Deals and People February 23, 2018

Retirement Industry People Moves

Derrin Watson fielding questions for ERISApedia Ask the Author service; Prime Capital Investment Advisors launches Fiduciary Investment Trust; StayWell acquires Provata Health; and more.

Reported by

DCIAA Adds Senior-Level Positions for Retirement Research Center

The Defined Contribution Institutional Investment Association (DCIIA) has added two senior-level positions to its full-time staff:

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

  • Peg Knox, chief operating officer (COO), DCIIA, who joined as of February 20
  • Warren Cormier, executive director, DCIIA Retirement Research Center (RRC), who joined as of January 2

“We are pleased and excited to have Warren and Peg join the DCIIA team in these important roles,” says Lew Minsky, DCIIA president and CEO. “The newly launched RRC represents the next phase in DCIIA’s evolution as we continue to work to enhance retirement security. Warren’s deep research expertise and industry experience are an ideal match. Having Peg’s perspective as a plan sponsor veteran as well as her numerous managerial and operational skills will also play a crucial role in our continued growth.” 

Prior to joining DCIIA, Knox was the global retirement plans manager at Bechtel Global Corporation, where she worked to generate and implement new ideas for Bechtel retirement plans to enhance retirement security for its employees. Previously she had served as Bechtel’s treasurer, where she ensured efficient global treasury operations including cash management and investments, debt and credit lines, foreign exchange services and other treasury functions to support the company’s business lines. Knox has an MBA from Saint Mary’s College and is based in San Francisco.

Cormier has previously served as CEO and co-founder of Boston Research Technologies and as president and founder of Boston Research Group. Cormier is a veteran in the financial services industry with more than 25 years of experience in research for investment companies, banks and insurance companies. He is also recognized as a market research leader in the defined contribution industry. He is the cofounder of the Behavioral Finance Forum with Shlomo Benartzi and is based in Charlotte, North Carolina.

Derrin Watson Fielding Questions for ERISApedia Ask the Author Service 

ERISApedia.com announced that S. Derrin Watson, JD, APM, attorney, author and speaker, is currently answering questions submitted through the “ASK the Author” service. The service allows subscribers to submit questions and receive responses from Watson within four business hours.

The ERISApedia.com “ASK the Author” (ASK) is a service available to subscribers of ERISA [Employee Retirement Income Security Act] compliance products via an online library including several titles such as “The Qualified Plan eSource,” by Ilene H. Ferenczy; “Who’s the Employer,” by S. Derrin Watson; “The Form 5500 eSource,” by Timothy M. McCutcheon, “The Fiduciary Responsibility eSource,” by Charles G. Humphrey, among others. 

“I really enjoy fielding questions from ASK subscribers.” says Watson. “So much of my career has involved assisting pension professionals. This allows me to provide that help on a quick, personal level. The ASK service is a great idea. Subscribers pay a very affordable fee to have rapid responses from a recognized professional. I’m delighted to have the opportunity to use my experience to assist the pension community in this way.” 

Prime Capital Investment Advisors Launches Fiduciary Investment Trust

Prime Capital Investment Advisors announces the launch of Fiduciary Investment Trust, LLC (FIT) as a separate enterprise. FIT provides comprehensive solutions that address a number of critical challenges facing employer-sponsored retirement plans.   

At the highest level, FIT is focused on retirement plan health, which starts with “participant outcomes” – getting plan participants financially on track for retirement. “Increased savings is key for the vast majority of Americans and the only way we know to motivate people to save more is through robust education,” says Glenn Spencer, CEO of Prime Capital. In addition to participant education, FIT provides unbiased investment products with a strong track record of performance, plan health analytics and fiduciary risk management.

The launch of FIT comes with the appointment of Robert J. Cruz, executive vice president. Cruz joins FIT from AllianzGI and previously BlackRock. Cruz brings over two decades of leadership in defined contribution (DC) and institutional investments to FIT. 

“We are incredibly fortunate to have attracted Robert to lead FIT,” says Scott Colangelo, executive chairman of Prime Capital. “His track record of leadership and success is unparalleled.”  

StayWell Acquires Provata Health

StayWell, a health empowerment company, has acquired Provata Health, a Portland, Oregon-based digital health company that delivers scientifically proven population health programs to employers, health plans, and hospital systems. Provata Health’s native iOS and Android mobile apps, cutting-edge technology and innovative platform will be integrated with StayWell features to streamline the user experience and help deliver even greater physical and mental health benefits.

“Provata Health offers an impressive platform and innovative design that, like StayWell’s offerings, is grounded in scientific research with peer-reviewed, published studies that demonstrate its success in helping people become happier and healthier. The Provata platform is a great complement to StayWell’s existing product portfolio, enhancing our competitive market position and further empowering individuals to take active roles in their own health and achieve the best possible outcomes,” says StayWell CEO Nicole Latimer. “From home, to work, to their health care providers, this acquisition directly supports our mission to help consumers throughout their entire well-being lifecycle.”

With Provata Health, StayWell will extend the capabilities of its solution with features 
such as:

  • Enhanced digital health coaching
  • Real-time data analytics and dashboards to measure and support participant engagement and client reporting
  • Advanced activity tracking
  • Pioneering use of virtual reality (VR) to support meditation and stress management
  • Access to a network of more than 80,000 U.S. licensed physicians
  • Integration with electronic medical records (EMRs) to capture participants’ lab values and other data
  • Digital health games

Provata Health currently serves 500,000 members across 1,000 worksites, with a roster of clients including leading health systems, health plans, municipalities, and employers. Under terms of the agreement, all Provata Health employees will join StayWell, giving the company a new presence in Portland, Oregon. Provata Health CEO Alex Goldberg will assume the role of vice president of innovation for StayWell, while head of Business Strategy and General Counsel Aaron Goldberg will serve as vice president of StayWell client solutions.

“We are excited to join forces with StayWell to bring even more robust digital well-being solutions to the market,” says Goldberg. “The combination of our offerings provides individuals with powerful, engaging tools that will enable lasting improvements to their physical and mental health.”

Compliance February 23, 2018

IRI Calls on Congress to Pass Mandatory 401(k) Legislation

A blueprint from the Insured Retirement Institute offers a guide for its dialogue with Congress and the Administration about improving Americans’ retirement outlook.

Reported by

The Insured Retirement Institute (IRI) has issued a Retirement Security Blueprint, meant to guide the group’s dialogue with Congress and the Administration about improving Americans’ retirement outlook.

“The Blueprint was constructed on the pillars of expanding opportunities to save, increasing access to lifetime income in retirement, helping savers make decisions about their finances for their retirement and protecting older investors from financial exploitation,” says IRI Senior Vice President and General Counsel Lee Covington. “We look forward to presenting and discussing these proposals with members of Congress, the Administration and state regulators.”

The first proposal is to maintain and enhance the current tax treatment for retirement savings. IRI also notes that at one point, the Tax Cuts and Jobs Act would have potentially consolidated 401(k), 403(b) and 457 plans. The final legislation did not do that, IRI says, adding that it believes each of these different types of plans are appropriate for the groups they serve.

IRI notes that distributions from guaranteed lifetime income products, including annuities, are taxed as ordinary income. IRI is asking Congress to either lower that tax rate or eliminate it altogether.

Secondly, IRI wants the government to expand opportunities for Americans to save for retirement. The Institute notes that only 40% of full-time workers at small and medium-sized businesses are offered a 401(k) plan. Thus, IRI is asking Congress to pass legislation, such as the Automatic Retirement Plan Act of 2017, which would require all but the very smallest companies to maintain a 401(k) plan and automatically enroll workers into it.

IRI also notes that there are several bills, including the aforementioned one, that would remove the restrictions on employers joining together in a multiple employer plan (MEP).

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

Furthermore, IRI would like Congress to pass a bill, such as the Retirement Security Act of 2017, which would increase the automatic deferral rate to 6% and permit automatic escalation up to 15%.

Under current law, small employers with up to 100 employees can receive an annual tax credit equal to 50% of the costs of starting a retirement plan, up to a maximum of $500 for three years. IRI would like the credit to be available for five years and for the maximum credit to be $5,000.

Lifetime income

Thirdly, IRI would like either the Department of Labor (DOL) or Congress to clarify employer fiduciary responsibility for choosing lifetime income products, in order to increase Americans’ access to lifetime income products.

Currently, if an employer that offers a lifetime income product changes recordkeepers, the annuity holders would lose the guarantees associated with those products, due to a technicality in the tax code. IRI would like Congress to amend the code to treat a recordkeeping change as a distibutable event.

The Internal Revenue Service (IRS) tax code currently only allows for a defined contribution (DC) participant to purchase an annuity or other guaranteed lifetime income product at age 59-1/2 or older. IRI would like that to be reduce to age 50 and older. Also, the tax code currently requires an annuity owner to take a required minimum distribution (RMD) at age 70-1/2. Because of longer lifespans, IRI would like that to be raised to age 75.

Additionally, the regulations currently limit the premiums an individual can pay for a qualifying longevity annuity contract (QLAC) to the lesser of $125,000 or 25% of an individual’s account balance in a DC plan or individual retirement account (IRA). IRI would like Congress to ease the administrative challenges associated with rolling over funds into a QLAC and to increase the size of the amount exempted from the RMD rules. IRI would also like Congress to permit capital appreciation and/or capital preservation products to qualify as qualified default investment alternatives (QDIAs).

The fiduciary rule

Fourthly, IRI would like the government to help savers make decisions about their finances. IRI supports the DOL’s fiduciary rule, which is now under review. “IRI and its members have long supported the principle that financial professionals should be required to act in their clients’ best interest when providing personalized recommendations,” IRI says. “To avoid the creation of duplicative or conflicting rules, IRI urges all regulatory bodies—including the Securities and Exchange Commission (SEC), the National Association of Insurance Commissioners (NAIC), the DOL, the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA)—to work constructively and collaboratively to develop a clear, consistent and workable best interest standard.”

IRI would also like lifetime income estimates to be required to be included on workers’ benefits statements, and for the government to adopt a variable annuity summary prospectus. IRI would also like electronic delivery of statements and prospectuses to be the default option for providing required disclosures to participants, with an option to switch to paper if desired.

Lastly, IRI would like the government to help financial advisers protect their older clients from financial exploitation and to increase federal appropriates to state adult protective agencies.

A full copy of IRI’s Retirement Security Blueprint can be downloaded here.

«