Retirement Industry People Moves – 7/12/24

Cambridge Investment Research hires Robertson as senior director of retirement plans; FinServ adds Treichel, Rhoiney to board; Voya brings Mullaney onto board of directors; and more.

Cambridge Investment Research Hires Sr. Director of Retirement Plans

Bill Robertson

Cambridge Investment Research has hired Bill Robertson as senior director of retirement plans, a firm spokesperson confirmed. Robertson reports to Jeff Wick, vice president of client solutions.

“Bill has guided financial professionals through various retirement plan topics, contributing to the estimated sale/service of over 1,500 qualified retirement plans,” said the spokesperson. “At Cambridge, he will be a key asset to the client solutions team, supporting financial professionals as they grow and enhance client portfolios with qualified company retirement plans.”

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Prior to joining Cambridge, Robertson was a regional sales consultant at Definiti LLC.

FinServ Welcomes 2 Board Members

David Rhoiney

Bonnie Treichel

The FinServ Foundation, a nonprofit organization that specializes in providing coaching, mentorship and scholarships to empower individuals entering the financial services field, has named Bonnie Treichel and David Rhoiney to its board of directors.

“FinServ Foundation is thrilled to welcome Bonnie and David to our esteemed board,” said Jamie Hopkins, FinServ’s president, in a press release.

Voya Welcomes New Board of Directors Member

William Mullaney

Voya Financial announced William Mullaney was elected to serve on its board of directors.

Mullaney will serve on Voya’s audit, technology, innovation and operations committee and the nominating, governance and social responsibility committee, according to the announcement.

“I am delighted to welcome Bill to our board of directors,” said Voya Financial CEO Heather Lavallee in a statement. “Bill brings extensive experience from across our industry, where he has distinguished himself as a leader of innovative business and customer solutions.”

Mullaney has nearly 40 years of experience across the retirement, life, annuities and insurance industries.  He was mostly recently a managing director in Deloitte Consulting’s insurance practice, advising on a range of business, insurance and retirement topics. Previously, he was president of MetLife Inc.’s U.S. business.

Regulatory Compliance Consultancy Specialist Expands Services  

Jamie Schlag

Essential Edge Compliance Outsourcing Services announced it has named Jamie Schlag a director. The Santa Fe, New Mexico-based firm provides third-party compliance services for broker/dealers and registered investment advisers.

Schlag is responsible for managing relationships with clients and evaluating business compliance programs, according to a company press release She is also responsible for reviewing clients’ regulatory content and providing them with training and oversight recommendations, according to the announcement.

Schlag reports to Sander Ressler, co-owner and managing director of Essential Edge Compliance Outsourcing Services.

First Eagle Investments Names Senior Director

First Eagle Investment Management LLC has hired Elizabeth Yan as a senior director in consultant relations, covering the Eastern and Midwest regions.

Yan, who started on July 8, is responsible for coordinating relationships with consultants across First Eagle, representing the firm’s equity and credit strategies and collaborating with business development professionals within the First Eagle institutional platform, including First Eagle Alternative Credit and Napier Park, according to the announcement.

Yan reports to Allison Shaw, head of U.S. institutional relationships and global consultant relations.

Prior to joining Fist Eagle, Yan was a managing director and senior consultant relations executive at the TCW Group.

Vanguard Group Head of Europe Hagerty to Retire

Sean Hagerty

Head of Vanguard Europe Sean Hagerty announced in a LinkedIn post he will retire from the Vanguard Group Inc., effective December 31, 2024, a Vanguard spokesperson confirmed.   

“I am retiring from Vanguard, but not retiring from my career,” Hagerty wrote in the post. “I look forward to continuing to make an impact in new and challenging endeavors.”

In April, Vanguard named Jonathan Cleborne to replace Hagerty in a press release distributed in Europe, confirms a Vanguard spokesperson. The press release did not specify when Hagerty would leave Vanguard, but did state he would continue in the role as head of Europe until June, when Cleborne “will assume the role and move to the U.K.”

Hagerty was named to lead the European business in 2016.   

Under Hagerty’s leadership, Vanguard’s European business grew to nearly $360 billion in assets under management as at the end of March 2024, according to the release.

Prior to taking the role, Cleborne served as head of Vanguard’s personal investor advice service in the U.S., leading direct-to-consumer investment advisory and financial planning.

He reports to Chris McIsaac, managing director and head of Vanguard’s international division.

Manulife Names Head of Insurance at John Hancock

Manulife Financial Corp. named Oscar Martinez head of insurance at John Hancock, a unit of Manulife.

“When it came to finding a new leader for our insurance business, it was essential that the person have the right combination of industry experience and acumen alongside a proven track record of innovation,” said Brooks Tingle, John Hancock president and CEO, in the announcement.

Martinez reports to Tingle and serves on John Hancock’s U.S. leadership team, as well as Manulife’s global leadership team.

Martinez joined John Hancock from Equitable, where he led the company’s individual life insurance business, including new business development, underwriting and life insurance product development and distribution.

June Pension Funding Ratios Soar With Interest Rate, Equity Gains

Another robust month for pension funding status puts an ‘exclamation point’ on a strong streak even as the Fed considers an interest rate cut.

The overall improvement in pension funding ratios across multiple indices and reports highlights the June continuation of a positive trend for U.S. corporate defined benefit pension plans, with results driven by strong market performance, favorable economic indicators and, for the moment, high interest rates.

June was less of a standout for a year of strong funded status for DB plans than a reminder to take advantage of the current run of strength, while having an “appreciation for what might happen” when rates drop, says Scott Jarboe, U.S. defined benefit segment leader of Mercer’s wealth leadership team.

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“This month is not different from many of the previous months,” he says. “But we have hit another high watermark, so it’s just an exclamation point behind ‘pay attention to that risk and make sure that you understand the downside.’”

Mercer reported that the estimated aggregate funding level of pension plans sponsored by S&P 500 companies rose by 1% in June 2024 to 109%. The domestic equity market’s increase partially offset the decrease in discount rates. By June 30, the estimated aggregate surplus of $136 billion had risen by $17 billion from the previous month.

On Thursday, the Consumer Price Index released its results from June, falling .01% from May and helping to slow the annual rate of inflation to 3% from 3.3% in May, according to the Bureau of Labor Statistics. That drop may provide further fodder for a Federal Reserve pondering an interest rate drop in coming months, depending on economic factors that also include the labor market.

Mercer’s Jarboe says there have been many periods in the past when funded statuses have been elevated, only to be followed by rate environment changes that lead to relatively rapid declines. Sponsors and advisers should ensure clients have opportunistically taken that risk off at the table, as funded status is now in a “good place,” he notes.

Healthy DB Plans

In line with Mercer’s findings, LGIM America’s Pension Solutions Monitor reported that the health of a typical U.S. corporate defined benefit pension plan saw improvements throughout June. The average funding ratio increased to 109.9% from 108.8%, driven by favorable market conditions.

October Three Consulting also reported a positive end to June, as both model plans tracked by the firm experienced gains. Plan A improved by nearly 1% in June, ending the first half of the year up by more than 8%. Plan B also saw a gain of nearly 1% for June and is now up by 2% year-to-date.

Wilshire estimated an increase in the aggregate funded ratio for U.S. corporate pension plans by 1.1 percentage points in June, ending the month at 102.3%. This improvement was driven by a 1.0% increase in asset value without significant changes in liability value.

Despite a 1.1 percentage point decrease over the past 12 months, the funded ratio has increased by 6.5 percentage points year-to-date and 2.6 percentage points in the second quarter, according to the firm. Wilshire’s FT Wilshire 5000 IndexSM returned more than 3% in June and more than 13% in the first half of 2024.

Goldman Sachs estimated the end of June’s funding ratio at 107%. Mike Moran, a senior pension strategist at Goldman Sachs Asset Management, attributed the improvement to continued strength in equity markets and higher yields year-to-date, propelling corporate DB funded levels to their highest points since before the global financial crisis.

Equities Bolster Lower Yields

Equity markets experienced robust performances during the month, with global equities rising by 2.3% and the S&P 500 by 3.6%, according to LGIM. Despite a 17-basis-point decline in plan discount rates, largely due to lower Treasury yields, plan assets with a traditional “50/50” asset allocation increased by 1.7%, while liabilities rose by 0.6%. This dynamic resulted in an overall increase in funding ratios by the end of June, the firm noted.

Agilis also observed a decline in Treasury yields across the curve in June, which led to a slight decrease in pension discount rates. Strong performance in both equity and fixed-income securities resulted in a minimal increase in pension liabilities, ranging from 0.5% to 1.5%, depending on plan characteristics.

Contributing to this positive performance, according to Agilis, was the stability of the U.S. labor market, the stabilization of inflation and optimism in the technology and communication sectors, particularly driven by advancements in artificial intelligence.

The WTW Pension Index also continued its upward trend in June, reaching its highest level since late 2000. Positive investment returns were partially offset by increased liabilities due to decreased discount rates, leading to a 0.5% rise over the month, bringing the index level to 117.0.

Finally, Milliman’s latest Pension Funding Index reported a stable funded status in June, maintaining a $46 billion surplus while the funded ratio slightly increased to 103.7%. A decrease in discount rates by seven basis points led to a $9 billion rise in pension liabilities, counterbalanced by a $9 billion increase in the market value of plan assets due to a 1.22% investment return in June.

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