Retirement Industry People Moves

Former principal joins Cohen & Buckmann as senior counsel; SMArtX selects president and COO; and Heartland Retirement Plan Services hires business development leader. 

Former Principal Joins Cohen & Buckmann as Senior Counsel

Elizabeth Drigotas, a former principal in the Washington National Tax of Deloitte Tax LLP and attorney-advisor in the Office of Benefits Tax Counsel of the United State Treasury Department, has joined New York-based executive compensation and employee benefits law firm Cohen & Buckmann, P.C., as senior counsel.

Drigotas’s practice focuses on executive compensation and benefits plan design.  She has more than 25 years of experience working with compensation and benefits plan design and implementation, with an emphasis on related tax issues. Her clients encompass private and public employers, including multinational and Fortune 100 companies, as well as tax-exempt entities.  A significant part of her practice involves advising financial services clients on partnership compensation, and she has extensive experience working on strategic acquisitions and private equity transactions.

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 “I have known Elizabeth for many years and am excited to add such a skilled and respected attorney to our practice,” says Sandra Cohen, managing partner of Cohen& Buckmann. “Elizabeth’s experience at the U.S. Treasury and Deloitte has afforded her an incredibly deep understanding of this nuanced area of the law so that she is able to provide clients pragmatic solutions, and often simplifies the most complex issues for them.”

At Deloitte, Drigotas focused on nonqualified deferred and equity compensation, often within the context of mergers and acquisitions.

Earlier in her career, she worked at the U.S. Treasury as an attorney-advisor in the Office of Benefits Tax Counsel, where she provided advice and counsel to the Treasury and the Internal Revenue Service on policies and laws and their related regulations, such as Section 280G, also known as Golden Parachute Regulations; the Economic Growth and Tax Reconciliation Relief Act; and proposals that led to Section 409A, which regulates nonqualified deferred compensation, among others.

Drigotas earned her juris doctor degree from the University of North Carolina School of Law and her master of public health degree from the Johns Hopkins Bloomberg School of Public Health.

SMArtX Selects President and COO

SMArtX Advisory Solutions (SMArtX) has hired Jonathan Pincus as SMArtX’s new president and chief operating officer (COO).

Pincus joins SMArtX from Northern Trust, where he most recently held the position of senior vice president, global head of investment operations for its Asset Management division. He formerly held the role of chief operating officer for Northern Trust’s Managed Accounts business.

Pincus also previously worked at Bloomberg and formerly held his Series 7, 65, and 63. He has served on a number of fintech firm advisory boards and is an industry thought leader on operational scale and business enablement.

“We are pleased to welcome Jonathan to the SMArtX leadership team and fortunate to have someone of his caliber steering this critical function across our business,” says Evan Rapoport, CEO of SMArtX. “Jonathan’s deep domain expertise in banking, innovation and large-scale deployment makes him the perfect person for the role as we continue to drive new enterprise growth and mobilize technology at scale for this segment.”

“I am looking forward to joining SMArtX at such an exciting time in the company’s evolution,” Pincus said. “The need for technology, tools and transparency to function flawlessly has never been more important. I have reviewed countless asset management platforms throughout my career, and none come close to the abilities that SMArtX offers. In creating advanced tools to manage assets across enterprise networks, they completely streamline the middle and back-office systems in a way that is unprecedented in our industry.”

Pincus will join SMArtX Advisory Solutions in its West Palm Beach, Florida, headquarters.

Heartland Retirement Plan Services Hires Business Development Leader

Heartland Retirement Plan Services has added Ray Jambois as retirement plan services (RPS) business development officer. His responsibilities include implementing sales strategies and providing retirement plan services to current and prospective clients in the Midwest region, particularly in the Minnesota, Wisconsin and Kansas/Missouri markets.

Jambois has over 25 years of experience in the retirement planning industry, which includes working with business owners and executive staff in evaluating plan design and compliance, fund reviews and overall plan structure. Throughout his career, he has focused on territory development, establishing and maintaining strong adviser relationships and point of sales (POS) presentations.

Prior to joining Heartland RPS, Jambois worked at Lincoln Financial Group, where he most recently served as regional vice president, sales director. He holds FINRA Series 6, 63 and 65 licenses.

Public DBs May Lose Ground on Funding Progress

However, all but the worst-funded plans will maintain sufficient assets from which to pay benefits, a study finds.

“If markets remain at their current levels until June, most state and local pension plans will end fiscal year 2020 with negative annual investment returns, reduced asset values, lower funded ratios and higher actuarial costs,” says a report from researchers at the Center for Retirement Research at Boston College, with support from the Center for State and Local Government Excellence (SLGE).

However, the researchers note, while this outcome is a step backward in public defined benefit (DB) plans’ funding progress, most plans will have enough to pay benefits indefinitely.

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They estimate that the ratio of assets to liabilities for public plans slipped from 71% in 2019 to 69.5% in 2020. As a result of this drop in the funded ratio, the average actuarially determined contribution is estimated to rise from 18.8% to 19.7% of payroll.

Pension researchers—and some practitioners—have questioned the adequacy of actuarially determined contributions as they are commonly calculated. The report says they question the use of “overly optimistic investment return assumptions and relatively lax methods for amortizing the unfunded liability.” According to the researchers, if plans were to use investment return assumptions that more closely reflect their actual performance since 2001 and use more stringent approaches to amortize unfunded liabilities, the average actuarial contribution in 2020 would rise from 19.7% of payroll to 37.6%. “The future trajectory of plans’ funded status will depend crucially on the ability of governments to meet contributions based on more conservative investment return assumptions and more stringent amortization methods,” they say.

Projections from 2020 to 2025 show that the average funded ratio for public plans will steadily decline but, even if markets do not fully recover until 2025, most plans will emerge with enough assets to pay benefits indefinitely. The researchers extended projections under two possible market scenarios. Under the first, markets remain at current levels until June 2021 and then steadily climb to their previous peak by 2023 and, from that point forward, plans achieve their assumed return—roughly 7.2%. Under the second, more pessimistic scenario, markets remain at current levels until June 2021 but the recovery takes longer, with markets steadily climbing to their previous peak by 2025.

The result of the first scenario is that the aggregate funded status of public plans declines to 62.7% in 2025, and the actuarially determined contribution rises to 25.1% of pay. Under the more pessimistic scenario, the funded ratio drops to 55.5% and required contributions rise to 29.1% of pay. In addition, the average ratio of assets to benefits—what the researchers say is a rough measure of trust fund health—drops from 11.6 in 2020 to either 9.4 or 7.9 in 2025—meaning public pensions will have on hand assets equal to roughly eight to nine years of benefits in 2025.

However, the researchers say it is important to note that plans can sustain asset levels as long as annual investment returns exceed their cash flow. The projections show that cash flows fall from negative 3% of assets to either negative 3.8% or negative 4.5% in 2025. “Given these relatively attainable thresholds, no plans are projected to exhaust their trust fund within the next five years,” they conclude.

That conclusion is for plans in the study sample, but the researchers also looked at what would happen for plans with already extremely low funded ratios in 2020 if markets are slow to recover. For the 20 worst-funded plans, the average ratio of assets to benefits is projected to decline slightly from 5.6 in 2020 to 3.9 in 2025. That figure means that, in 2025, they will have on hand assets equal to roughly four years of benefits. Two plans in particular which have severely negative cash flows, will see their asset-to-benefit ratios deteriorate even more dramatically—ending the 2020 to 2025 period with assets equal to less than two years of benefit payments. Five plans will end up with less than three years of benefit payments saved as assets.

The researchers add that for plans that exhaust their assets soon after 2025, the potential pay-go costs are significantly greater than current contributions—in some cases, more than 50% higher.

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