Deals & People June 9, 2017

Retirement Industry People Moves

Pavilion Advisory expands consultant team; American Century Investments names head of ETFs; Deutsche AM expands equities portfolio management team; Lockton hires senior VP; Glenn Reed retires from Vanguard.
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Pavilion Advisory Expands Consultant Team

Pavilion Advisory Group has hired David Thompson as its new senior consultant.

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Prior to joining Pavilion, Thompson worked as a principal and senior investment consultant at Mercer Investment Consulting. He has also worked as a consultant to high-net-worth individuals at an independent registered investment advisory (RIA) firm. Thompson holds J.D., MBA and BSBA degrees from Saint Louis University and is a Chartered Financial Analyst (CFA) charterholder, as well as a member of the CFA Society of St. Louis. He has also earned the Chartered Alternative Investment Analyst (CAIA) designation and is a member of the CAIA Association.

“We are delighted to have David join the Pavilion team as we continue to grow and evolve our investment advisory services practice,” says Keith Mote, Pavilion president and managing director. “We’re committed to adding experienced talent to our team so that we continue to strengthen our offering of highly specialized advisory and discretionary solutions.”

NEXT: American Century Investments Names Head of ETFS

 

American Century Investments Names Head of ETFS

Edward Rosenberg has been named senior vice presidentand head of ETFs for American Century Investments. Rosenberg joins American Century from Northern Trust’s FlexShares business, where he served as senior vice president and head of ETF capital markets and analytics. Rosenberg’s addition comes in advance of American Century’s planned entry into the exchange-traded fund (ETF) marketplace, which is slated to happen early next year.

As head of ETFs, Rosenberg will be responsible for creating American Century’s new line of ETFs. Along with the firm’s investment teams, he will develop a suite of ETFs—including active ETFs—for investors. He will also be responsible for building relationships with market makers, authorized participants and exchanges.

Prior to joining FlexShares in 2012, Rosenberg was director and head of capital markets and analytics with Russell Investments, where he helped launch the majority of the firm’s current ETFs. Earlier in his career, he served in a variety of leadership positions at Vanguard, including ETF product manager. Rosenberg graduated from Muhlenberg College with a bachelor’s degree and master’s degree both in business administration from Pennsylvania State University.

“Our clients know and already appreciate the active management capabilities we will harness as we develop new ETF strategies,” says Peruvemba Satish, American Century senior vice president, portfolio manager and director of global analytics. “With the active ETF segment of the market still in the early stages of development, we’re confident American Century can be a very relevant player by providing the solutions our clients need now and in the future.”

NEXT: Deutsche AM Expands Equities Portfolio Management Team 

Deutsche AM Expands Equities Portfolio Management Team

Daniel Fletcher has joined Deutsche Asset Management (Deutsche AM) as director and portfolio manager focused on the technology, media and telecom (TMT) sector.

In addition, Julia Merz has recently joined the New York team from the Deutsche AM Frankfurt office. She will focus on the health care sector and international equities. The expansion of the team follows the hire of David Bianco earlier this year as the head of equitiesin the U.S. and chief investment strategist for the Americas.

“I am very pleased to welcome such talented portfolio managers to our team,” says Bianco. “Daniel and Julia bring specific industry expertise that complement the knowledge base of the existing U.S. equity portfolio management team. As we remain bullish on growth stocks, I am confident we have the right team to deliver the breadth and depth of the Deutsche Asset Management’s active assets to our clients.”

Fletcher moves to Deutsche AM with nearly 20 years of experience covering the TMT sector. Most recently, he served as a managing director on the Large Cap Disciplined Growth Fund at Neuberger Berman as a senior technology, media and telecom analyst. Fletcher had joined Lehman Brothers, which acquired Neuberger Berman, in 1995 as an associate research analyst.

Merz joined Deutsche AM in 2015 and has previously held teaching assistant positions at the University of Cologne and Goethe University in Frankfurt, Germany.

NEXT: Lockton Hires Senior VP

Lockton Hires Senior VP

Brett Moulton has been named senior vice president of Lockton and will work with the firm’s Los Angeles-based operations to advise corporate clients and private equity firms on optimizing their overall human capital strategy, including retirement plans and enterprise risk management.

Moulton is an expert in the design and implementation of human resources (HR) programs spanning health and welfare, retirement, talent management, employee communications and administration. He consults on financial structures, mergers and acquisitions, emerging benefit trends and employer best practices.

Moulton brings more than 19 years of experience in benefits consulting including 15 years at Mercer. Most recently, he served as a client relationship manager, partner and member of the Southern California leadership team in Mercer’s health and benefits business. He is a graduate of the University of Southern California (UCLA).

“Brett has a well-deserved reputation as a thought leader on human capital issues for complex organizations,” says Tim Noonan, president of Lockton’s Pacific operations. “Lockton clients will benefit from his leadership and insight on employee benefits.”

Lockton is a global professional services firm and is ranked as the world’s largest privately held insurance broker.

NEXT: Glenn Reed Retires From Vanguard

Glenn Reed Retires From Vanguard

Vanguard has announced the retirement of Glenn Reed,managing directorof the firm’sstrategy division, which is responsible for strategic planning, innovation initiatives and investment stewardship.

Reed spent more than 20 years serving Vanguard as outside counsel before joining the company in 2007 to oversee its finance division. Beforehand, he served as general counsel for a multi-line health and life insurance company. From 1978 to 1999, he was a partner at Gardner Carton & Douglas, a Chicago-based law firm. There, he specialized in corporate finance, mergers and acquisitions, and issues related to investment management.

“We thank Glenn for more than a decade of service to our clients and crew,” says Vanguard CEO Bill McNabb. “His long association with Vanguard and his experience were great assets in guiding the firm through the global financial crisis and the ensuing period of rapid growth and expansion. We wish him the best during his well-earned retirement.”

Reed will officially retire in late July, before his strategy and innovation responsibilities are assumed by Chris McIsaac,managing directorof the planning and development division. The investment stewardship group will report to Anne Robinson,managing director,legal and compliance.

Client Service June 9, 2017

PSNC 2017: Re-enrollment Helps Maximize Plan Performance

The concept of re-enrollment should be an exciting one from the perspective of plan sponsors—a strategy that adds another layer of control and sophistication to a defined contribution retirement plan.
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According to an expert panel speaking at the 2017 PLANSPONSOR National Conference, in Washington, D.C., the concept of re-enrollment should be an exciting one from the perspective of plan sponsors—a strategy that adds another layer of control and direction to a defined contribution (DC) retirement plan.

Panelist Bruce Ashton, partner, Drinker Biddle & Reath LLP, suggested that from the fiduciary perspective, plan sponsors have all the authority they need to enact a re-enrollment. It is really a natural extension of plan design features such as automatic enrollment, automatic escalation and automatic diversified qualified default investment alternatives (QDIAs) that were enshrined by the Pension Protection Act of 2006. 

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To this point, an audience member asked about laws in her state that seem to prohibit an employer from redirecting any portion of employees’ paychecks without their express written consent. She was concerned that re-enrollments, which employ a negative election opt-out feature, could bring her plan into legal conflict with that type of state-based standard.  

“That’s a great question, but remember, the Employee Retirement Income Security Act [ERISA] pre-empts state law,” Ashton observed. “So you do have the authority to do this, to sweep nonparticipants into your retirement plan.”

Kathleen Kelly, managing partner at Compass Financial Partners, wholeheartedly agreed and urged plan sponsors to consider the fact that auto-enrollment is widely appreciated as a powerful and important plan design feature that does a lot of good for new employees.

“Re-enrollment can do just as much good as auto-enroll and auto-escalate, say for older employees who are participating in the 401(k) but whose approach was not optimized by their being auto-enrolled,” she said. “I think about it this way: A 401(k) plan at rest tends to stay at rest. Re-enrollment is an all-important call to action, a wake-up call and an ability to bring a plan back to life. It forces the employees’ hand to make decisions in their best interest. Really, it can shine a spotlight on the under-championed 401(k) benefit.”

NEXT: Successful re-enrollments require vision

Panelist Terry Daugherty, vice president and relationship management consultant for American Century, stressed that the understanding of what re-enrollments can or should accomplish has shifted considerably.

“The meaning of re-enrollment has dramatically changed over the years. It used to be called retro-auto-enrollment by some parties,” he said. “In fact, when I first started in the industry these processes were all done on paper, and they were time-consuming. Today, things are quite different. Now we have very efficient technology-based re-enrollment efforts that can take on various and very specific goals. We see everything from very complex to very simple re-enrollments.”

The panelists noted one of the most common re-enrollment approaches involves a one-time sweep of nonparticipating employees into the retirement plan, exactly as if they had been auto-enrolled as new employees. Other re-enrollments are more targeted, perhaps identifying segments of older employees who have too much equity exposure and mapping them into an age-appropriate default investment. 

“This may seem like a dramatic thing to do—to override your employees’ own investment decisions—but remember they can always opt out and stick to their own strategy,” Kelly noted. “What we commonly see is that those who have actually carefully considered their strategy may tend to opt out, while others who have fallen by chance, more or less, into their current approach fully embrace the re-enrollment to the QDIA. It’s a win-win.”

On the frequency of re-enrollments, Ashton said some employers do this every year, perhaps tying it to the health care open enrollment period, while others might make plans to do just a single re-enrollment. The proper approach for a given plan “depends a lot on what’s happening in your company and how well your communication and enrollment process is working right now.” Obviously, if the sponsor has a fantastically performing plan, re-enrollment is not as critical and might not be needed at all. “But even in the highest-performing plans there are always some folks who can slip through the cracks, and so perhaps targeted re-enrollment can work in these situations,” he said.

Ultimately, the panelists concluded, re-enrollment should be viewed as a powerful tool in the expanding arsenal of plan sponsors to ensure their plans function at the highest level possible.

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