UAW Members at GM, Stellantis to Gain Access to Hueler Lifetime Income Solutions

The retirement income benefit was a bargaining chip in negotiations that included a UAW request to bring back a defined benefit pension plan.

While the United Auto Workers at General Motors and Stellantis will not see the return of their company pensions as a result of their recent contract negotiations, they will soon have access to Hueler Income Solutions—an online platform that offers retirement income annuity products.  

According to Kelli Hueler, founder and CEO of Hueler Companies, GM asked her company to engage in the bargaining discussions with the union to show that the company would provide a pension-like option to workers. The program was key to reaching a consensus among the parties relative to lifetime income coverage, according to Hueler. 

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Both GM and Stellantis had already made Hueler’s program available for their salaried positions. According to Hueler, the program will now be rolled out to union-covered employees in the coming weeks. 

“It’s really gratifying … to get to this place where your program can be acceptable to all parties in a situation where there’s a need for a resolution,” Hueler says. “We always give plan sponsors the opportunity to see how participants can really be in their own driver’s seat about their income and they can model options to think about what their household needs are. It’s a tool [that] feels pretty universal when you’re talking to two groups that have a differing mindset [and] they need to come to some sort of agreement.” 

In addition to asking for wage increases, the reinstatement of cost-of-living adjustments and the elimination of wage tiers, the UAW members initially asked for the restoration of their defined benefit pension plan, which shut down in 2007. The automakers ultimately did not agree to this demand, but they did agree to a 10% boost in employer contributions to the workers’ 401(k)s, along with current retirees receiving annual bonuses for the first time in 15 years—a cumulative $1.25 billion boost in total benefits. 

“Traditional pension structures are wonderful if you can have them in place,” Hueler says. “But at the same time, they do have their own limitations. One thing about the [Hueler] program that’s a big advantage is that people can make partial decisions. They don’t have to have an all-or-nothing choice.” 

Hueler Income Solutions, located in Minneapolis, offers retirement plan participants the option of purchasing an institutionally priced annuity. The company started offering lifetime income to the institutional marketplace in 2004 and designed its platform to provide what it calls personal pensions for “transitioning investors.” 

The Hueler platform is independent and can be adjusted to help recordkeepers and other service providers meet the needs of plan sponsor clients.  

Hueler explains that users can choose when they want their lifetime income to begin, and the technology seeks to ensure that the user is given the right type of contract, such as a single premium immediate annuity offering a guaranteed stream of income. Users can also select to whom the annuity is designed to benefit, themselves or a partner or spouse. In addition, participants can decide the amount of money they want to annuitize, with a minimum of $10,000. 

There is a one-time 1% transaction fee built into every system transaction to support the technology, Hueler explains. 

“But if I’m, let’s say, 55 [years old] and I’m not retiring, and I just want to start getting educated, I can run as many quotes as I want from now until the time I retire,” Hueler says. “Technology has allowed us to create something super user-friendly, very simple to understand … with full disclosure of any costs.” 

Hueler Income Solutions announced in September 2023 that U.S. salaried employees and retirees at Stellantis would gain access to the solution’s Think Income Program, which allows participants to use an estimator that shows how using a portion of a participant’s savings can guarantee that person a certain amount of income in retirement. 

Other large plan sponsors also currently use the program, including IBM and Boeing. 

Can You Permit Crypto in a Brokerage Window?

Probably not worth the risk, but there is no ban on it.

The Securities and Exchange Commission on Wednesday approved applications for a “number of spot bitcoin exchange-traded product (ETP) shares.” An SEC order confirmed that a total of eleven ETFs were approved.

The SEC had denied an application from Grayscale Investments to create a bitcoin exchange-traded fund. The U.S. Court of Appeals for the District of Columbia Circuit overturned the decision in August 2023 for being arbitrary and capricious.

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Now that the ETFs have been approved, what does this mean for sponsors? Michael Kreps, a principal in Groom Law Group, says that guidance issued by the Department of Labor in March 2022 cautioning sponsors against using cryptocurrency in plans governed by the Employee Retirement Income Security Act is “still good agency guidance.”

The guidance says that “the Department has serious concerns about the prudence of a fiduciary’s decision to expose a 401(k) plan’s participants to direct investments in cryptocurrencies.” It refers to them as “speculative and volatile” and noted valuation and regulatory concerns.

Addressing participants’ ability to access crypto assets through a plan’s brokerage window, the guidance adds that “plan fiduciaries responsible for overseeing such investment options or allowing such investments through brokerage windows should expect to be questioned about how they can square their actions with their duties of prudence and loyalty in light of the risks described above.”

Kreps says that the DOL has not elaborated on this, but if the “federal government is telling people, firing a warning shot, that if you invest in crypto, we will investigate you, it is hard to see that as not having any sort of chilling effect.”

The 2022 guidance suggests that sponsors should be monitoring what is offered through brokerage windows, though that is not a common practice in the industry, Kreps says.

According to Kreps, very few plans offer crypto assets in their lineups or brokerage windows. A sponsor does have a fiduciary duty to select a prudent brokerage window provider, and that provider is not a fiduciary itself. However, if either party “vets the investments that are offered in that window, or over-curates the window, you could at some point become a fiduciary.”

The eleven applications were approved together, according to Teresa Goody Guillén, a partner in Baker Hostetler, to prevent giving any one applicant a “first mover advantage.” Only the ETF created by Ark Invest and 21 Shares had a deadline for Wednesday.

SEC Chairman Gary Gensler, in his statement about the approval of spot bitcoin ETPs, said, “Commission staff is separately completing the review of registration statements for 10 spot bitcoin ETPs simultaneously, which will help create a level playing field for issuers and promote fairness and competition, benefiting investors and the broader market.”

Guillén explains that the ETF model will “open up the investment to smaller investors.” This possibility has led to some “market movement” in the bitcoin currency, which is “indicative of how interested the market is in this.” Other applicants include Fidelity Investments and Grayscale Investments, according to Guillén.

Applications were initially denied because of the risk of market manipulation. Since that reason was struck down, the SEC must either approve them or find another reason to deny them, Guillén says.

Gensler posted on social media platform X on Tuesday that crypto assets “may not be complying w/ applicable law” and that “crypto assets also can be exceptionally risky and are often volatile.” He added that “Fraudsters continue to exploit the rising popularity of crypto assets to lure retail investors into scams.”

The SEC’s release stated that the approval “should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities. Nor does the approval signal anything about the Commission’s views as to the status of other crypto assets under the federal securities laws or about the current state of non-compliance of certain crypto asset market participants with the federal securities laws.”

Gensler added: “While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin. Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.”

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