Retirement Industry People Moves

AXA appoints divisional VP for tax-exempt retirement plan market; Integrated Retirement partners with Advaney Associates on participant communications; Connecticut Treasurer appoints new deputy CIO for Connecticut Retirement Plans and Trust Funds; and more.

Risk Strategies Acquires TSG Financial

Risk Strategies, a privately-held national insurance brokerage and risk management firm, has announced the acquisition of TSG Financial. The move marks the firm’s first venture into offering wealth management and retirement plan services as part of its employee benefits practice.

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TSG Financial is a full-service asset management and employee benefits firm. It develops traditional group benefits programs for everything from health and dental to long-and short-term disability insurance. The firm is led by its four partners: Michael Waters, Paul Essner, Ben Chafitz, and Bryan Pendrick.

“We believe that deep, real-world expertise makes even the most complex client challenges easy to solve,” says John Greenbaum, employee benefits national practice leader for Risk Strategies. “TSG Financial fits this model. Its employee benefits business is highly complementary to ours and brings to the table financial services capabilities, such as 401(k) plans, that are a logical extension of our business strategy.”

In the home health care industry, TSG Financial provides organizations with traditional group insurance programs and 401(k) plans for administrative employees, home health aides and nursing staff.

“It’s exciting to join forces with a national-scale firm noted for its technical ability and expert knowledge,” says Michael P. Waters, lead partner at TSG Financial. “Our client base will certainly benefit from access to new, meaningful resources, while our capabilities in wealth management will position Risk Strategies to expand its offerings.”

NEXT:  Sentinel Names New CEO

Sentinel Names New CEO

Sentinel Benefits & Financial Group, a provider of retirement planning and employee benefit solutions, has appointed Samuel Mitchell as its chief executive officer. Mitchell began his career at Sentinel more than 16 years ago, holding various roles within the organization. Most recently, he served as president of Sentinel Benefits Group, the organization’s largest business unit.

In his new role as CEO, Mitchell will be tasked with leading Sentinel’s four separate business units, with a strong focus on its short and long-term growth initiatives.

“We are thankful for Sam’s steady hand and disciplined approach,” says Jim Carnevale, president of Sentinel Pension Advisors. “We look forward to his leadership as we continue to meet our clients’ needs through our extensive resources and capabilities. My brother John Carnevale, our former CEO, provided us with a vision for the future of retirement planning and employee benefits and how legislation and technology will impact our business. We believe Sam shares many of these same visions and this further validates him as the right choice.”

Sentinel Benefits & Financial Group is a benefits and financial adviser to more than 3,000 businesses and individuals throughout the United States. The firm offers aviary of services including comprehensive retirement plans, group health insurance, reimbursement accounts, and financial planning.

NEXT: AXA Promotes New Divisional VP

AXA Promotes New Divisional VP
 
AXA, a financial protection company, has appointed Fred Makonnen to the role of divisional vice president. He will be tasked with broadening AXA’s national focus in the tax-exempt retirement plan market, while leading a national sales team responsible for expanding business development and sales opportunities.

Makonnen joined AXA’s Retirement Plan Services team in 2013 as regional vice president and led market growth in the central region comprising Texas, Arkansas, Louisiana, Mississippi, Ohio, Kentucky and Indiana.

“We’re looking forward to Fred expanding on his central region success across our nationwide footprint,” says Matt Drummond, head of tax-exempt sales and business development. “His success so far has translated to more Americans feeling that they’ve prepared adequately so that they might enjoy a dignified retirement.”

Prior to joining AXA, Makonnen spent 12 years in various senior sales management positions within ING/Voya, including vice president of institutional sales, where he was responsible for large group acquisitions in the health, education, and government space. Also while at ING/Voya, Makonnen headed African American Multicultural Sales & Marketing, where he was responsible for developing education and communication materials for various underserved markets.

Makonnen holds a bachelor’s degree in business administration from the University of Connecticut. He also holds the Series 7, 66 and 24 securities industry registrations administered by the Financial Industry Regulatory Authority (FINRA).

NEXT: Crowell & Moring Hire Employee Benefits Attorney

Crowell & Moring Hire Employee Benefits Attorney
 
Crowell & Moring LLP announced David McFarlane will join the firm as a partner in the firm’s Corporate, Health, Care, Tax, and Labor & Employment groups based in its Los Angeles office.

With more than 20 years of experience, McFarlane has advised on pensions, employee benefits, executive compensation, national and international corporate transactions, and structured finance geared towards the Employee Retirement Income Security Act (ERISA) and the Affordable Care Act (ACA). He is a founder of Health Care Attorneys, P.C., a law firm dedicated to health care reform under the ACA, and has previously worked with Willis Towers Watson, Osler, Hoskin & Harcourt and Skadden Arps Slate Meagher & Flom.

Additionally, McFarlane has authored two books on employee benefits law.

“David’s extensive corporate experience in health care reform law, ERISA, ACA and employee benefits will be invaluable to the firm’s clients and prospective clients,” says James R. Stuart, co-chair of Crowell & Moring’s Corporate Group.

NEXT: Integrated Retirement Partners with Advaney Associates, LLC

Integrated Retirement Partners with Advaney Associates, LLC

Integrated Retirement, a provider of retirement plan content and training, has expanded its team by uniting with Advaney Associates, a firm specializing in investment and retirement communications. Owner Patricia Advaney holds more than 25 years of industry experience, with 15 of those years held at Transamerica Retirement Solutions.

At Transamerica, Advaney served several senior roles in Investments, Marketing and Participant Experience, lead participant-focused strategies and oversaw digital participant initiatives and tools made for sponsors to monitor their plans’ success.

The partnership will focus on presentation development and communications toward retirement plan participants.

“Given our traditional focus on adviser, sponsor, and internal call center and compliance staff audiences, the relationship with Advaney Associates is a great complement to our existing scope of services,” says Pam O’Rourke, senior vice president and managing principal of training and content services at integrated retirement. “So to all those clients who have in the past asked us for participant communications, we’re now able to say ‘Yes, we can!’ Pat understands the participant mindset and knows how to create content that is both meaningful and engaging.”

 NEXT: PSCA Announces New Directors

PSCA Announces New Directors
 
Two new leaders will join The Plan Sponsor Council of America (PSCA) Board of Directors, the organization announced. Following an approval by the PSCA’s general membership, Ted Moss and Tim Kohn have been appointed to fill two vacancies on the board.

Moss is president of Roscoe Moss Company, a Los Angeles water industry manufacturer. He is also a former board member who is returning for a new three-year term. He represents the viewpoints of business owners and the critical role they play in providing employee retirement plans.

Kohn is vice president of Dimensional Fund Advisors of Austin, an investment management firm. He leads the firm’s U.S. defined contribution (DC) practice. He is committed to the work-based approach to voluntary retirement savings, and has been an unwavering supporter of PSCA and its member organizations for many years, the PSCA says.

“We are pleased to add these outstanding business leaders to our board,” says Steve McCaffrey, PSCA’s board chairman. “We are so fortunate that they are willing to help us advance our strategic initiatives, and serve the interests of the nation’s retirement plan sponsors and participants.”

The PSCA is a community of employee-benefit plan sponsors, working together on behalf of more than six million employees to expand on the success of the employer-sponsored retirement system. The organization also serves as a resource to policymakers, the media and other stakeholders in the retirement industry.

NEXT: Morningstar to Acquire PitchBook Data

Morningstar to Acquire PitchBook Data

Morningstar has announced that it will acquire PitchBook, a firm providing data, research and technology covering private capital markets including venture capital, private equity, and mergers and acquisitions.

The company's PitchBook Platform and best-in-class user interface allow clients to access data, discover new connections, and conduct research on potential investment opportunities. PitchBook covers the full lifecycle of venture capital, private equity, and M&A; including the limited partners, investment funds, and service providers involved. With the acquisition of PitchBook, Morningstar will be able to apply its core data and software capabilities to a new client segment: private and institutional investors.

Morningstar President Kunal Kapoor, who has served on the board of directors for PitchBook since 2012 and will become chief executive officer of Morningstar effective January 1, 2017, says, "Both Morningstar and PitchBook share the goal of bringing transparency to the investment landscape, and PitchBook is in a great position to continue its strong growth trajectory as private markets and private companies are areas of rapidly growing investor interest. Data has always been Morningstar's sweet spot, and we look forward to working with PitchBook to help investors and advisers better understand and navigate this evolving area of the market. Over time, we plan to add some of Morningstar's proprietary research capabilities to this dataset, and we also see meaningful opportunities to expand the business globally."

PitchBook will maintain its brand and identity and will continue to be led by founder and CEO John Gabbert.

"I reached out to Morningstar as a potential investor seven years ago because I admired the company's entrepreneurial spirit and innovative products," says Gabbert. "Joining forces with Morningstar will help us enter into our next stage of growth, including developing the next-generation version of our award-winning data and software platform, investing in our world-class sales and customer support functions, and expanding our business in Europe and Asia. As investors increasingly broaden their horizons beyond traditional public markets and investments, the multi-asset capabilities Morningstar is building will become even more valuable."

Morningstar was an early investor in PitchBook and currently owns approximately 20% of the company. Morningstar expects to pay approximately $180 million (subject to working capital adjustments) for the remaining ownership interest in a transaction that values PitchBook at $225.0 million.

Subject to customary closing conditions, the two companies expect the transaction to close in the fourth quarter of 2016.

NEXT: Connecticut Treasurer Appoints New Deputy CIO

Connecticut Treasurer Appoints New Deputy CIO  

Connecticut State Treasurer Denise L. Nappier has appointed Laurie Martin as deputy chief investment officer for the Connecticut Retirement Plans and Trust Funds (CRPTF). 

“Laurie brings to the Connecticut Treasury deep operational experience with treasury management, manager due diligence and oversight, and investment accounting,” says Nappier. “In today's investment environment of low returns, it is imperative that we maintain and strengthen operational efficiency at the lowest possible cost. Laurie's impressive record in achieving best practices in back office functions in particular proved to be most complementary to our in-house team of investment professionals, and we are pleased to have her join our team.”

Martin joins the Connecticut Treasury after serving twelve years as director of Treasury Services at Baystate Health, where she managed the company’s integrated investment program which included endowment, pension (DB and DC), insurance assets and operating funds. Previously, Martin held investment accounting positions at ITT Hartford and Mass Mutual Life Insurance. She began her career at KPMG Peat Marwick as an audit and tax specialist. 

Martin holds a bachelor’s degree from American International College, and a master’s degree in business administration from the University of Massachusetts at Amherst. She also is a Certified Internal Auditor, a Certified Public Accountant and a level II candidate for the Chartered Financial Analyst Program.

“I am excited to join Treasurer Nappier and her team, and hope to add to the important work of ensuring the long-term viability of the State’s investment program,” says Martin.

Martin succeeds Deborah Spalding who had served as Deputy Chief Investment Officer from 2013 to 2015, at which time Spalding was named Chief Investment Officer.

5th Circuit Again Dismisses Verizon Pension Buyout Lawsuit

Reconsidering its previous decision in light of a Supreme Court ruling, the appellate court again found a lead plaintiff did not allege an injury-in-fact.

The 5th U.S. Circuit Court of Appeals has reaffirmed its previous dismissal of a class-action lawsuit that arose from the decision by Verizon Communications in October 2012 to purchase a single premium group annuity contract from The Prudential Insurance Company of America to settle approximately $7.4 billion of Verizon’s pension plan liabilities.

The case includes two classes of pension plan participants: those whose benefit liabilities were transferred to Prudential and those whose liabilities remained in the plan. The appellate court agreed with the dismissal of claims of the non-transferee class by a district court because the class did not prove individual harm and, therefore, lacked standing to sue.

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Its affirmance was driven, in part, by the determination that plaintiff-appellant Edward Pundt lacked Article III standing to sue for purported fiduciary misconduct pursuant to the Employee Retirement Income Security Act (ERISA). Specifically, the 5th Circuit previously held that “standing for defined-benefit plan participants requires imminent risk of default by the plan, such that the participant’s benefits are adversely affected,” and it noted that Pundt failed to “allege the realization of risks which would create a likelihood of direct injury to participants’ benefits” in this case. The court also rejected Pundt’s argument that “he directly suffered constitutionally cognizable injury through invasion of his . . . statutory rights [under ERISA] to proper [p]lan management,” concluding that standing based on invasion of a statutory right must still “aris[e] from de facto injury, which is not alleged by a breach of fiduciary duty.”

Pundt then filed a petition for writ of certiorari in the United States Supreme Court. Subsequently, the Supreme Court decided Spokeo, Inc. v. Robins, which clarified the relationship between concrete harm and statutory violations for purposes of assessing Article III standing. After deciding Spokeo, the Supreme Court granted Pundt’s petition for writ of certiorari, vacated the appellate court’s judgment in the case, and remanded the case for further consideration in light of Spokeo.

NEXT: Reviewing the Verizon case in light of Spokeo

In its new opinion, the appellate court noted that the Supreme Court reaffirmed in Spokeo that violation of a procedural right granted by statute may in some circumstances be a sufficiently concrete, albeit intangible, harm to constitute injury-in-fact without an allegation of “any additional harm beyond the one Congress has identified.” However, the Supreme Court also took care to note that “Congress’[s] role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” Rather, “Article III standing requires a concrete injury even in the context of a statutory violation.”

In Spokeo, the Supreme Court held that a bare allegation of a Fair Credit Reporting Act violation based on inaccurate reporting of consumer information was insufficient to establish injury-in-fact, as “not all inaccuracies cause harm or present any material risk of harm.” In the same way, the 5th Circuit recognized that Pundt’s allegation of an “invasion of [a] statutory right[] to proper [p]lan management” under ERISA was not alone sufficient to create standing where there was no allegation of a real risk that Pundt’s defined-benefit-plan payments would be affected.

In short, because Pundt’s “concrete interest” in the plan—his right to payment—was not alleged to be at risk from the purported statutory deprivation, Pundt had not suffered an injury that was sufficiently “concrete” to confer standing. “A bare allegation of improper defined-benefit-plan management under ERISA, without concomitant allegations that any defined benefits are even potentially at risk, does not meet the dictates of Article III; concluding otherwise would vitiate the Supreme Court’s explicit pronouncement that ‘Article III standing requires a concrete injury even in the context of a statutory violation,’” the appellate court wrote.

It reinstated and published its prior opinion.

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