Deals & People September 20, 2012

T. Rowe Price’s Cynthia Egan to Retire

Head of T. Rowe Price’s RPS, Cynthia Egan, will retire after 30 years in the industry; the firm also created a new division, U.S. Investment Services.
Reported by

Egan, who has served as head of Retirement Plan Services (RPS) for the past five years, will retire on December 31.

“Cynthia has made valuable contributions to our clients, the firm and the industry, and leaves behind a strong team that will keep us positioned for future success in the retirement business,” Edward C. Bernard, vice chairman of T. Rowe Price Group, said. “Under her leadership, T. Rowe Price has seen significant growth in the number of retirement plans and participants it serves, and has continued to deliver high client satisfaction and loyalty. She has also been a vocal advocate for strengthening the defined contribution plan as a pillar of the U.S. retirement system and for emphasizing retirement income as a key measure of participant success.”

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With Egan’s retirement, the firm will move forward with an alignment of distribution activities serving the needs of U.S. individual investors. T. Rowe price has formed U.S. Investment Services—a new division, led by Scott David—which will include the existing retirement plan services, U.S. third-party distribution and retail direct channels. In this role, David will provide senior leadership for RPS and will report to Bernard. As co-leaders of the RPS channel, Kevin Collins and Aimee DeCamillo will report to David.

Before joining the firm in 2011, David held several leadership roles at Fidelity Investments, most recently as president of its Institutional Retirement Services. Before this, he was president of U.S. Retirement Services for Deutsche Asset Management/Scudder Investments.

 

The Markets September 20, 2012

Participant Transfers to Fixed-Income Continue

Defined contribution plan participants transferred assets from equities into fixed-income investments again in August, according to the Aon Hewitt 401(k) Index.
Reported by

Overall, 74% of the days in August had transfer activities that favored fixed-income funds representing $277 million in total inflows or 0.2% of total assets. However, when company stock activity is excluded, total equity outflows amounts to just $122 million (0.1%) of participant balances.  

The Index suggests much participant uncertainty in August as daily transfer volumes remained very low compared with historical levels. On average, only 0.021% of balances transferred on a net daily basis, which is similar to the volume of transfers over the past three months. August had just one day of above-normal transfer level—identical with July. Another month of low transfer activity further diminished the trailing 12-month daily average, which dropped to 0.027%.  

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In net outflows, company stock funds lost $155 million (49%), small U.S. equity funds lost $93 million (29%), and mid-U.S. equity funds lost $23 million (7%) for the month.  

All fixed-income asset classes recorded net inflows in August. Similar to last month, bond funds received the most inflows with $327 million (41%), while GIC/stable value funds took in $80 million (25%) and money market funds received $49 million (16%). The lifestyle/pre-mixed asset class also had $38 million of inflows.  

Employee-only contributions showed a slight decline from 62.3% in equities to 62.1% at the end of August. Participants’ overall equity allocation increased by 0.4% to 59.5% at the end of August, due to the market gains among most equity asset classes.  

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