Deals & People April 22, 2022

Retirement Industry People Moves

OneDigital hires chief information officer; the CFP Board appoints new chief financial officer; Alight hires wealth consultant relations director; and more.

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Art by Subin YangArt by Subin Yang

OneDigital Hires Chief Information Officer

OneDigital, an insurance brokerage, financial services and HR consulting firm, has announced the hiring of Marcia Calleja-Matsko as chief information officer. Calleja-Matsko steps into her role as OneDigital continues to scale its teams, products and IT infrastructure.

In this role, Calleja-Matsko will focus on the continued evolution of the firm’s technology platform to help the business achieve its objectives at pace and scale.

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Calleja-Matsko is a seasoned IT executive with over 30 years of global IT experience and a background in building strong business relationships and executing complex technology and process solutions. Most recently, she was CIO and vice president at Avanos Medical, where she was responsible for all IT functions worldwide, including strategic planning and execution of their global technology services. Prior to her time at Avanos, Calleja-Matsko served as the global director for IT data center demand and business management for SITA. In addition to her role at OneDigital, Calleja-Matsko is passionate about preparing young women and single mothers for STEM careers, and she serves on the board and as a mentor at Women in Technology. She also holds a vice chair position at GeorgiaCIO.

CFP Board Appoints New Chief Financial Officer

The Certified Financial Planner Board of Standards, Inc. has announced Kevin Yea as its new chief financial Officer, effective May 2. He succeeds Roger Myers, CPA, who will be retiring after more than 10 years of service overseeing the CFP Board’s finance, information technology, office operations and marketing functions.

“We thank Roger for the significant contributions he made to CFP Board’s growth during his tenure and wish him the very best in this next phase of his life,” says CFP board CEO Kevin R. Keller. “Kevin [Yea] comes to CFP board with significant experience in the financial planning profession, having worked alongside CFP professionals during his time as a private investment manager and as CFO at a nationally recognized investment advisory firm.”

Yea will be based in the CFP board’s Washington, D.C., headquarters, where he will lead all financial activities of the CFP Board, including finance, accounting, budgeting, enterprise risk management, information technology and office administration and facilities. In this position, Yea will serve as a partner to the CEO and the board of directors and be responsible for collaborating with other members of the executive leadership team to execute the organization’s priorities and generate revenue growth. He will report directly to Kevin R. Keller.

Yea joins the CFP Board from Ashoka, where he served as CFO and treasurer. Prior to Ashoka, Yea was an adviser and CFO at Keel Point, an SEC-registered investment advisory and financial planning firm. Before making the switch to wealth management, he worked in the assurance and advisory practice at PricewaterhouseCoopers LLP, where he provided auditing services for public and private companies. He also co-founded Pencil Joy, an illustration company meant to inspire people to share moments through art and stories.

Yea holds a Bachelor of Science in accounting from Brigham Young University.

Alight Hires Wealth Consultant Relations Director

Alight Solutions, a cloud-based provider of integrated digital human capital and business solutions, announced that Kristan “Stan” Boyle has been named wealth consultant relations director. Boyle will work with national and regional consulting firms to develop new investment consulting relationships that drive revenue for Alight in the defined contribution and defined benefit space. She will report to Alison Borland, Alight executive vice president, wealth and wellbeing solutions.

Boyle joins Alight from Prudential Financial, where she served in various roles for over 20 years. Most recently she was vice president of national consultant relations, where she was responsible for developing and growing Prudential Retirement’s consultant relationships nationally.

Boyle is an avid mentor who developed and inspired talent during her time at Prudential Financial. She is an alumna of Barat College of DePaul University in Lake Forest, Illinois, a passionate supporter of Girls Rising, a member of Open Heart Magic Marathon’s fundraising team and an advocate of the Leukemia and Lymphoma Society and the Make-A-Wish Foundation.

EBRI Announces Appointments to Retirement Security Research Center

The Employee Benefit Research Institute’s Retirement Security Research Center has announced the appointment of Naomi Fink as chairperson and Kelly Hahn as vice-chairperson of the think tank known for data-driven analyses of the current state of retirement planning and spending.

Fink is a retirement economist at Capital Group focusing on institutional retirement. She has 24 years of financial industry experience and has been with Capital Group for five years, during which she has conducted research on retirement-related topics including savings, investment, income, demographics and health. Before joining Capital Group, Fink founded Europacifica Consulting, a global economics and strategy consulting firm. She holds an M.S. in specialized economic analysis (macroeconomic policy and financial markets) from Barcelona GSE, an M.A. from the University of St. Andrews and was nominated to the Japan Society of Monetary Economics in 2014.

Hahn has been a financial and investment industry executive for over 20 years. She is executive director at J.P. Morgan Asset Management, where she works as a defined contribution strategist. In this role, Hahn is responsible for developing and delivering retirement insights into defined contribution plans to improve retirement outcomes. Previously, Hahn worked in investment banking at Goldman Sachs. She earned a B.S. in mechanical engineering from University of Illinois at Urbana-Champaign and an MBA from Columbia Business School.

NISA Investment Advisors Names New Investment Strategies and Client Solutions Director

NISA Investment Advisors, LLC, an independent manager of institutional assets, has announced that Tony Gould, CFA, and a CAIA Charter holder, has joined the firm as director, investment strategies—client solutions. In this new position, Gould will partner across the organization to champion product development and client engagement initiatives to support NISA’s future growth. Gould has been with AQR Capital Management as a managing director for almost six years.

Before his tenure with AQR Capital Management, Gould was a managing director, head, global pension solutions and advisory with J.P. Morgan Asset Management for nearly five years. Prior to that, he was a managing director with Barclays Capital. He has also held senior-level positions with Lehman Brothers and Franklin Templeton Investments.

Tony holds a U.S. patent for a proprietary method of replicating a bond index via derivative instruments. He earned a Bachelor of Economics from the London School of Economics and Political Science.

Transamerica Appoints New President of Workplace Solutions  

Transamerica announced the appointment of Phil Eckman as president of its workplace solutions division and member of the Transamerica management board, effective June 1. Eckman is an accomplished, 25-year veteran of Transamerica who currently serves as chief operating officer for workplace solutions. After 36 years of outstanding leadership, Kent Callahan, the current CEO of workplace solutions, will assume the role of vice chairman of Workplace Solutions to support Eckman’s transition and drive core strategic initiatives until the end of 2022, when Callahan will retire. Both Eckman and Callahan will report to Will Fuller, president and CEO of Transamerica.

Callahan joined Transamerica in 1986. He has held several leadership positions dedicated to the U.S. and global retirement industry, including president and CEO of Transamerica Latin America, U.S. mutual funds and stable value solutions; president of investments and retirement; and president of employer solutions and pensions. In May 2020, he was appointed CEO of workplace solutions. He also played an instrumental role in Transamerica’s acquisitions of Mercer’s U.S. defined contribution business in 2015 and TAG Resources, LLC in 2022.

As president of Transamerica’s workplace solutions division, Eckman will lead the next phase of expansion, continuing its growth strategy in employer-sponsored retirement plans, employee benefits, stable value solutions, individual retirement accounts and the advice center.

Eckman’s experience includes many executive leadership roles at Transamerica, involving managing distribution, directing operations and innovating to build new lines of business. As COO for workplace solutions, he fostered a customer-centric culture, delivering year-over-year improvements to Transamerica’s services for financial professionals, employers and customers.

Eckman also serves as president of Transamerica Retirement Advisors, LLC, and on the board of Transamerica Investors Securities Corporation. He holds the Series 7, 63 and 24 securities registrations. Eckman earned a J.D. from William Mitchell College of Law and a B.A. in accounting from Gustavus Adolphus College.

Compliance April 21, 2022

Excessive Fee Lawsuit Will Proceed Against Xerox

The complaint alleged breach of fiduciary duty obligations and excessive fees for recordkeeping services.

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The breach of fiduciary duty lawsuit against Xerox Corporation’s 401(k) retirement plan fiduciaries will proceed after a District Court denied the defendants’ motion to dismiss the complaint.

Plaintiffs alleged in the complaint that the plan’s fiduciaries—Xerox Corporation, the Xerox Corporation Plan Administrator Committee and unnamed individuals—breached the plan’s fiduciary duties to participants, caused the plan to pay excessive recordkeeping fees to plan sponsor-affiliated entities and failed to monitor the administration of the plan.    

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The court order states that “plaintiffs have plausibly alleged that defendants breached the duty of prudence by retaining affiliated recordkeepers that charged excessive fees under circumstances that would have alerted a reasonably prudent fiduciary of the need to investigate further.”

Furthermore, it says, “plaintiffs have plausibly claimed that ‘an adequate investigation would have revealed to a reasonable prudent fiduciary’ that the retention of the affiliated recordkeepers was ‘improvident,’ such that ‘a prudent fiduciary in like circumstances would have acted differently.’”

A Xerox spokesperson declined to comment on the ongoing litigation.

According to the court order, other recordkeepers were available to provide comparable services for significantly lower fees during the time in question. “[S]uch recordkeepers in fact charged fees of $35 per participant to recordkeep for plans of roughly similar size to the Xerox Plan; and, given its size, the plan would have had a certain degree of bargaining power, but the plan did not attempt to leverage a competitive recordkeeping fee from the affiliated recordkeepers or a competitor,” the order states.

The plan had two recordkeepers from 2015 to 2021, according to the complaint. From 2015 to 2017, the plan’s recordkeeper was Xerox HR Benefits Services, a wholly owned subsidiary of the defendant— meaning all profits accrued by Xerox HR in the administration of the plan passed on to Xerox. In 2017, Xerox HR spun off into Conduent Human Resources Services, and the plan’s recordkeeping services were provided by Conduent from that point until 2021, when the plan hired an unaffiliated recordkeeper.

“Plaintiffs allege that Xerox ‘retained significant equity in Conduent,’ and that Conduent’s relatively small client portfolio rendered Xerox a significant client for Conduent,” says the order. Plaintiffs have alleged that the profits incurred by the two recordkeepers between 2015 and 2021 flowed to Xerox. 

The defendants’ motion for dismissal on an associated breach of duty of loyalty claim was also denied. According to the order, “a plan fiduciary’s duty of prudence incorporates an ongoing duty to monitor the prudence of investment options and recordkeeping fees, in order to be cost-conscious in administering their duties.”

“The survival of plaintiffs’ claim that defendants Xerox and [unnamed individuals] failed to monitor the committee’s administration of the plan will generally depend on the survival or failure of their claims that all defendants breached their duties of loyalty and prudence,” the order states.

The Xerox Corporation 401(k) plan comprised between 21,000 and 30,000 participants and $3.6 billion and $4.3 billion in assets from 2015 through 2019, according to the complaint. Plaintiffs have alleged that plans of this size should be able to negotiate lower recordkeeping fees because of their scale.

“[D]efendants breached their duty of loyalty by retaining affiliated recordkeepers for the purpose of providing benefits to defendants, at the expense of plan participants,” the order states. “Plaintiffs essentially allege that defendants imprudently hired affiliated recordkeepers for the disloyal purpose of benefiting themselves by way of the excessive recordkeeping fees. Such allegations plausibly state a claim for breach of the duty of loyalty.”

ERISA requires 401(k) retirement plan fiduciaries to operate employee benefit plans with loyalty and prudence and to always act in the best interests of participants. 

The plaintiffs’ complaint argued that under Xerox HR Benefit Services, plan recordkeeping costs more than doubled, from $54 per participant in 2013 to $136 in 2019, the last year for which data is available, despite recordkeeping costs in the market overall declining in that time.

Defendants contended that plaintiffs failed to state their claim for breach of fiduciary duty of loyalty or prudence. The motion to dismiss was heard by Judge Sarala V. Nagala in the United States District Court  for the District of Connecticut.

Discussing the legal standard for a claim to survive a motion to dismiss for failure to state a claim, the court order states that the complaint satisfied the threshold under Federal Rule of Civil Procedure 12(b)(6). The court found that the plaintiffs alleged more than mere affiliation between the plan sponsor and recordkeeper. 

“They allege that defendants’ retention of affiliated recordkeepers was the result of an imprudent decision-making process, which plausibly suggests that such decision was the result of a disloyal motivation,” the order states. 

Because the court tossed defendants’ argument that the plaintiffs failed to state a claim for breach of duty of loyalty and prudence, the failure to monitor count also survived.  

The order to deny defendants’ motion to dismiss the lawsuit, Carrogan v. Xerox Corp, et.al., can be viewed here.

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