Products January 7, 2025

401(k) Connector Pontera Partners With Hightower Advisors

The partnership will integrate Pontera’s client 401(k) oversight technology with Hightower’s advisory services.

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Pontera Solutions Inc., which enables financial advisers to manage 401(k) and other workplace-sponsored accounts for retirement savers, has partnered with Hightower Advisors LLC, a registered investment adviser overseeing $166.3 billion in assets under management.

The partnership gives Pontera another large group of financial advisers with access to its platform designed to help them incorporate workplace retirement saving planning with other assets. It also adds to a multiple relationships Pontera has announced in recent years. Using Pontera’s client-permissioned platform, Hightower advisers now have the opportunity to better manage clients’ 401(k) accounts by rebalancing portfolios to enhance tax efficiency, investment returns and estate planning outcomes, according to the announcement.

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“Our partnership with Pontera opens new possibilities for our advisers to deliver their recommendations to more families and it gives them another avenue for growing their businesses,” Scott Holsopple, Hightower’s chief growth officer, said in a statement.

According to Holsopple, early adviser adoption of the platform has been strong, with positive feedback on the expanded services available to clients. Currently, Hightower Advisors has 140 teams serving clients across 34 states.

“With Pontera, advisers can deliver a higher level of service that incorporates clients’ 401(k)s into comprehensive wealth planning,” Peter Nolan, Pontera’s vice president of enterprise business development, said in a statement. “In an increasingly demanding marketplace, advisers now can provide a better service by holistically managing more of their clients’ wealth.”

The Pontera platform is compatible with the portfolio management software used by most Hightower advisers, including Black Diamond and Envestnet Tamarac.

Pontera completed several joint ventures in 2024, partnering with Independent Advisor Alliance, AdvisorEngine, Envestnet, Oppenheimer & Co. and 401GO.

Last year, the firm received pushback from the country’s largest recordkeeper, Fidelity Investments, when Fidelity announced it would block any third-party technology providers from giving advisers access to client accounts without plan sponsor oversight and approval. Fidelity did not name any firms directly, but Pontera and Future Capital are two of the most prominent players in offering financial advisers a way to incorporate client 401(k) management.

At the time, Pontera responded to the Fidelity announcement by saying its services are safe and secure.

Data & Research January 7, 2025

Pension Income Accounted for $1.5T of US Economic Output in 2022

Private and public sector defined benefit pension fund payments also added $224.3 billion in tax revenue, according to the National Institute on Retirement Security.

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More than $680 billion in pension benefits were paid to 26.3 million beneficiaries in 2022, according to new research from the National Institute on Retirement Security’s “Pensionomics 2025” report, which quantified the economic impact of defined benefit pension expenditures.

“Virtually every state and local economy across the country benefits from the spending of pension checks,” wrote the report’s authors, NRIS Executive Director Dan Doonan and Ilana Boivie, an assistant director of strategic resources for the International Association of Machinists and Aerospace Workers. “For example, when a retired nurse residing in the state of Wisconsin receives a pension benefit payment, s/he spends the pension check on goods and services in the local community. S/he purchases food, clothing, and medicine at local stores, and may even make larger purchases like a car or laptop computer. These purchases, combined with those of other retirees with pensions, create a steady economic ripple effect.”

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The research found that of the $680.2 billion paid out to 26.3 million retirees, approximately $371.6 billion was paid out to 12 million retired state and local government employees and their beneficiaries. $91.5 billion was paid out to 2.7 million federal government beneficiaries. Approximately $217.4 billion was paid out to 11.5 million private sector retirees and their beneficiaries, which breaks down as $51.8 billion paid out to 4.1 million beneficiaries of multi-employer defined benefit plans and $165.6 billion paid out to 7.4 million beneficiaries of single-employer plans.

The paper noted that retirees with a defined benefit pension can rely on a steady income stream from their pension and steadily spend despite fluctuations in the market. On the other hand, retirees with a defined contribution retirement plan may be reluctant to spend from these accounts in a market downturn. Because of this, the NIRS noted that DB pensions and their contributions to the economy can be a stabilizing factor, similar to Social Security.

According to NIRS, every $1 paid out in defined benefit retirement income generated an output of $2.28 to the national economy.

“This multiplier incorporates the direct, indirect, and induced impacts of retiree spending, as it ripples through the U.S. economy,” the paper stated.

The paper stated that defined benefit retirement expenditures supported 7.1 million jobs in the U.S., which paid $466.2 billion in labor income, added $871 billion to gross domestic product, generated $224.3 billion in federal, state and local tax revenue, and produced $1.5 trillion in total economic output across the country.

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