Deals and People August 30, 2024

Retirement Industry People Moves

Corebridge elects Bousa to board of directors, appoints Moore as retirement services EVP; Lincoln Financial appoints West as head of RPS institutional sales; Maryland State Retirement Agency names Kim deputy CIO.

Reported by

Corebridge Elects Bousa to Board of Directors, Appoints Moore as Retirement Services EVP

Edward Bousa

Corebridge Financial Inc. announced that its board of directors has elected Edward Bousa as an independent director, effective immediately. Bousa is a veteran portfolio manager with more than four decades of experience in the mutual fund industry.

When he retired from Wellington Management Co. LLC in 2020 after a 20-year career, Bousa was a member of the executive committee, a partner and the leader of quality value equity investment strategies.

Get more!  Sign up for PLANSPONSOR newsletters.

“Edward Bousa’s decades of impressive investment success, skilled leadership and deep expertise advising companies on growth, innovation and optimal performance will be an asset to Corebridge,” Peter Zaffino, chairman of the board of directors of Corebridge Financial, said in a statement.

Aaron Moore

Corebridge Financial also announced that Aaron Moore has joined the company as retirement services executive vice president for strategic relationships. He will oversee the plan sponsor and consultant engagement strategy for the Corebridge retirement services business.

Moore has more than 26 years of experience in the financial services industry. He joins Corebridge from Lincoln Financial Group, most recently serving as senior vice president for institutional sales and client engagement. He began his career as a financial adviser. 

“We’re excited to welcome Aaron to Corebridge Financial,” Terri Fiedler, president of retirement services at Corebridge, said in a statement. “His vast industry experience and knowledge will help us build even deeper relationships with plan sponsors and consultants in our target markets, to help educators, healthcare workers, government officials and non-profit professionals take action in their financial lives.”

Lincoln Financial Appoints West as Vice President, Head of RPS Institutional Sales

Jayson West

Lincoln Financial appointed Jayson West to lead the retirement plan services sales organization as vice president and head of RPS institutional sales, effective August 19.

“Jayson is a proven sales leader and has been a valued Lincoln Financial employee for more than 27 years,” a spokesperson for Lincoln Financial said in a statement. “This appointment further positions Lincoln’s RPS business for success and will allow us to continue to hit our targets, driving our business forward in several areas like innovation, service delivery and client satisfaction.”

Maryland State Retirement Agency Names Kim Deputy CIO

Thomas Kim

Maryland State Retirement and Pension System Executive Director Martin Noven announced this week that Thomas Kim has been selected to serve the Maryland State Retirement Agency as joint deputy CIO for the Maryland State Retirement and Pension System.

Kim will report to the agency’s CIO, Andrew Palmer, and work alongside Deputy CIO Robert Burd, providing strategic direction and counsel across the entire investment portfolio. Kim’s first day was August 28.

“We are looking forward to working closely with Tom,” Palmer said in a statement. “With nearly three decades of combined investment experience in public and private sectors, I am confident that his expertise will continue to strengthen and secure the financial future of Marylanders.”

Prior to joining Maryland’s SRPS, Kim served as deputy CIO for the Tennessee Consolidated Retirement System, where he helped oversee the management of $106 billion across various asset classes for the State of Tennessee Treasury.

Data and Research August 30, 2024

Fidelity Finds Retirement Account Growth in Q2, Better Outcomes for Nonprofit Workers

Retirement savings for Gen X workers showed improvements in the year’s second quarter, and nonprofit workers continue to show improvements in retirement readiness.

Reported by

In its second quarter retirement analysis, Fidelity Investments found that retirement savers experienced a third consecutive quarter of growth across individual retirement, 401(k) and 403(b) account balances. Fidelity attributed the rising retirement account balances to positive market conditions, as well as strong contribution levels.

Based on data through June 30, the end of the second quarter, the average IRA balance in Q2 was $129,000, the average 401(k) balance was $127,100 and the average 403(b) balance was $114,700.

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

In particular, Fidelity noted that Generation X participants made strong gains in their retirement savings, with current IRA contributions at the highest observed in the last five years.

Mike Shamrell, vice president of thought leadership at Fidelity, says 14% of Gen Xers took advantage of catch-up contributions in Q2, which may explain the improved account balances for this cohort.

By comparison, Shamrell says the youngest Baby Boomers turned 60 this year, and it is likely that a large percentage of this population is already in retirement. He says their balances will likely begin to taper, as many are not contributing anymore and are starting to draw down.

Data from Fidelity’s analysis is based on savings behaviors and account balances for more than 48 million IRA, 401(k) and 403(b) retirement accounts.

Fidelity also found significant strides made in retirement plans offered by nonprofit organizations, revealing improved participation and savings rates in its biannual study, “Better Outcomes for Nonprofit Organizations.”

After studying 2,500 nonprofit retirement plans, Fidelity revealed that the average plan participation rate in 2023 was 83%, and the total average savings rate was 11.2%—consisting of 7.4% in employee contributions and 3.8% in employer contributions.  

“As organizations within the nonprofit sector continue to add features to their plan to make it easier for their employees to save, I think we’re going to continue to see positive results as we as we go forward,” Shamrell says.

Shamrell adds that more nonprofits are using features like automatic enrollment and automatic escalation, which have helped participants contribute more. According to the survey, 43% of plans offered auto-enrollment in 2023, and 33% enhanced their enrollment communications.

In addition, 23% of nonprofit plans had auto-escalation in 2023, and 84% had Roth deferrals. Fidelity found that 87% of active participants with a balance are contributing to their account. Another positive finding was that 43% of participants in nonprofits’ plans are deferring at least 6% of their compensation to retirement savings.

Shamrell says Fidelity recommends at least a 15% savings rate, when the employee and employer contributions are combined, and notes that many nonprofit workers are inching toward that rate.

Meanwhile, Fidelity’s survey found that 11.5% of nonprofit participants have at least one loan outstanding, while Gen X workers have the highest loan utilization of any cohort at 17.2%.

“The loan data really helps underscore the need to help workers set up an emergency fund,” Shamrell notes.

Fidelity found that the number of nonprofit workers taking hardship withdrawals has grown annually since the COVID-19 pandemic, with 1.9% of nonprofit workers taking a distribution in 2023, up from 1.6% in 2022 and 1.3% in 2021. The top three reasons for nonprofit workers taking a distribution were foreclosures/eviction, medical reasons and for education.

Shamrell says in some instances, taking a hardship withdrawal might be a better option than a plan loan.

“What we try to tell people when they take out a loan is: Bear in mind, you’re going to have to start paying that loan back … and your loan payments are going to be automatically deducted from your paycheck, so your take-home pay is going to go down,” he says. “If you are really on a tight budget, it’s important to bear that in mind.”

Nonprofit employees also reported having higher levels of credit card debt, lower rates of emergency savings and lower confidence in their financial situations in 2023 than in previous years.

Fidelity recommended that employers share information with workers on how to build emergency savings, promote educational videos and webinars to help build financial literacy and promote strategies to help participants with student debt.

Fidelity analyzed data for nonprofit managed plans as of December 31, 2023 in its report.

«