Deals and People May 5, 2017

Retirement Industry People Moves

Segal Group names Chief Actuary; PSCA names Executive Director; Former BlackRock Exec launches Retirement Readiness firm; and more.
Reported by

InTrust Fiduciary Joins CAPTRUST

CAPTRUST Financial Advisors announced that the InTrust Fiduciary Group, which specializes in institutional retirement consulting, has joined the CAPTRUST family.

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

InTrust offers fiduciary guidance in various aspects of retirement plan management. It specializes in recordkeeping provider analyses, plan design and benchmarking, and investment policy.

“Regulatory mandates are evolving within our industry, but InTrust’s fiduciary duty never wavers,” says company President Michael Maresh. “Joining CAPTRUST, a firm that shares the same core beliefs and values, provides us with the resources necessary to strengthen and broaden the services we provide for our clients, while continuing our commitment to serve as their advocate and trusted planning partner. We are extremely excited for this partnership.”

The move marks CAPTRUST’s entry into Austin, Texas, following its move into Dallas and Houston.

CAPTRUST offers advisory teams numerous resources designed to accelerate growth and add value to the client experience. It now has 120 advisers across 35 locations and advises on approximately $229 billion in client assets.

NEXT: Nuveen Expands DCIO Business

Nuveen Expands DCIO Business

Asset management firm Nuveen is growing its Defined Contribution Investment Only (DCIO) business with the addition of several executives.

Kate Jonas will serve as leader of the Consultant Relations team. She will support the firm’s efforts in the defined contribution (DC) and defined benefit (DB) plan markets. She joins from BlackRock’s Global Client Group, where she led DC consultant relations for the institutional DC team covering the United States and Canada.

Christine Stokes joins as head of Retirement Practice Management responsible for supporting the distribution growth strategy. She has worked at Voya Investment Management where she was a senior product manager focusing on multi-asset solutions for the institutional, intermediary and affiliate businesses.

Daniel Noschese who joined the DCIO Sales team will work with retirement specialists in the Midwest. Formerly with Putnam Investments, Noschese served as a Defined Contribution Investment Specialist where he was responsible for external DCIO sales for the Midwest region.

Matthew Kasa also joined the DCIO Sales team. She is responsible for DCIO sales and retirement adviser development in the Southwest. Most recently, Kasa was a vice president for DCIO sales in the southwestern United States with American Century Investments.

Ashish Gandhi will join in mid-May with responsibility for DCIO Institutional Sales. He will execute Nuveen’s new business development efforts directed at large institutional clients representing Nuveen’s full suite of capabilities including its target -date offerings to DC plan sponsors. Gandhi was previously a director within LMCG Investments’ institutional business.

Nuveen’s DCIO team works in consultation with plan sponsors, consultants and retirement plan advisers to evaluate the investment menus of retirement plans and identify ways to improve outcomes for plan participants.

NEXT: Segal Group Names Chief Actuary

Segal Group Names Chief Actuary

Eli Greenblum has been named The Segal Group’s Chief Actuary.

Greenblum brings more than 30 years of managerial and actuarial consulting experience to his new role. He is a member of several actuary organizations including the Society of Actuaries and member of the American Academy of Actuaries. He recently served as vice president for the American Academy of Actuaries.

“The Chief Actuary has overall responsibility for The Segal Group’s actuarial services, including overseeing quality and establishing policies,” says President and CEO David Blumenstein. “Eli has a wealth of actuarial experience advising multiemployer, public-sector and single-employer plans.”

NEXT: Neuberger Berman Names Head of ESG Investing

Neuberger Berman Names Head of ESG Investing

Independent, employee-owned investment manager Neuberger Berman has named Jonathan Bailey as head of Environmental, Social and Governance (ESG) investing.

Bailey will work with the firm's investment teams and research departments to further incorporate ESG principles into the equities, fixed income and alternatives platforms. He also will help portfolio managers consider ESG as part of their analytical approach to evaluating companies and markets. In addition, he will chair the firm's ESG Investment Advisory Committee.

Bailey joins Neuberger Berman from Focusing Capital on the Long Term, a think tank. Beforehand, he served as associate partner at McKinsey & Company where he advised pension plans, asset managers, and other finance institutions on a range of issues related to investment strategy, organizational structure and ESG integration. He’s also worked on sustainability and governance investment projects for both former Vice President Al Gore and former British Prime Minister Tony Blair.

The firm notes that integration of ESG factors into investment analysis and portfolio construction can be valuable in identifying companies whose sustainable business models and risk management cultures may afford attractive long-term investment opportunities.

NEXT: Putnam Hires Head of Sustainable Investments

Putnam Hires Head of Sustainable Investments

Katherine Collins has joined Putnam Investments as head of Sustainable Investing. She will be tasked with overseeing the firm’s environmental, social and governance (ESG) investment business, which is expected to include managing strategies for institutional and retail mutual fund clients. She also will responsible for driving overall thought leadership on the topic.

Previously, Collins was CEO of Honeybee Capital, a research firm focused on ESG investment issues. Earlier, she worked for Fidelity Management and Research Company from 1990 to 2008. Her roles included portfolio manager for the Fidelity America Funds, where she launched a pilot investment fund with a sustainable and socially responsible mandate. She was also a director of Equity Research and portfolio manager for the Fidelity MidCap Funds.

“Investing through the lens of environmental, social, and governance is redefining what asset management can accomplish,” says Robert L. Reynolds, Putnam’s president and chief executive officer. It is a concept that is becoming increasingly synonymous with good long-term investing and is serving to help identify opportunities. Katherine’s proven leadership and expertise will ensure we continue to move to the forefront of this rapidly growing field.”

She earned a master’s degree in Theological Studies from Harvard Divinity School and a bachelor’s degree with honors in economics and Japanese Studies from Wellesley College. She also holds the Chartered Financial Analyst designation.

NEXT: PSCA Names Executive Director

PSCA Names Executive Director

John M. (Jack) Towarnicky has joined the Plan Sponsor Council of America as the organization’s executive director.

Before joining the PSCA, Towarnicky was a visiting assistant professor of management at Duquesne University.  Prior to teaching, he served in a benefits compliance role at Willis Towers Watson. He’s also led the corporate benefits function at Nationwide Mutual Insurance Company. Moreover, he’s served in benefits leadership roles at several companies including Oil E&P, Cooper Industries, and Marathon Oil.  He has also served on boards of several benefits trade associations including the American Benefits Council, World at Work, the Corporate Board of the International Foundation of Employee Benefit Plans, and the Council on Employee Benefits.

“Jack brings both experience at employee benefits trade associations and with plan sponsors,” says Stephen McCaffrey, PSCA Board Chairman. “After an extensive search, we are pleased to find a leader with deep experience who can continue the growth and success of our organization.” 

NEXT: Former BlackRock Exec Launches Retirement Readiness Firm

Former BlackRock Exec Launches Retirement Readiness Firm

Laraine McKinnon, former managing director at BlackRock is departing her roll and taking lead at her new firm named LMC17. She announced the company is determined to bring an independent perspective and heightened focus on building effective retirement readiness programs. It will serve several players in the industry including asset managers, advisers, recordkeepers, and select plan sponsors.

Based in Silicon Valley, LMC17 will also focus on diversity and inclusion programs designed to help local technology firms onboard, retain and promote diverse talent.

"It's a critical time for financial services firms to re-frame their value proposition and understand how to deliver best practice 401(k) services to large and small American companies,” says McKinnon “There's increased pressure – from the regulatory environment to shifting demographics to a very competitive FinTech marketplace – and companies need to figure out how they're going to deliver retirement to millions of participants. LMC17 builds custom strategic sales programs that capitalize on a provider's strengths."

McKinnon is a retirement readiness expert who has served leadership roles at BlackRock, Barclays Global Investors, and Wells Fargo Nikko Investment Advisors. Her thought leadership includes optimizing 401(k) plan design, sophisticated data analytics and apps, employee engagement through financial wellness, workforce strategy, and removing behavioral roadblocks.

McKinnon also builds diversity and inclusion programs to help firms and individuals. She is the founder of a women's leadership incubator in Silicon Valley and sits on the Board of The CLUB Silicon Valley. She earned a bachelor’s degree, cum laude, in political science and women's studies from Wellesley College.

Administration May 5, 2017

Participants Still Lack Understanding of Fee Disclosures

Years after the DOL required fee disclosures be made to retirement plan participants, participant awareness continues to lack, but improvements may be coming.
Reported by

The mandatory fee disclosures under 408(b)(2) and 404(a)(5) aimed to provide both plan sponsors and participants with transparency and communication regarding investment fees; services; compensation; and more.

But while the disclosures attempted to create a clarity among providers, plan sponsors and participants, it was met with confusion instead. When the Department of Labor (DOL) fee guide proposal issued for plan sponsors in 2014 called for shorter summaries to omit lengthy, 408(b)(2) rules, no simplified guide was issued for participants. If a plan sponsor found trouble scanning through lists brimming with services and fees, how did—and do—the participants react?

Get more!  Sign up for PLANSPONSOR newsletters.

“I suspect that some plan participants use it as best as they can, and probably a lot [of participants] throw it away,” says Aron Szapiro, director of policy research at Morningstar. “Or they don’t look at it until there’s some decision point, and then they need a little extra help to contextualize it.” The issuance of the first fee disclosures to participants got less attention than anticipated.

While 2012 reports emphasized education and better communication between employers and workers to improve participant understanding of fees, a conversation with then Assistant Secretary of Labor Phyllis Borzi, with the DOL’s Employee Benefit Security Administration (EBSA), revealed service providers are not following the rule to the letter. According to Borzi, the agency did not intend for providers to offer a master list of services and fees and have plan sponsors figure out which services they are using and paying for. Also, she said, it doesn’t serve the purpose of the regulations if the plan sponsor doesn’t have to understand the fee information it is provided because providers take care of everything for 404(a)(5) participant fee disclosures.

Although education on fee disclosures may be essential at certain points, to Jim Sampson, director of retirement advisory services at Hilb Group Retirement Services, it’s identifying the overall value in a simplified manner—and focusing on that value instead of costs— that drives participants and investors to engage in their plans. Sampson urges plan sponsors and participants to focus on the real value associated with the plan.

“The sponsor decides where the money goes, who the service providers are, and the employee’s stuck with it for better or for worse,” he says. “The whole purpose of having this plan is so that employees can retire on time with enough money. There’s a whole bunch of ways to accomplish that, and fees are part of the puzzle, but it’s not the entire puzzle.”

Szapiro agrees. “They could provide educational material, but a lot of participants aren’t really going to make sense of this,” he says. “People want the simplicity of something that just sort of says, ‘yeah, this is good. This is also good. This is better,’ that can do a lot of that backend work for them.”

Sampson believes that while fee disclosures have benefited those aware of fee charges, not every participant has—or will—keep an eye of on these charges. “That’s what the plan’s fee disclosure has done, it’s opened the eyes to people who pay attention, he says. “Unfortunately, not everybody pays attention.”

NEXT: Proposed Actions and Tools to Help Participants

Will Hansen, senior VP of retirement and compensation policy at the ERISA Industry Committee (ERIC), based in Washington, D.C., believes transparency and awareness start with the engagement between a plan sponsor and participant, especially through financial wellness programs.

“If you engage with an individual at the very basic level of even basic budgeting types of exercises, hopefully you can build off of that foundation and get to the point where you then get a little into the weeds of explaining to a person; what’s the basis point (bp) and how does that basis point impact your long-term financial situation when it comes to your retirement,” he says.

He continues, “As long as employers continue to expand upon these financial wellness programs, hopefully that will engage more people to take notice of the fees that are associated with the retirement products.”

While a struggle in understanding disclosures may continue to be prevalent, current actions conducted by the ERIC hopes to diminish puzzlement in fee breakdowns, according to Hansen.

“The ERISA Advisory Council, which is an arm of the DOL, is looking at disclosures, that’s one of the projects it’s focused on,” he says. “Hopefully the DOL can take the advice of plan sponsors and how the disclosures need a little work, but there are probably some very simple tasks that can be completed to simplify even more the information that’s required to be provided.”

The Depository Trust & Clearing Corporation (DTCC) has created the Retirement Plan Reporting (RPR) solution, to increase transparency in fee disclosure compliance requirements, including 408(b)(2) and 404(a)(5). The tool, offered through DTCC’s National Securities Clearing Corporation (NSCC) subsidiary, is said to provide solutions with reporting retirement plan level information to mutual fund investor participants.

Proposed revisions to the Form 5500 implemented by the DOL last year can further participant understanding regarding investments and fees, says Szapiro.

Besides allowing the evaluation and comparison of a variety of retirement plans, the proposal would simplify indirect compensation reports regarding 408(b)(2) disclosure requirements [to plan sponsors], and in turn, benefit participants by improving transparency in the “management of their assets or revenue-sharing for administrative costs,” writes Szapiro in a Morningstar report.

“Many plan sponsors would benefit from more transparency around what other plan sponsor are paying,” he says. “Anything you can do to sort of contextualize what these fees mean, over time, is going to be valuable.” When plan sponsors understand fees, they can better explain them to participants.

He adds, “It’s very difficult for people to convert percentages into actual fees, but when it’s illustrated with, ‘if you invest this much this is what you’re paying annually with us, compared to what some of the alternatives are,’ then that could work.”

«