Deals and People September 23, 2022

Retirement Industry People Moves

Buck appoints U.S. regional market leaders; Pacific Life announces new head of defined contribution lifetime income; Dorsey & Whitney names new partner; and more.

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Pacific Life Announces New Head of Defined Contribution Lifetime Income 

Pacific Life has named Michael Oler as head of defined contribution lifetime income for Pacific Life’s Institutional business. He will report to senior vice president and head of institutional customer solutions group Paul Hance. 

Oler’s entire career has been in the financial services industry. After earning his bachelor’s in economics from Rutgers University, he began his career at PricewaterhouseCoopers, where he was responsible for the administration and recordkeeping of 401(k) plan clients. 

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Oler then served as a director at MetLife, where he led project management for new product implementations and strategic partnerships for their institutional income annuities business. Later, he joined BlackRock as a director, and was responsible for the product development and implementation of BlackRock’s retirement income strategies in both the defined contribution and retail adviser channels. Most recently, Oler served as retirement income product manager at T. Rowe Price, where he partnered with investments, distribution and marketing to develop and launch retirement income solutions. 

Buck Appoints U.S. Regional Market Leaders 

Buck, an integrated human resources, pensions and employee benefits consulting, technology and administration services firm, has announced the appointment of market leaders in three U.S. growth markets. 

Brandon Bentz has been appointed as Philadelphia/Washington, D.C. market leader. Bentz has more than 20 years of experience in business development and sales operations and will continue to serve as adviser relations leader. 

Jessica Strzepek will serve as New York/New England market leader. Strzepek joins Buck from Korn Ferry, where she served as client director, managing leadership development initiatives for Fortune 500 companies and leading a team of business development managers.  

Tonia Vetter will serve as Southeast market leader. She joins Buck from Mercer, where she was responsible for client delivery excellence and satisfaction. With more than 20 years of experience as a health and benefits consultant, Vetter has helped clients implement innovative health care strategies to optimize their spending and improve outcomes for plan members. 

Northern Trust Creates New Digital Assets and Financial Markets Group Leadership Role 

Northern Trust has announced the appointment of Michael Buzza as global head of network management and market strategy. Buzza, previously Europe, the Middle East and Africa head of market advocacy and innovation research, will oversee the teams dedicated to providing market access and insights across the traditional securities services markets within the digital assets and financial markets group. 

Over the course of 16 years at Northern Trust, Buzza has led strategic agent bank provider selection and was instrumental in a strategic investment in Zodia Custody, an institutional-grade crypto-asset custody solution created in conjunction with Standard Chartered.

PGIM Quantitative Solutions Makes Senior Appointment, Promotion 

PGIM Quantitative Solutions, the quantitative and multi-asset solutions specialist of PGIM, has announced the appointment of Cyrus Cottin as head of international distribution, and the promotion of Pam Clancy to head of global consultant relations, effective immediately.  

Based in London, Cottin reports to Brian Carroll, PGIM Quant’s head of global distribution. In his role, Cottin is responsible for developing and leading PGIM Quant’s distribution strategy across Europe and the Asia-Pacific region, as well as driving the expansion across both existing and new relevant markets. Cottin will support distribution efforts across the firm’s three key investment platforms: Quantitative Equity, Multi Asset and PGIM Wadhwani. 

Cottin joins from Eastspring Investments, where he was director of distribution, Europe and the Middle East. Prior to this, he was head of distribution, Switzerland, France and Germany, for BrightSphere Investment Group, and held business development roles at Amundi ESG and Amundi Alternative Investments. 

Reporting to Carroll, Clancy oversees a team of five, based across San Francisco, the Midwest, Newark and London. She is responsible for coordinating all global consultant activities and deepening relationships in the consultant community. Based in Newark, New Jersey, Clancy was previously head of US Consultant Relations. 

PGIM Quant also recently appointed London-based Apostolos Katsaris as senior client portfolio manager for the PGIM Wadhwani liquid-alts platform. 

Dorsey & Whitney Names New Partner 

International law firm Dorsey & Whitney LLP has announced that David Tang has joined the firm as a partner in the investment management practice in New York. 

Tang provides regulatory compliance advice to investment advisers, including private fund managers. He assists managers with the design and implementation of best practice compliance policies and procedures covering topics such as personal trading, marketing, insider trading, expert networks, alternative data, best execution, soft dollars, investment allocation, expense allocation, valuation, cross trades, short sales, conflicts of interest, privacy, business continuity, cybersecurity and recordkeeping.  

Tang has successfully represented numerous investment managers through the SEC examination process. He also helps investment advisers prepare for SEC examinations by conducting privileged and confidential mock audits. Tang prepares and advises managers on compliance with new rules, such as the SEC’s new marketing rule. He regularly advises investment managers on SEC registration and available exemptions. In addition to regulatory compliance, Tang has deep experience in the formation and representation of private funds. 

Tang joins Dorsey from the Investment Management Group of Seward & Kissel LLP, where he founded and led the firm’s regulatory compliance consulting business, providing legal counsel and outsourced support to investment managers. David received his J.D. from UCLA School of Law and his B.A. in economics and history from Binghamton University.

Compliance September 22, 2022

Plaintiffs Move for Settlement Approval in 16-Year ERISA Case

The class action suit sought compensation for pension plan lump-sum payments whose value had been undercalculated.

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The parties in a protracted Employee Retirement Income Security Act lawsuit against PricewaterhouseCoopers LLP have reached a preliminary settlement of $267 million.

The settlement, in the case known as Laurent v. PricewaterhouseCoopers LLP, would distribute the money to approximately 16,000 affected parties; in exchange, the plaintiffs would move to dismiss the case, according to a motion filed in the case in U.S. District Court for the Southern District of New York. The settlement amount does not include an application for attorneys’ fees or require some of the restructuring steps that the plaintiffs initially requested.

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The lead plaintiff, Timothy Laurent, initially brought the case in March 2006. He alleged that employees of PwC who requested their pension as a lump sum upon leaving the company were being underpaid.

Typically under ERISA, such a lump-sum payment’s value is projected into the future using a “fair estimate” of the rate of return until a “normal retirement age.” 

In other words, the lump-sum payment should be the total value of the pension if the money were left in the account and allowed to grow normally, minus a discount rate up to a statutory maximum. The “whipsaw” calculation method used here is so named due to the back-and-forth method of calculation, requiring a future projection and then a present-value discount.

However, PwC used a 30-year Treasury return as the interest rate, and calculated the normal retirement age as either 65 years old or 5 years of service, whichever came sooner. Both of these methods were found to be in violation of ERISA in previous hearings, as the 30-year Treasury return is an unreasonably low rate, and 5 years of service is not a normal retirement age for virtually any employee in any industry, and meant that the retirement age of 65 only applied to those hired at age 60 or older.

In other words, PwC used an artificially low rate and projected it too few years into the future in calculating the lump sum, and therefore underpaid pension plan participants. Laurent also alleged that PwC intentionally concealed this fact from pensioners.

Laurent requested that the plan be restructured so as to be ERISA-compliant, and that underpaid pensioners be compensated. PwC argued that this remedy was not authorized under ERISA, which a district court initially upheld. This was overturned on appeal in 2019. 

The Department of Labor submitted an amicus curiae brief on behalf of the plaintiffs as part of that appeal, arguing that both remedies were admissible under ERISA.

Though the settlement agrees to a payout for those affected, it does not mention the other legal requests made. The settlement does not require the plan to be restructured, for example.

The settlement notice also requests an additional hearing to have the settlement formally approved by the court, and for the court to set deadlines for the filing of class member objections and an application for attorneys’ fees.

 

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