Deals & People July 12, 2011

Charles Schwab Adds to Executive Team

Charles Schwab Investment Management, Inc. (CSIM), the investment adviser to Schwab and Laudus Funds, has announced the appointments of Omar Aguilar, Brett Wander, and John Sturiale to the company's executive team.
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Aguilar, Wander, and Sturiale all report to CSIM President and CEO Marie A. Chandoha, who came to Schwab in September from BlackRock, where she was global head of fixed income (see “Schwab Investment Management Announces New CEO“). 

Aguilar joins CSIM as senior vice president and chief investment officer of equities and multi-asset strategies, responsible for the investment oversight of Schwab and Laudus equity funds as well as proprietary equity exchange-traded funds (ETFs). 

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Aguilar comes to CSIM from Financial Engines, where he was responsible for managing more than $40 billion in assets from leading retirement plan sponsors in the defined contribution market. Prior to Financial Engines, he joined ING Investment Management in 2004 as head of Quantitative Equity, then from Lehman Brothers, where he served as the head of Quantitative Research for their alternative investment management business.  He was previously a director of quantitative research and portfolio manager with Merrill Lynch Investment Management and Bankers Trust. He was a Fulbright Scholar at Duke University’s Institute of Statistics and Decisions Sciences, where he earned his M.S. and Ph.D. He earned a B.S. in actuarial sciences and a graduate degree in applied statistics from the Mexican Autonomous Institute of Technology. 

Wander will serve as senior vice president and chief investment officer of fixed income, overseeing all Schwab money market and fixed-income strategies. 

Wander joins CSIM from State Street Global Advisors, where he rebuilt the firm’s active fixed-income business and was responsible for $30 billion in fixed-income strategies including short duration, U.S. and global active, stable value, and ETFs, CSIM said. Previously, he was director of Alpha Strategies at Loomis Sayles, and held fixed-income leadership positions at State Street Research and at Payden and Rygel. Wander received his B.S. in System Science Engineering from UCLA, and an M.B.A from the University of Chicago. 

Vice president Sturiale is shifting roles to take on expanded responsibilities in CSIM, leading equity and fixed-income product management, including responsibility for the ETF capital markets and portfolio strategy functions; he will continue collective trust funds oversight. 

Sturiale has been with Schwab for 11 years and, during his tenure, has focused on building the firm’s collective trust fund lineup. He has more than 20 years of investment experience in the institutional investment setting, previously as a team leader and senior portfolio manager with National City Bank, and as an investment analyst and senior portfolio manager with Goodyear Tire & Rubber Co. Sturiale is a Certified Financial Planner; he received his bachelor’s degree in finance from the University of Akron and an M.B.A. from Ashland University. 

Data & Research July 12, 2011

Majority of Employers Plan to Reinstate Match

The results of the 12th Annual Transamerica Retirement Survey reveal employer confidence is rising and it appears to be translating into a renewed commitment to retirement benefits for the first time since the recession began.
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Although the percentage of employers offering matching contributions to their 401(k) or similar plan is consistent with last year’s survey (70% versus 69% the year prior), the survey found an encouraging sign that 51% of companies that recently decreased or suspended the match plan to reinstate it within the next two years. 

Most employers (85%) believe that a 401(k) or similar plan is important for attracting and retaining employees, and most (85%) believe their employees view these plans as an important benefit. 

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However, according to the survey results, plan sponsorship rates of 401(k) or similar plans are significantly higher for large companies (94%) than small companies (76%). Large companies (79%) also continue to be more likely than small companies (69%) to offer a matching contribution to their 401(k) or similar plan. 

Of those small companies that do not currently offer a 401(k) or similar plan, only 21% indicate they are likely to begin offering a plan the next two years. However, a larger percentage (34%) indicate they would be likely to consider joining a multiple-employer plan. Of companies that are not likely to offer a 401(k) plan in the next two years, the most common reasons are: difficult business conditions (47%), concerns about cost (43%), and perceived lack of employee interest (43%).  

Underscoring a significant change from the year prior, 59% of employers expect their company’s financial situation to improve over the next 12 months (up from 49%) and almost half of employers (48%) expect the economy to improve over the next 12 months (up from 45%). Based on the study, employers are generally reporting higher levels of employment, with over half (55%) hiring additional employees in the last twelve months. This positive trend is more prominent with large companies where 69% hired workers compared to 54% of small companies. Additionally, fewer companies implemented layoffs or downsized in the last twelve months – 33% compared to 48% last year.

Education and Advice 

The results of the 12th Annual Transamerica Retirement Survey reveal most employers (82%) feel their employees do not know as much as they should about retirement investing. Similarly, while there has been a gradual decline over the last three years in employers agreeing their employees could work until age 65 and still not save enough to meet their retirement needs, a full 70% of employers still agree (down from a high of 80% two years ago).  

According to the company, since the recession began, few employers (15%) indicate they or their retirement plan provider has implemented any programs to help employees get back on track with their retirement savings. Large companies have been much more likely (34%) than small companies (13%) to have implemented any such programs.  

Employers also have an opportunity to help employees transition into retirement. Among those employers who offer a 401(k) plan, 43% offer financial counseling and 19% offer pre-retirement seminars for employees who are transitioning into retirement. Large companies are more likely to offer both, with 53% of large companies offering counseling and 46% offering seminars. (In contrast, of those employers who do not offer a plan, 78% do “nothing” to help their employees).  

The results of the 12th Annual Transamerica Retirement Survey – conducted among a nationally representative sample of 743 U.S. employers by the non-profit Transamerica Center for Retirement Studies – are here.

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