Reader Responses May 21, 2018

SURVEY SAYS: Most Helpful Underutilized Retirement Plan Features or Other Benefits

Data shows the majority of retirement plan sponsors have implemented what many call “best practices” for their retirement programs, but there are still some underutilized features that could help boost participant outcomes.

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Last week, I asked NewsDash readers to put their plan participant “hats” on, and choose from a list which underutilized retirement program feature or other benefits would help them the most in reaching their retirement savings goal?

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Nearly six in ten (58.8%) of respondents work in a plan sponsor role, while 32.3% are TPAs/recordkeepers/investment managers and 8.8% are advisers/consultants.

From the list of underutilized retirement program features or other benefits, the one identified as helpful by the most respondents was auto escalation of deferral rate, cited by 39.4% of responding readers. This was followed closely by a stretched match formula, selected by 33.3% of respondents. More than one-quarter (27.3%) chose personalized retirement communications, while 21.2% selected a student loan repayment benefit.

“Raising the automatic enrollment default deferral rate” was chosen by 15.1% of readers as the underutilized retirement program feature that would help them most in reaching their retirement savings goal. “Allowing separated employees to continue to make loan payments after termination” was selected by 12.1%, and 3% each chose “ending automatic cashouts of low balances” and “a high-deductible health plan with a health savings account to save for future health care expenses.”

A couple of respondents who chose to leave comments about underutilized retirement program features or other benefits said an overall financial wellness program would help and a defined benefit plan would help. The importance of automatic enrollment was mentioned, though it is no longer considered an underutilized plan feature. And one commenter explained why underutilized plan features are underutilized. Editor’s Choice goes to the reader who said: “I would love to see auto-escalation tied in with timing of wage increases. Timing with raises would make it painless as more money would go to retirement at the same time more money goes into your pocket.”

A big thank you to all who participated in the survey!

Verbatim

Another item that would greatly and immensely help is if our company had a Defined Benefit Plan, in addition to our 401(k) Plan.

We have one extremely anti-auto-anything on our Committee which sets us back. We won the auto enrollment fight years ago but can’t convince him to approve a limit of 6%.

Generally speaking, “underutilized” program features are “under” utilized because (a) they are expensive, and/or (b) they are underutilized by workers. And there are few things more aggravating than expensive, underutilized retirement program features…

Employees who need to take a loan do so because they do not have any other access to cash. Requiring them to pay back the loan balance upon termination is asking for the impossible. If they had the money sitting around to do this, they wouldn’t have needed the loan in the first place.

Put in place a new employee auto enroll voluntary retirement saving plan that auto escalated using 60% of each pay raise until IRS max is reached

HSAs provide great tax treatment, and could provide a nice balance for retirement if one is fortunate in their family’s health, and wise in health care spending. This requirement limits success.

I’m not impacted by student loans personally, but I recognize the need for help in this area amongst my younger co-workers. I am interested in hearing what other plan sponsors are doing in this area as well as what legislation is being proposed to help our student debt-burdened population.

One not mentioned was personal financial wellness. Our company does not have it, but it would certainly have helped our family.

Auto enrollment is the most important, but most controversial. We have a responsibility to get employees to save and inform them. Isn’t it also as much our responsibility to let them know they can lose everything they have saved? That 401K’s can be super risky? I know someone that lost almost everything in 2008 during the crash. They have to continue to work in their 70’s and 80’s because of this. Aren’t we responsible for letting employees know that as well? I think so

We do not allow loans or hardship withdrawals. The intended purpose of a retirement plan is to fund retirement.

I would love to see auto-escalation tied in with timing of wage increases. Timing with raises would make it painless as more money would go to retirement at the same time more money goes into your pocket.

People just need to save for retirement from the beginning of employment. If we can get them to do that, we wouldn’t have to worry about underutilization.

NOTE: Responses reflect the opinions of individual readers and not necessarily the stance of Strategic Insight or its affiliates.
Deals and People May 18, 2018

Retirement Industry People Moves

CalPERS CIO to leave fund; P-Solve rebrands to River and Mercantile Solutions; Trinity Pensions Consultants opens Indianapolis sales office; and more.

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The California Public Employees’ Retirement System announced that Ted Eliopoulos, CalPERS’ chief investment officer (CIO), is leaving the pension fund in order to relocate to the east coast to be closer to family. A search for his permanent replacement will begin immediately.

Eliopoulos will remain chief investment officer until a new CIO is named and assist in the transition through the end of 2018. 

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“With two daughters in college, and one with health considerations that require my wife and me to be within reasonable distance, we have decided to relocate to New York City where they both will be in school,” says Eliopoulos. “Due to this fact, I will be stepping away from CalPERS by the beginning of 2019.”

“It’s been extremely rewarding to have helped steward an investment institution that serves so many hardworking and deserving California families. I am confident the transition to a new CIO will be seamless as I leave the office in the hands of some of the most skilled investment professionals in the industry,” Eliopoulos continues.

“Under Ted’s leadership, the investment office has greatly reduced the cost and complexity of the investment portfolio and increased transparency around fees,” says Marcie Frost, CalPERS CEO. “Because every dollar we save goes back into the fund, our members will directly benefit from those cost savings for years to come. Ted has always been guided by our fiduciary obligation to our members and the fund.”

As CIO, Eliopoulos managed an investment portfolio of more than $350 billion, comprising both public and private assets, and a team of nearly 400 investment professionals. During his tenure, Eliopoulos implemented the Vision 2020 Strategic Plan, which sought to reduce the complexity of the portfolio, reduce fees, and better manage risk.

Under Eliopoulos’ leadership, CalPERS established its first Emerging Manager Plan in 2012 and the Investment Office’s first Diversity & Inclusion Committee in 2016. He also established CalPERS’ first Governance and Sustainability Plan and the Opportunistic Credit Program in 2016.

Eliopoulos joined CalPERS in 2007 as senior investment officer for the Real Estate division and the Real Assets unit. Following the financial crisis, he led the effort to restructure the asset class, refocusing on core investments in real estate and infrastructure that generated stable returns. He continued this work across all asset classes when he was appointed interim CIO in June 2013 and later as the permanent CIO in September 2014.

“Ted’s commitment to the long-term health of the Fund has been unwavering,” says Henry Jones, chair of the Investment Committee. “It has been an honor to work with him, and we are incredibly grateful for his service to California over the past decade.”

 

Mesirow Adds U.K. Based SVP

Mesirow Financial hired Amy Middleton as senior vice president within its Currency Management business. Based in the U.K., Middleton will be responsible for interaction with the group’s global client base, performing bespoke portfolio research initiatives in partnership with the CEO and advising on investment strategies.

Middleton has over 16 years of currency management experience. Prior to joining Mesirow, she was a senior FX portfolio manager and quantitative researcher at SSGA. Previously, she was the founder of FX Analytical Solutions Ltd, an FX consultancy company, senior quantitative currency product strategist at Millennium Global Investments, London, and vice president within the FX quantitative research group at Bank of America, London.

“Amy brings quantitative skills and FX knowledge that will be instrumental in enhancing our ability to provide high quality currency risk management solutions to our global client base,” says Currency CEO, Joe Hoffman. “I am pleased she shares our client-centric approach and am confident she will help us continue to add value for our clients now and well into the future.”

P-Solve Rebrands to River and Mercantile Solutions

P-Solve announced it intends to reposition its brand to River and Mercantile Solutions effective July 1.

The alignment of a consistent brand across the River and Mercantile Group reflects the increasing degree to which the macro thinking across the business is used to develop the investment views and advice for all the group’s clients, the firm said.

“Re-branding P-Solve to River & Mercantile Solutions defines our identity as investment and actuarial specialists focused on the needs and desired outcomes of our clients. The alignment of a consistent brand across the Group will help us streamline our messaging in the marketplace across all of our divisions going forward,” says Ryan McGlothlin, P-Solve managing director.

P-Solve is the division of River and Mercantile Group PLC that provides investment consulting and fiduciary management services to institutional investors including actuarial and annuity placement services in the U.S. The firm provides services to predominantly defined benefit (DB) and defined contribution (DC) retirement plans as well as to insurance companies, insurance captives, endowments, and foundations.

River and Mercantile Group PLC operates through four principal divisions: Solutions, including both Advisory (investment, actuarial, annuity placement) and Fiduciary Management (OCIO); Derivative Solutions, providing structured equity and liability driven investing; Equity Solutions, providing both U.K. and global equity strategies; and the Multi Asset division, providing Dynamic Asset Allocation and other multi asset based solutions.

FIS Group Hires SVP to Manage Sales and Marketing

FIS Group announced that Robert Morier has joined the firm as a senior vice president of sales and marketing. He will oversee FIS Group’s marketing and sales efforts, and will report directly to Tina Byles Williams, CEO and CIO of FIS Group.  

“We are delighted to welcome Mr. Morier to the team,” says Byles Williams. “He brings over 18 years of experience in sales and marketing strategies for global and non-U.S. equity and debt investment products, which serves to enhance our continued commitment to meet and exceed our client’s performance objectives.”

Morier joins FIS Group from Global Evolution USA, where, as managing director, he directed the launch of its emerging and frontier sovereign debt strategies for North American institutions. He held previous directorships overseeing institutional investments at ClearBridge Investments, Indus Capital and Artio Global Investors. He also served as a vice president of institutional relationship management at Goldman Sachs. 

Morier has a bachelor’s degree in history from the University of Vermont. He is an advisory board member for the University of Vermont Grossman School of Business, and has been a Toigo Foundation mentor since 2009. 

 

Trinity Pensions Consultants Opens Indianapolis Sales Office

Trinity Pension Consultants is expanding its presence in Indiana with a new sales office opening in Indianapolis. Retirement Plan Consultant Aaron Stratman will be heading the office. This follows the company’s growth into the Kentucky market in 2014.

In preparation, Stratman trained closely with Kevin Bergdorf, Trinity principal and founder. Bergdorf, who spearheaded the Kentucky expansion, said, “Aaron is driven and well-versed in the complexities of qualified retirement plans. More importantly, he’s honest and personable. We feel confident in his ability to build relationships and impact the wealth management space.”

An independent, non-producing third-party administrator (TPA) and actuarial firm, Trinity focuses on advanced plan design. The company prides itself on its transparency with financial advisers, plan sponsors and investment providers.

PanAgora Selects Past Head to Lead Business Strategy Team

PanAgora Asset Management announced that Yosef Zweibach has been appointed as head of Business Strategy & Investor Relations. In this new role, Zweibach will be responsible for helping to enhance and expand the firm’s external exposure with institutional allocators while assisting PanAgora’s distribution team with value-added and solution-oriented initiatives to assist PanAgora’s client base. 

Prior to joining PanAgora, Zweibach spent more than eight years at Barclays Capital where he served as global head of Quantitative Sales. During his time with the firm, he assembled and led a team of professionals that became one of Wall Street’s most respected quant units. Prior to Barclays, Zweibach served as a paratrooper in the Israeli Defense Forces.

“Yosef is a proven investment leader with an extensive background in systematic quant investing that will benefit us as we continue to enhance our platform and meet investors’ needs,” says George Mussalli, chief investment officer, Equities at PanAgora. “We are looking forward to benefiting from his industry relationships and expertise.”

Zweibach earned a B.A. in Management from Boston University. He is currently a board member of the Society of Quantitative Analysts and on the membership committee of the Q group, an institution that provides quantitative research from scholars in the field to investment professionals.

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