Deals & People August 10, 2011

Security Benefit Names New CEO

Security Benefit Corporation announced that Michael Kiley will become Chief Executive Officer effective September 30, 2011.
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Kiley brings more than 25 years of executive experience in the insurance, mutual funds, and retirement savings industries. He succeeds Howard Fricke, who has been serving as interim President and Chief Executive Officer since February 2010 and previously served as Security Benefit President and Chief Executive Officer from 1988 to 2000 and Chairman from 1996 to 2006.  

Kiley currently serves as a Senior Managing Director for Guggenheim Partners. He originally joined Guggenheim in a consulting capacity to advise management on the acquisition of Security Benefit, which was completed on August 2, 2010. Kiley is currently and will remain on the Board of Directors of Security Benefit Corporation.  

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Prior to joining Guggenheim Partners, he served as President and CEO of Van Kampen Investments, a division of Morgan Stanley. During his tenure at Morgan Stanley he also served as President and CEO of Morgan Stanley Funds Distributors, head of the U.S. Intermediary Group and as a principal in the institutional asset management group. Prior to that, Kiley was President of the Travelers Portfolio Group, a division of Citigroup. He also held executive positions at AXA and Guardian Life.  

Security Benefit, a Guggenheim Partners Company, is a provider of retirement plan services nationwide, primarily in the education marketplace, and offers a variety of customized fixed and variable annuity products.
In Practice August 10, 2011

Demand for Custom TDFs Shifts DCIO Marketplace

Cerulli's upcoming report on the Defined Contribution Investment Only (DCIO) marketplace attributes the legacy of DCIO as a retail business on the fact that individual investors have largely driven decision-making in the business.
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However, as participant influence has diminished, DCIO is resembling more of an institutional marketplace. Cerulli says a catalyst for this shift was the introduction of target-date funds (TDFs).  

According to Cerulli, the DCIO opportunity is enhanced as providers explore more open-architecture solutions. One of these solutions will be the refinement and deconstruction of the TDF into the choice of a glidepath and the use of funds in the core lineup, which are monitored by the plan sponsor, to create a custom target-date fund, according to Kevin Chisholm, senior analyst and lead author of the report.  

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Even smaller plans, those below $500 million and especially those below $50 million, can potentially tap into this glidepath resource.  

While glidepaths provided by recordkeepers allow for open-architecture TDFs with funds from a plan’s core lineup, further enhancement is still needed, Cerulli contends. These solutions must allow a fund to be included in the target-date allocation, but not be offered as a standalone option in the plan’s core lineup. An enhancement of this type provides diversification within the TDF to match pre-packaged TDFs, but does not complicate the core lineup. It further increases the significance of a successful DCIO strategy as TDF assets flow through to funds chosen for the core lineup. 

Asset management firms need a flexible approach in this segment of the market, since many firms with diverse structures and philosophies advise the sponsors of these plans.

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