Deals and People December 30, 2022

Retirement Industry People Moves

OneAmerica names new CIO; Colony Group expands Boston footprint; Commonwealth Financial takes on Indiana advisory; and more.

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OneAmerica Names David Weisenburger CIO

Insurance and financial services provider OneAmerica announced that David Weisenburger will succeed CIO John Mason upon his retirement at the end of May 2023.

Weisenburger, a vice president at OneAmerica Financial Partners, will be the fifth CIO for the companies of OneAmerica since World War II, according to the firm. His 15-year career at OneAmerica has included oversight of the bond portfolio; responsibility for investment strategy and risk management; and managing administrative office functions. 

Weisenburger has served as vice president of investment strategy and risk; fixed income securities; and marketable bonds at OneAmerica. He was previously affiliated with Ohio Casualty Group and Summit Investment Partners. 

Mason has been at Indianapolis-based OneAmerica for 36 years, the last 11 as CIO. He will continue to serve as CIO until his retirement in May, with Weisenburg serving as his deputy through the transition period.

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The Colony Group Expands Boston Footprint with Cooper Lapman Acquisition

Wealth and business management firm The Colony Group has signed an agreement to acquire registered investment adviser Cooper Lapman Financial by the end of the first quarter of 2023, the companies said in a press release.

The Colony Group is based in Boston and has $19 billion in assets under management. The firm said Cooper Lapman will further expand Colony’s team in the Boston area, with wealth management and investment services focused on high-net-worth individuals and families.

Miriam “Mimmy” Cooper and Mark Lapman will join Colony as senior wealth advisers, along with colleagues Lauren Ledger and Trey Tremblay.

Colony will offer Cooper Lapman’s clients enhanced support and access to a broader range of wealth management services, while also allowing the Cooper Lapman team to leverage Colony’s operational infrastructure and its comprehensive service offering and investment capabilities, the companyies said in the release.

Strategic Planning Group Moves to Commonwealth Financial for Tech, Client Capabilties

Strategic Planning Group of Fishers, Indiana, has joined Commonwealth Financial Network’s advisory firm as it seeks to harness its technology and client capabilities, the two firms said in a press release.

Strategic Planning Group provides financial planning and investment management services to business owners, individuals and families, with a focus on physicians, executives and other professionals who range from being in the early stages of their careers to nearing retirement, the firms said in a press release.

Strategic Planning Group’s  John Wood (president and adviser) and Chris McCauley (adviser), along with Kerry Zerla (director of taxation services) and Julie Ogle (operations manager), will bring with them more than $220 million in client assets.

Technology was a key consideration for Strategic Planning Group in joining with a larger firm, McCauley said in the press release. He said the firm’s advisers will benefit through planning, reporting tools and other functionalities that will “translate to more time to spend on nurturing relationships, as well as tangible capabilities they can showcase to connect with prospects.”

Commonwealth Financial Network is based in Waltham, Massachusetts, and oversees more than $273 billion in assets.

Annuity Provider American Equity Rejects Buyout Bid from Prosperity and Elliott

American Equity Investment Life Holding Company has rejected an unsolicited, non-binding buyout offer from Prosperity Group Holdings and its principal shareholder, private equity firm Elliott Investment Management.

The firms made the initial proposal on December 8 to acquire American Equity, which sells retirement income annuities, for $45 per share in cash. The Des Moines, Iowa-based company’s board rejected the bid on December 12. Prosperity made a second offer with the same price and economic terms on December 19, and American Equity’s board rejected it again the next day, according to a press release.

“Consistent with its fiduciary obligations and in consultation with independent financial and legal advisors, the Board has carefully evaluated Prosperity and Elliott’s opportunistic proposal and unanimously determined that it significantly undervalues the Company,” David Mulcahy, chair of American Equity, said in the release.

American Equity works with independent agents, banks and broker/dealers through wholly owned operating subsidiaries to provide annuity products for guaranteed income in retirement. The firm has recently reframed its investment focus to emphasize insurance liability-driven-asset allocation and alternate, private-asset management, according to the press release.

American’s Equity stock price on the Nasdaq closed at $46.08 at market close on Thursday, after increasing from $39.13 on December 16.

Compliance December 30, 2022

Fiduciary 401(k) Breach Claims Against Milliman Will Proceed

A federal judge ruled against a Milliman Inc. motion to dismiss fiduciary breach allegations that it failed to prudently choose and monitor 401(k) plan investments.

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A federal judge in Washington state on December 13 denied a motion from Milliman Inc. to dismiss breach of fiduciary duty claims brought by a 401(k) retirement plan participant under the Employee Retirement Income Security Act.

The court order allows the plaintiff’s breach of fiduciary duty claims to proceed, including allegations of mismanagement of investments in its employer-provided 401(k) plan. Seattle-based actuarial and consulting firm Milliman is now faced with ERISA counts for breaches of duties of loyalty and of prudence and failure to monitor its workplace 401(k).

In June, U.S. District Court Judge for the Western District of Washington Thomas Zilly had dismissed portions of the complaint, but the plaintiff was allowed to submit an amended version, and this one allows all three complaints to proceed.

Although Milliman argued the plaintiff’s amended complaint failed to state a claim, Zilly ruled that the legal standard to state a claim for breach of fiduciary duty was met by the plaintiff’s amended complaint. These included that the plaintiff must allege facts plausibly showing that defendants were fiduciaries, that defendants breached their fiduciary duties and that their breach caused loss to the ERISA-covered plan.

“Having viewed plaintiff’s allegations in their totality, the court is persuaded that plaintiff has pleaded a ‘plausible’ claim for breach of fiduciary duty,” Zilly stated.

Milliman argued, unsuccessfully, that “in her second effort, plaintiff has again failed to establish that various funds or indices are appropriate comparators. … In their present attack, defendants do not identify necessary details that plaintiff has omitted or neglected to include, but rather (i) dispute plaintiff’s characterization of the investment options at issue, and (ii) disagree with inferences plaintiff has drawn from the statistics that she has proffered,” the court order stated.

Zilly also dismissed the defendant’s argument to throw out the failure to monitor claim.

“Defendants contend that, because a failure to monitor claim is derivative of a breach of fiduciary duty claim, which defendants argue has not been adequately pleaded, plaintiff’s failure to monitor claim also fails,” he stated. “In light, however, of the court’s ruling concerning plaintiff’s breach of fiduciary duty claim, defendants’ motion to dismiss plaintiff’s failure to monitor claim likewise lacks merit.”

The initial complaint proposed a class action lawsuit. The plaintiff alleged Milliman failed to prudently monitor the plan’s investments.

The complaint alleged Milliman mismanaged the retirement plan’s investments, causing harm to workers contributing to their 401(k). The complaint accused plan fiduciaries of failure to remove three of the plan’s “poorly performing investment options,” the plaintiff stated.

According to the original complaint, when the investment committee decided to add a suite of target-risk funds to the plan’s investment menu in 2013, the funds had only been launched two months prior, had no track record and were untested.

The plan had approximately $1.7 billion in assets under management, according to the original complaint.

A Milliman spokesperson declined to comment.

 

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