Deals & People August 4, 2023

Retirement Industry People Moves

Ascensus expands NQDC sales team; The Standard promotes Angie Cuthill within individual annuities; Optima names Paul Fletcher head of its new asset and wealth business line; and more.

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Ascensus Institutional Solutions Expands NQDC Sales Team

Jody Passen.

Ascensus has expanded the sales team offering nonqualified deferred compensation plans and insurance distribution through Ascensus’ institutional solutions line of business.

Troy Testa.

Jody Passen, Troy Testa and David Tippets joined the team as insurance and nonqualified sales consultants to help advisers identify market opportunities and offer their clients NQDC plan solutions. They report to Clay Kennedy, vice president of insurance and nonqualified retirement plan sales, according to the firm.

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David Tippets.

“Relationships with our adviser partners are key to the success of Institutional Solutions and the team brings an abundance of adviser relationships who will benefit by expanding their practice to include NQDC and institutional life insurance offerings,” Kennedy said in a statement.

The firm’s institutional solutions division includes expertise gained from Ascensus’ merger with Newport and is aimed at expanding services to advisers, plan sponsors and financial institutions in the specialized fields of insurance funding and administration, nonqualified plan recordkeeping, fiduciary services and compensation consulting.

The Standard Promotes Angie Cuthill to 2nd VP of Individual Annuities

The Standard Insurance Co. has promoted Angie Cuthill to the position of second vice president of individual annuities operations.

Angie Cuthill.

In her new role, Cuthill will lead the growth strategy in individual annuities while ensuring technological alignment with the department’s systems support team, according to an announcement. The Standard’s individual annuities systems support team will join Cuthill’s division to maximize alignment and develop a technology roadmap.

Cuthill, who joined The Standard in 2006, was most recently senior director of individual annuities, during which she established an operations system, built partnerships with vendors and strengthened the team, according to the announcement. She held leadership roles in employee benefits before moving into annuities.

“Angie is a strong strategic leader who knows how to help develop her team for success,” Alan Assner, assistant vice president of Individual Annuities, said in a statement. “She has a gift for meeting the challenges of today while keeping an eye toward the future.”

Optima Partners Appoints Paul Fletcher Global Head of Asset, Wealth Management

Regulatory compliance and risk management firm Optima Partners has hired Paul Fletcher as a partner and global head of asset and wealth management, launching a new business line for the company.

Fletcher joins Optima Partners with 35 years of industry experience, including 25 years in compliance and 15 years as an in-house chief compliance officer at mostly mid-to-large organizations, according to an announcement.

Prior to joining Optima, Fletcher worked at LV Group, New Star, Gartmore and more recently led the asset management compliance division at Credit Suisse for 12 years, focusing on the EMEA region.

“We’re excited to bring Paul on board to spearhead our growth initiatives, especially in working with asset and wealth managers traditionally aligned with larger banking institutions and those accustomed to working with Big 4 consulting firms,” Jonathan Saxton, CEO of Optima Partners, said in a statement. “Paul’s appointment marks the launch of a new business line at Optima, opening up a myriad of opportunities for our team to work on strategic projects.”

Fletcher’s responsibilities will largely be project-based, including conducting thematic reviews, implementing regulatory changes, executing gap analysis projects and reviewing and building out compliance frameworks and target operating models, according to the announcement.

GW&K Investment Management Grows Institutional Team

Investment management firm GW&K Investment Management has brought on Christa Maxwell as vice president of institutional business development, based in San Antonio.

Christa Maxwell.

In the new role, Maxwell will be responsible for cultivating business opportunities with institutional clients in the western United States, expanding GW&K’s firm and product awareness with investment consultants, and managing and fostering strong client relationships, according to an announcement.

Maxwell will report to Michael Clare, a partner and director of institutional business development.

“Christa has a keen understanding of our investment strategies and how they can best serve the needs of institutional investors,” Clare said in a statement. “Her sharp business and financial acumen will allow us to develop and optimize western United States client relationships and allow us to continue to meet the demands of a highly competitive and dynamic investment environment.”

Prior to joining GW&K, Maxwell was head of business development and marketing for Acuitas Investments, where she oversaw sales and consultant relations. Before that, she was director of business development at Kennedy Capital Management and vice president of institutional sales and client service at Westwood Holdings Group. She began her investment career at Thornburg Investment Management.

Northern Trust Promotes Bob Parise to Head of North America Institutional Unit

Bob Parise.

Northern Trust Asset Management promoted Bob Parise to head of North America in its global institutional client group.

Parise is responsible for leading the Northern Trust Asset Management institutional sales division, providing oversight of institutional client-facing and new business development within North America, according to a spokesperson.

Parise reports to John Abunassar, head of NTAM’s global institutional client group.

Parise’s previous role was as the practice leader for public retirement funds and Taft-Hartley plan business segments.

Parise has worked in the retirement investing industry with retirement plans for more than 30 years, beginning in 1997. He started as a 401(k) wholesaler at Banc One Investment Advisors and worked at J.P. Morgan Asset Management, in two roles, for 12 years.

 

Compliance August 3, 2023

PBGC Reports Program Solvency and Surplus

Industry experts seek scaling back of premiums as the pension insurance agency expects to remain solvent long into the future.

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The Pension Benefit Guaranty Corporation published its Projections Report for Fiscal Year 2022 Wednesday, showing both the single and multiemployer plan programs in strong financial positions and expected to remain solvent through their projection periods.

The PBGC said that “the projections show no scenarios in which the Single-Employer Program runs out of money within the next 10 years,” The net financial position of this program is also expected to improve over the next ten years largely due to improved plan funding which reduce PBGC’s expected liabilities.

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The PBGC expects the single-employer program to have net assets of $63.6 billion in 2033, an improvement on the $53.3 billion it projected for 2032 last year. The single-employer program has 22.3 million participants.

The PBGC reported similarly rosy results for the multiemployer program. The corporation said that the median projected insolvency date for the multiemployer program was 2062, which was the end of the projection period. Prior to the Special Financial Assistance Program included in the American Rescue Plan Act, the projected insolvency date was 2026. The multiemployer program covers 11.2 million participants.

The report also stated that the PBGC expects $79.7 billion to be paid out in total under the SFA program. The estimate is based on the amount already paid out, pending applications, and potentially eligible plans that may apply in the future.

The strong financial status of the two programs drew industry comment concerning the insurance premium rates paid by pensions to the PBGC. A statement from the ERISA Industry Committee said the surplus “should cause Congress to reexamine the premiums paid by companies that sponsor defined benefit pension plans.”

The statement from ERIC also recommends decoupling PBGC funding from general federal budget scoring, which can create perverse incentives that allow the PBGC to go overfunded to “offset” other spending priorities, including those “unrelated to the retirement system.”

John Lowell, a partner at October Three, an actuarial consulting firm, says that “every plausible projection shows that the fund will remain significantly overfunded for the foreseeable future.” Congress should take this opportunity to reduce premium rates, which he says “cause plan sponsors to either terminate their plans or to de-risk through pension risk transfer or lump sum windows.”

Lowell adds that the difference in median and mean projections in the report for multiemployer plans suggests that some projections likely anticipate the insolvency of a small number of large plans and that Congress should assist the PBGC to prepare for this possibility.

Section 349 of SECURE 2.0 capped the premium variable rate for the underfunded portion of single-employer plans at 5.2% of the plan’s unfunded liabilities. The rate had previously been tied to inflation.

All other items that are used to calculate PBGC premiums, however, remain tied to inflation. That includes the amount paid per participant ($96 for single-employer and $35 for multiemployer for 2023) as well as the cap per participant paid on a plan’s unfunded liabilities ($652).

Lowell recommends that Congress “eliminate the annual inflationary increases” and “reduce fixed rate premiums and the percentage of underfunding subject to variable rate premiums.”

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