Deals and People May 11, 2015

The Standard Names TPA Relationship Director

Matthew King will focus on both current and prospective TPA relationships at The Standard. 
Reported by

Financial services provider The Standard hired Matthew King within the firm’s retirement services group as the new director of third-party administrator (TPA) relationships.

King will support The Standard’s TPA partners across the country, focusing on both current and prospective relationships. Daniel Hall, vice president of retirement plan sales for The Standard, says King will also be called on to provide partnering TPAs with innovative services and resources.

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King has 20 years of experience in the employer-sponsored retirement plan marketplace—most recently as the director of TPA and specialist adviser sales support at Transamerica Retirement Solutions. He has also served in retirement plan operational leadership roles with Voya Financial.

King graduated from Saint Michael’s College in Colchester, Vermont, with degrees in political science and business administration. He holds both FINRA Series 6 and 26 licenses.

More information about The Standard is at www.standard.com. 

Administration May 11, 2015

Many DB Plan Sponsors Still Considering Risk Transfer

More than half are looking to LDI strategies to de-risk their plans.
Reported by

A survey of North American defined benefit (DB) pension plan professionals conducted by Clear Path Analysis found 23% are still considering transferring plan liabilities to a third-party insurer in 2015.

Two percent said it is very likely they will do so in 2015, and 4% indicated such a transfer was already implemented or in progress.

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Thirty-seven percent of pension plan professionals in North America are considering utilizing or increasing the usage of liability-driven investing (LDI) strategies in 2015. Eighteen percent said they were very likely to do so, and 32% reported they have implemented an LDI strategy.

Clear Path says these trends are partly the result of increasing longevity of careers and lives of the general population of North America. The Society of Actuaries released updated mortality tables for pension plans late last year, which increased the assumed life expectancy of plan participants. As a result, DB plans will have increased pension liabilities and plan sponsors have had to review future benefit obligations.

Twenty-seven percent of survey respondents indicated the new mortality tables will have no effect on the plan liabilities, while 16% said the updated numbers will increase liabilities 1% to 3%; 33% anticipate a 3% to 5% increase; and 24% expect an increase of 5% or more.

In addition, asked what action their companies would take if DB plan liabilities increased due to the new mortality tables, 12% of respondents said they would transfer risk to a third-party, 22% would offer a lump-sum window to terminated or retired participants, 25% would implement an LDI strategy, 8% would close or freeze their plans, and 23% would make an additional voluntary contribution to their plans.

Clear Path also found that interest rates affect DB plan sponsors’ de-risking decisions. Twenty-seven percent of respondents said the movement of interest rates greatly impacts their decision to de-risk through LDI strategies or annuity purchase, and 49% indicated it slightly impacts their decision.

The survey, which was sponsored by Prudential Financial included responses from 51 high-profile CIOs, finance directors or pension plan managers in the U.S. and Canada who are responsible for managing assets between $500 million and $15 billion. 

A report on the Clear Path Analysis survey, titled “Pension Plan De-Risking, North America 2015,” is available here. A free registration is required.

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