The
enhanced fiduciary adviser status provides greater investment fiduciary
protection for plan sponsors.
The
new service, enabled under the Employee Retirement Income Security Act (ERISA)
Section 3(38), allows plan sponsors to delegate the burden of managing
retirement investments and hiring, as well as monitoring and replacing,
investment managers. The firm offers independent and unbiased advice.
“This
new offering appeals to retirement plan sponsors and their committee members
who want to make prudent choices for their retirement plans and those who seek
a professional to manage and monitor the investments offered to their plans’
participants,” said Jay Mullins, president, SHDR-IA.
Stanley,
Hunt, DuPree & Rhine is an employee benefits consulting firm and a division
of BB&T.
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The
Hartford decided to focus on its property and casualty, group benefits and
mutual funds businesses, each of which has a competitive market position,
strong capital generating ability and lower sensitivity to capital markets. As
a result, the company is placing its Individual Annuity business into runoff
and is pursuing sales or other strategic alternatives for Individual Life,
Woodbury Financial Services and Retirement Plans.
“This
work began in mid-2011 as part of strategy discussions. In our work we consider
a broad range of factors, market dynamics, returns, capital markets
sensitivity, competitive positions and The Hartford’s capital requirements,”
said Liam E. McGee, chairman, president and CEO of The Hartford, during a press
call. “The objective was to find the right path to deliver superior performance
and greater shareholder value.”
According
to a timeline provided by the company, The Hartford will conduct the sales
process for Individual Life, Woodbury Financial Services and Retirement Plans
during the next six months, and plans to close transactions within 12 months.
During the six-month sales process, the company will continue to write new
business. Individual annuity will be closed to new sales effective April
27.
Proceeds
from any transactions will give The Hartford additional financial flexibility,
providing opportunities to deleverage, de-risk the legacy annuity blocks,
invest in the business and potentially take other capital management actions.
Christopher
J. Swift, executive vice president and CFO of The Hartford, commented during the
press call: “This decision to sell these businesses was very difficult. These are
strong successful businesses, and we will pursue the best outcome for all
stakeholders. We are at work with our investment bankers and it will take a
number of months to make a definitive agreement.”
The
Hartford’s Retirement Plans business has $52.3 billion in assets under
management. It offers 401(k), 403(b) and 457 products. In 2011, it had $766
million in revenues. The Individual Life group has $12.4 billion of reserves
separate account liabilities and had $1.4 billion in revenues in 2011.
Woodbury
Financial Services has 1,400 brokers and is the 12th largest
independent broker dealer in the nation. It had $250 million in 2011 revenues.
In
2012, the company expects 68% of earnings to come from the Property & Casualty
Commercial market, 15% from Consumer Markets, 10% from Group Benefits and 7%
from its Mutual Funds business.
“The
Hartford’s sharper focus will lead to an organization that, over time, will be
positioned for higher returns on equity, reduced sensitivity to capital
markets, a lower cost of capital and increased financial flexibility,” said
McGee. “With this portfolio and the actions we are taking, we are on the right
path to unlock value and deliver superior, long-term returns for shareholders.”