. He will focus on the sourcing of investment opportunities, performing due diligence, monitoring investments and generating investment content. His coverage will span the private markets with a focus on private credit and private equity with additional responsibilities across venture capital, growth equity and real assets.

Prior to joining Verus, Shelby was a senior vice president at Wilshire Associates, where he was a member of the Private Markets Group. Shelby graduated from the University of Pittsburgh with summa cum laude honors, earning a bachelor’s degree in business administration, majoring in finance with a minor in economics. He is a Chartered Financial Analyst (CFA) charterholder and a member of the CFA Society of Pittsburgh.

Benedict’s primary responsibilities will include assisting clients and collaborating with consultants to prepare deliverables and in-depth portfolio analysis. Benedict has serviced a wide variety of clients, most notably corporate defined benefit (DB) and defined contribution (DC) plans. Prior to joining Verus, Benedict was an associate at Wilshire Associates. Benedict graduated from the University of Pittsburgh with a bachelor’s degree in business administration with a major in finance.

FuturePlan by Ascensus Announces New DVP

FuturePlan by Ascensus has announced that Aaron McIsaac will assume divisional vice president (DVP) responsibilities for the organization’s Southern California region as a result of DVP Greg Taylor’s planned retirement. The change is effective on June 30.

McIsaac will offer consultative support to retirement plan clients while expanding relationships with strategic recordkeeping and financial adviser partners in both the Northwest/Central and Southern California regions. He will continue to report to Kasey Price, FuturePlan’s head of sales, while leveraging his two decades of business development and leadership experience to create and implement growth strategies for FuturePlan’s fast-growing sales team.

McIsaac has been a FuturePlan DVP since January 2020. Prior to that, he was a regional sales director at Goldleaf Partners, a Minnesota-based third-party administrator (TPA) that became part of FuturePlan in 2019. While at Goldleaf Partners, he helped develop the organization into a prominent 3(16) fiduciary services provider. He has also held leadership positions at Benefit Administration Corp. and Partridge River Inc. McIsaac earned his bachelor’s degree in management from The College of St. Scholastica.

Taylor joined FuturePlan’s sales leadership team as a DVP in August 2019. Before that, he was the founder and president of QBI, a California-based TPA recognized for its broad expertise in human capital management and integrated benefits that became part of FuturePlan in 2018. He has been an active member in industry organizations—including the American Society of Pension Professionals & Actuaries (ASPPA) and the National Institute of Pension Administrators (NIPA)—throughout his career. Taylor received a bachelor’s degree in economics from the University of California, Los Angeles (UCLA).

“Greg has been well known and respected in the TPA industry for more than 40 years, and regularly inspires clients and associates with his remarkable work ethic, business acumen and talent for making meaningful connections on a personal level,” Price says. “FuturePlan is extraordinarily grateful for his years of service and wishes him all the best in retirement.

“Aaron’s ability to lead and mentor during both positive and challenging times will ensure that our clients in the Southern California region remain in good hands,” Price continues. “He will provide them with the same exceptional level of support needed to help them meet their objectives.”

American Trust Acquires Denver-Based LT Trust Co.

American Trust Co., a full-service provider of retirement solutions to small- and midsized plan sponsors, has signed a definitive agreement to acquire Denver-based LT Trust Co., a national retirement plan provider and recordkeeper.

LT Trust is a full-service retirement plan provider, offering recordkeeping, trust and custodial services to financial intermediaries and their clients. Chairman and CEO Bob Beriault will continue as a consultant to American Trust, as well as a shareholder, and the firm’s approximately 100 employees will all join American Trust at the close of the transaction.

“LT Trust shares our deep commitment to adviser success, evident through the development of its advanced technology platforms and effective experience-driven solutions,” says Micah DiSalvo, chief revenue officer at American Trust. “In addition, LT Trust has extensive experience in the institutional outsourcing space, allowing greater flexibility for participants and plan sponsors, while uniting various players across the industry with the shared goal of improving outcomes for participants. We are eager to leverage that expertise to further amplify the industry impact.”

“It is more important than ever to be innovative and technology-focused to succeed in today’s retirement landscape,” adds Beriault. “American Trust is recognized for the commitment it’s made to the retirement space, consistently innovating and growing to better serve its clients throughout the retirement ecosystem. We are excited to join the team and provide additional technology, services and resources to our collective clients.”

This is American Trust’s third strategic acquisition in the past 12 months. Following the closing of the transaction, American Trust and its affiliates will support more than $125 billion of total retirement assets under advisement, management or custody.

Administration June 25, 2021

PSNC 2021: Managing Crisis: Investing Lessons From an Aging Workforce

There are plan design features, communications and investment options that can help participants near retirement stay on track for retirement security.

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The “Late Baby Boomer” generation—which includes those born between 1960 and 1965—was hit hard by the great financial crisis (GFC) and the COVID-19 recession. However, some of that vulnerability could be self-inflicted, Capital Group contends. At the cusp of retirement, a good number of these investors might have over-allocated to equities in a last-ditch attempt to fill the gap in their retirement savings—the exact opposite of what they should have done.

During a session presented by Capital Group, home of American Funds, at the 2021 virtual PLANSPONSOR National Conference (PSNC), Naomi Fink, retirement economist within Capital’s Institutional Analytics Group, noted that Late Boomers had saved less than previous generations at time of the GFC; they had an average defined contribution (DC) account balance of $29,963. “Why they saved less is a great mystery because of concerns about Social Security and the disappearance of DB [defined benefit] plans,” she said.

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However, Fink said, the Center for Retirement Research at Boston College (CRR) found the lower savings came about because during the GFC, Late Boomers experienced job losses or had lower earnings.

“Job losses and lower earnings can affect retirement savings. One way the effect can be shifted is through a boost in earnings or by working longer,” she said. Fink calls job and earning status a person’s “human capital” and says instead of just trying to save as much as possible, Late Boomers can focus on boosting their human capital.

But another problem affecting the retirement savings of this generational group is incorrect investment decisions. “Anecdotally, they weren’t contributing during a job loss. Then they went back to work with lower wages, so to make up for lost time, they invested in equities,” Fink said. She said individuals at this age should be shifting from equities to bonds, and that is true even when a job loss has occurred.

“When there is a job separation, it often leads to lower earnings, and this downward motion of human capital doesn’t change,” Fink said. “They need to use effective strategies to make up for that.”

Enhancing Plan Design and Investments

To help improve plan design and investments not only for participants near retirement but for everyone in the plan, Chris Anast, senior retirement strategist with the Institutional Analytics Group at Capital Group, said automatic plan features, such as auto-enrollment and auto-escalation, are a great step. “Thinking of participants who are in similar situations now and those that might be going forward, it’s important to get people in the plan,” he said.

If plan sponsors use auto-enrollment, they should set it at a healthy default deferral rate, Fink said.

It’s also important to prevent money from coming out of the plan, Anast added.

Christina Elliott, executive director of the Ohio Public Employees Deferred Compensation Plan (Ohio DC), said the plan doesn’t include a loan program. However, in light of the pandemic, Ohio DC considered the Coronavirus Aid, Relief and Economic Security (CARES) Act and what it could adopt to help people through the COVID-19 crisis.

“We saw more unexpected emergency withdrawals than we’ve seen in the plan’s history,” she said. “There were not job losses with our employees, but with their families, and also some employees and their families had health issues due to COVID.”

To avoid having participants take money out of the plan, Fink suggested plan sponsors communicate about the potential consequences of loans and withdrawals and educate about the unexpected. She also suggested that plan sponsors implement a holistic financial wellness program.

“One thing that keeps recurring is those without emergency savings are more likely to take a withdrawal, so encouraging emergency savings, either through an employer or not, will help,” Fink said. “Similarly, education and aid with managing student loan and other types of debt will help participants avoid withdrawals [from retirement plans].”

In addition to the temptation to move assets from fixed income to equity investments, pre-retirees may face other investment temptations, Anast noted, citing as an example the GameStop incident in 2020, when the company’s stock price went through the roof after amateur traders in a Reddit forum invested in the stock to drive up the price. “Plan sponsors should educate participants about how to keep from falling for [these short-term spikes],” he said.

Elliott said Ohio DC thought it was important to communicate about the GameStop incident. “People don’t make the best decisions when in crisis,” she said. “We partnered with a company for AI [artificial intelligence], smart, ethical and specific customized messages about financial wellness. Outside investing and outside investing tools are not bad things, but if participants don’t understand the basics of finance, they can get into trouble.”

Financial wellness programs and communications help participants focus on what’s important, Elliott added.

She also said Ohio DC received some questions from participants about annuitizing part of their balances—an option the pandemic has brought to light as something to explore. But, for public employees in Ohio, she said, having pension plans and helping participants understand the benefits of those plans helps with managing investment risk.

Fink said asset allocation funds, such as target-date funds (TDFs), also help participants with investment decisions. “And sometimes they help people ‘do nothing,’ which is sometimes the best thing,” she said.

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