Compliance March 20, 2013

Bill Aims to Thwart Retirement Plan Leakage

Two senators introduced legislation that would give individuals who take a loan from their retirement accounts more time to repay after leaving a job.
Reported by

The Shrinking Emergency Account Losses (SEAL) Act, sponsored by Senators Bill Nelson (D-Florida) and Mike Enzi (R-Wyoming), would give workers who leave their jobs up until they file their federal taxes to repay money they have taken out of their company’s retirement plan. Under current law, workers have 60 days to repay any loans or withdrawals following their separation, to avoid paying tax penalties.  

The lawmakers’ bill would also allow employees to continue to contribute to their 401(k) plans during the six months following a hardship withdrawal. Letting workers fund their accounts after a withdrawal would allow them to receive a company’s matching contributions.  

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

“We need to give folks more incentives to continue saving for their retirement,” said Nelson, who chairs the U.S. Senate Special Committee on Aging. “Giving them extra time to restore money owed to their 401(k)s is one way we can help cut down on lost retirement savings.”  

Brian H. Graff, executive director and chief executive of The American Society of Pension Professionals and Actuaries (ASPPA), issued a statement in support of the legislation. “The power of [an employee’s] compounding retirement savings is weakened when the individual takes a hardship withdrawal from retirement savings or does not repay a loan from a 401(k) plan because it came due when employment was terminated. We are mindful that some employees have serious immediate financial needs. Therefore, we believe it is important to minimize the harm that comes from accessing retirement funds for nonretirement purposes. The SEAL Act would be an important step toward addressing this problem,” Graff said.  

“The SEAL Act proposes simple changes that will lessen the loss of retirement savings when an employee terminates employment with an outstanding loan balance and reduce the long-term impact of hardship withdrawals. Specifically, the bill extends the period that an individual retirement account (IRA) can accept repayment of outstanding loan balances as a rollover from a qualified retirement plan. The bill also includes a provision that would allow participants to continue to make elective contributions during the six months following a hardship withdrawal. These provisions are sensible improvements to current law that will allow many Americans to keep more of their retirement savings working for them,” he added.

Deals & People March 20, 2013

Manulife Adds Global Equity Team

Paul Boyne and Doug McGraw have been tasked with leading a new team in global equities at Manulife Asset Management.
Reported by

The team manages a global equity strategy for institutional clients and certain wealth management businesses of Manulife Financial and John Hancock. Both Boyne and McGraw will be senior portfolio managers and report to Christopher Conkey, chief equity investment officer of Manulife Asset Management.    

Since 2008, Boyne and McGraw served as senior fund managers for a global equity team at Invesco Perpetual in the U.K.  

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

Before Invesco, Boyne was deputy chief investment officer and head of global equities at the Bank of Ireland, conducting portfolio oversight across all regions. Before this, he spent 12 years at Morgan Stanley Investment Management, becoming managing director and senior portfolio manager for global value equity. His career also included six years as an accountant with Grant Thornton International. Boyne holds a postgraduate (M.B.S.) diploma from Michael Smurfit Graduate School of Business, University College, Dublin, and is a fellow of the Association of Chartered Accountants.    

McGraw was previously an executive director and portfolio manager for global value equity at Morgan Stanley Investment Management. He holds a bachelor’s degree in finance from Miami University and a master’s degree in business administration from the University of Notre Dame.

«