Deals & People July 13, 2012

Arnott Succeeds Hartstein as CEO of John Hancock Funds

 

John Hancock Funds announced Keith F. Hartstein’s retirement and Andrew G. Arnott as his replacement as president and chief executive.

 

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Arnott most recently was executive vice president of John Hancock Investment Management Services, which oversees all third-party and internal asset manager relationships across the John Hancock and Manulife investment platforms in the U.S. and Asia. Arnott worked closely with Hartstein on John Hancock’s mutual funds. The firm has a total of $170 billion under management in mutual funds, as well as annuities, college savings, retirement plans and insurance.

Arnott was also chief operating officer of John Hancock Funds, and has served in key executive positions in product management, development and marketing.

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Succeeding Arnott as head of John Hancock Investment Management Services is Leo Zerilli, vice president. Zerilli joined John Hancock in 1997 and has worked in investment management for the past 12 years, building the group’s product development, fund implementation process, board reporting and marketing functions.

Arnott holds a Master’s degree in finance from Northeastern University and a Bachelor’s degree in business from Boston University. He serves on the Global Steering and Close-End Fund Committees of the Investment Company Institute (ICI), as well as the Mount Mansfield Educational Foundation Scholarship Committee.

Zerilli earned an MBA, Magna cum laude, from Boston University and a Bachelor’s degree from Colgate University. He is a Certified Investment Management Analyst and a member of the Investment Management Consultants Association.

Hartstein announced his plans to retire from John Hancock in May. He has served as president of John Hancock Funds for the past seven years, has been actively involved with the ICI and the Mutual Fund Education Alliance, and has earned numerous awards throughout his career. He will step down in September.

 

Compliance July 13, 2012

A Reminder About Information Sharing Agreements

The Internal Revenue Service (IRS) has made it clear that it will look for information sharing between 403(b) plan sponsors and vendors with 2009 plan audits.
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And, the agency will confront directly vendors that have not agreed to information sharing, warned Linda Segal Blinn, vice president of technical services at ING, in a webcast sponsored by the National Institute of Pension Administrators.   

Segal Blinn explained that the IRS was very concerned about 403(b) participants not exceeding loan and distribution limits, so in the regulations passed in 2007, it required that vendors share information with plan sponsors. For example, when an employee requests a loan from a vendor, that vendor must check with the plan sponsor whether the employee has loans outstanding with other vendors that may cause him or her to exceed the IRS loan limit.  

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Information sharing rules, in addition to loans, applies to hardship withdrawals and when a participant severs employment. Segal Blinn says particularly in the educational arena, employees that retire are subsequently rehired. So, with distributions, plan sponsors and vendors want to make sure they are not distributing money to someone who no longer has a distributable event due to severance from employment.  

With regard to current vendors, Segal Blinn noted, the IRS has provided draft model language for information sharing agreements in Revenue Procedure 2007-71; plan sponsors must put terms of information sharing in the plan document. If the vendor is no longer an approved vendor for the plan, plan sponsors must still request information sharing and have a formal information sharing agreement document in place.  

The IRS also addresses orphan contracts – vendors who were deselected from 2005 to 2008. Plan sponsors must make a good faith effort to have information sharing (see “Ask the Experts – Information Sharing Agreements”). Segal Blinn says the best practice is to have a formal information sharing agreement in place, but sponsors must at least reach out to these vendors to make sure limits are not exceeded.  

She urges plan sponsor to document their efforts, because they will need documentation if their plan is audited.

 

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