Deals and People June 1, 2018

Retirement Industry People Moves

Capital Group Hires LDI Strategist; T. Rowe Price to Close Tampa Office in 2019; and Trinity Pension Consultants Promotes Consultant.

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Capital Group, in an effort to expand its liability driven investment (LDI) team, has added Colyar Pridgen as senior LDI strategist, based in Los Angeles. 

Prior to joining Capital, Pridgen was a senior LDI strategist at Standish Mellon Asset Management.  Before that, he was a consultant and actuary at Willis Towers Watson. Pridgen obtained his bachelor’s degree in economics from Cornell University.  He is a credentialed actuary (FSA, EA) and also holds the Chartered Financial Analyst designation. 

Gary Veerman, head of LDI Solutions at Capital Group, says, “We are very happy to have Colyar joining our team at Capital Group.  Colyar’s experience and background make him an ideal addition to our growing LDI business.  Companies are looking for LDI managers with leading fixed income platforms and an understanding of complex, long-term pension issues and our LDI team is growing with those priorities in mind.”

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“I am very pleased to be joining Capital Group given its stellar reputation in the institutional space,” says Pridgen. “Capital Group’s fundamental credit research approach and LDI implementation experience are what plans will continue to need as they expand their LDI programs, and I greatly look forward to helping grow our presence.”

T. Rowe Price to Close Tampa Office in 2019 

T. Rowe Price Group announced that it will not be renewing its office lease in Tampa, Florida, and plans to close its Tampa Operations Center in June 2019, consolidating into the firm’s two other sites servicing individual investors and retirement plan participants. The remaining locations are owned multi-building campuses in Owings Mills, Maryland, and Colorado Springs, Colorado.

According to the company, the decision was made after careful consideration and responds to a growing client preference to engage digitally after the firm saw success in its digital transformation and technology innovations.

Currently, about 400 associates work in the Tampa office, with the majority in phone support and other client service roles. Approximately 30 associates with assigned client relationships, including regional relationship managers and members of the retirement plan employee meeting team, will remain in the area working remotely. All other associates are being encouraged to consider relocation by pursuing roles at other sites. The firm continues to hire in Maryland and Colorado and also plans to transfer approximately 220 positions from Tampa to these locations. Given ongoing efficiency efforts and through the site consolidation, the firm ultimately expects that approximately 150 positions will not be replaced during this period. The firm will provide associates with appropriate resources and dedicated transition support.

“This strategic business decision was difficult because of the significant impact it will have on our Tampa associates,” says William J. Stromberg, president and CEO. “We are grateful for the many contributions they have made to our clients, the firm, and the community. By sharing this news well in advance we hope to provide them with ample opportunity and support to plan for the transition.”


Trinity Pension Consultants Promotes Consultant

Trinity Pension Consultants, Ohio’s largest third-party administration (TPA) firm focusing exclusively on qualified retirement plans, announced the promotion of Thomas Carline to regional retirement plan consultant for all of its Cincinnati, Ohio, and Kentucky clientele. 

Carline has served as a Trinity retirement plan consultant since 2013, most recently as the lead consultant for the Kentucky market. Based in Louisville, Kentucky, he will continue to serve this territory while also spending time in Trinity’s Mason, Ohio, sales office. 

“Tom has provided key strategic recommendations on complex cases nationwide,” says Kevin Bergdorf, Trinity principal and founder and author of “The Cash Balance Conversion.” Bergdorf, who spearheaded the firm’s expansion into Kentucky in 2014, adds, “He is a creative problem-solver with experience in all aspects of the qualified retirement plan space. Tom will be a true asset to Cincinnati business owners and financial advisers alike.”

Prior to Trinity, Carline worked as a financial adviser and an investment consultant at the Kemelgor Financial Group and PNC Investments, respectively. He holds a B.S. in Finance from The Ohio State University and is a current member of the American Society of Pension Professionals & Actuaries.

Compliance June 1, 2018

Taxpayer Association Seeks to Derail California Secure Choice

According to the text of the complaint, the act that created the California Secure Choice program “violates the Supremacy Clause of the United States Constitution because it is expressly preempted by the Employee Retirement Income Security Act of 1974.”

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The Howard Jarvis Taxpayers Association (HJTA) has filed a complaint in the United States District Court for the Eastern District of California—on behalf of itself as a non-governmental employer and on behalf of its members as non-governmental employees, non-governmental employers, and California taxpayers—to halt the ongoing implementation of the California Secure Choice Retirement Savings Trust Act.

According to its supporters, the California Secure Choice Retirement Savings Program is meant to provide a voluntary, low-risk, auto-enrollment retirement savings plan for many uncovered workers in the state who would otherwise have little opportunity to start saving in a constructive way. According to detractors, such as HJTA, the program will most likely prove to be an expensive experiment that does little to actually improve retirement savings adequacy in the state. 

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Named as defendant is the California Secure Choice Retirement Savings Program and John Chiang in his official capacity as the chair of the California Secure Choice Retirement Savings Investment Board. According to the text of the complaint, the act that created the Secure Choice program “violates the Supremacy Clause of the United States Constitution because it is expressly preempted by the Employee Retirement Income Security Act of 1974.”

“ERISA establishes nationally uniform standards to protect private employees and does not allow state-run retirement programs for private employees,” the complaint states. “Without preemption of CalSavers, such non-governmental employees’ funds will have none of the ERISA protections intended for them by the federal government since 1974. CalSavers is thus ultra vires, and HJTA seeks a declaration that CalSavers is void.”

HJTA further seeks injunctive relief under California Code of Civil Procedure Section 526a “to enjoin the waste of taxpayer funds on implementation costs under way.”

The filing of the compliant comes less than a year after the Trump administration and Congress cancelled an ERISA safe harbor established by the Obama administration, which was meant to prevent this very pre-emption issue. By issuing a new final rule, “Definition of Employee Pension Benefit Plan Under ERISA,” the Department of Labor’s (DOL)’s Employee Benefit Security Administration (EBSA) removed its final rules regarding the Employee Retirement Income Security Act (ERISA) safe harbor of government-run plans for private-sector workers from the Code of Federal Regulations.

Along some other lines of argument, HJTA suggests the fact that the U.S. Congress has expressly disavowed these types of savings arrangements established by States for non-governmental employees, means there is “no potentially valid DOL regulation permitting this state-run retirement arrangement.”

“The nationally uniform application of ERISA requires that this Court declare CalSavers void,” the group concludes.

Full text of the complaint is available here.

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