Products May 12, 2016

Investment Product and Service Launches

Guardian moves to expand investment flexibility with new options; Northern Trust enhances solution for fair value leveling through collaboration with Interactive Data; Nuveen Asset Management introduces pension liability matching indexes with Wilshire. 
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Guardian Expands Investment Flexibility with New Options

The Guardian Insurance & Annuity Company this week revealed 21 new investment options being added to The Guardian Choice lineup of retirement products, alongside an additional 26 options for The Guardian Advantage lineup.

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According to the firm, the significant rollout of new investment options “increase the breadth of asset classes available for plan sponsors utilizing these products to fund their qualified retirement plans.” The additions include the American Funds Target Date Retirement Series, and offerings from other fund families including American Century and T. Rowe Price.

In the alternatives market segment, Guardian is adding exposure to natural resources, utilities and sector funds from Dreyfus and Franklin Templeton. According to Guardian, these new offerings increase the total number of funds available in The Guardian Choice to 150 and in The Guardian Advantage to 129.

Douglas Dubitsky, vice president of product management at Guardian, says the firm will continue its push into new retirement funding vehicles that “allow plan sponsors to select from a diverse and flexible investment line-up suited to meet the needs of their plan participants.”

For more information, visit 401k.GuardianLife.com.  

NEXT: Northern Trust Partners to Boost Fixed-Income Transparency  

Northern Trust Collaborates with Interactive Data

Northern Trust announced a new collaboration with Interactive Data (IDC) to enhance its support for fair value level determination for fixed-income securities. 

The firm explains the collaboration will help clients “satisfy fair value disclosure requirements prescribed within IFRS 13, FASB ASC 820, GASB 72, UK FRS 102, and other accounting guidance."

Through the use of Interactive Data’s Vantage program, a web application that provides in-depth market information and sophisticated workflow tools, Northern Trust says it can now “deliver improved transparency to evaluated prices for most fixed-income assets.”

In addition to improving data transparency, Northern Trust says it is “working to provide information that makes it easier for clients to manage the asset leveling process and reduce associated costs.” Presented as the Fair Value Toolkit, Northern Trust services under the collaboration can offer suggested fair value levels, detailed pricing inputs, flexibility in assigning fair value levels, and options for categorizing assets in accordance with financial statement presentations.  

Clients with complex portfolios will benefit from fully outsourced support through Northern Trust’s Valuation Support Services, the firm explains.

“With IDC’s Vantage, Northern Trust’s clients receive access to more than 40 fixed-income valuation inputs … including bid/ask prices, bid spread, comparable bond inputs, trading volumes, use of single-broker quotes, a market depth indicator that provides insight into the amount of data available for an asset, and points of market color per issue and issuer,” the firm explains. “In addition, Northern Trust staff helps establish client-specific fair value leveling criteria; identify market inactivity and other factors that impact fair value levels; streamline testing performed by auditors; and coordinate pricing vendor inquiries.”

More information is available at www.northerntrust.com.

NEXT: New Indexes Support Pension Liability Matching 

Nuveen Asset Management Introduces DC Liability Matching Indexes

Nuveen Asset Management, an investment affiliate of TIAA Global Asset Management, launched four new indexes “powered by Wilshire” that are designed to effectively match corporate pension liabilities.

The four indexes, Nuveen Wilshire Intermediate (5-10) Corporate Bond, Nuveen Wilshire Long (10-20) Corporate Bond, Nuveen Wilshire Long (20-30) Corporate Bond and the Nuveen Wilshire Ultra Long (20+) STRIPS, have each been “designed with pension liability-matching in mind, but also for simplicity and cost-effectiveness.” Combined, they seek to provide performance benchmarking, economic liability measurement and an effective investment de-risking solution.

David Wilson, managing director and head of institutional solutions for Nuveen Asset Management, says the indexes were produced to “meet the clear need for a simpler and more effective de-risking solution.”

“We are pleased to align with the Wilshire Analytics’ index team to offer this family of customized indexes as their reputation as leaders in the indexing space complements our own expertise in crafting successful pension solutions,” he adds. “We worked closely to develop these customized tools, which we believe will enable plan sponsors of all sizes to effectively match their liabilities while enhancing yield potential.”

Wilson says the investment solutions associated with the indexes “should allow customized allocations that closely match both the overall and partial durations of any traditional corporate defined benefit pension liability without the need for derivatives. Furthermore, splitting up the long end of the corporate bond universe into two components helps to increase the yield of the de-risking solution.”

Returns for the indexes can be tracked here. 

Products May 12, 2016

SPARK Plans Data Security Certification for Recordkeepers

“I think having the certification will be a requirement in RFP searches. It will streamline our RFP process,” says Mike Volo, senior partner at Cammack Retirement Group.
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The SPARK Institute has unveiled its plan to establish uniform data-management standards for the defined contribution (DC) retirement plan market through its newly created Data Security Oversight Board.

Mike Volo, senior partner at Cammack Retirement Group in Wellesley, Massachusetts, who will participate in the board, tells PLANSPONSOR, “I believe data security is a bigger challenge now. Heightened security threats are seen in the media every day, and technology is evolving so quickly and is sophisticated and complex. It is difficult for recordkeepers and advisers vetting recordkeepers to keep up with the newest threats.”

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Tim Rouse, executive director of the SPARK Institute in Simsbury, Connecticut, adds, “There is a proliferation of modems for getting into data; even phones are a new source.”

SPARK’s Data Security Oversight Board will collaborate to establish uniform criteria for recordkeepers aimed at providing a baseline level of security across the retirement industry. Common Criteria Certification, as it is known, ensures that services purchased by organizations perform and are secure at the desired level of performance, the Institute says. It has emerged as a standard by which all industries can evaluate the security of IT and data systems.

Rouse says the concept for the board came about because recordkeeper members of SPARK have very intense cyber security protection, and the consultant community has a duty to make sure plan sponsors know the depth to which participant data is being protected. But, recordkeepers don’t want to constantly explain their data protection strategies because that itself becomes a data security weakness.

NEXT: Certifications will be a win for all

The board will bring together recordkeepers and consultants to establish standards, and recordkeepers will be certified if they are adhering to those standards. If recordkeepers are asked in requests for proposals (RFPs) about data protection, they can just respond that they have the certification, Rouse says. He notes that the Common Certification Criteria will not be published to keep cyber security criminals from knowing data security strategies, but the board will publish a list of recordkeepers that have the certification.

“We are experts in retirement plans and investments, not in data security,” says Volo. “I think with this Common Certification Criteria, as we do RFP searches, having the certification will be a requirement. It will streamline our RFP process.”

The first Data Security Board meeting will take place on June 21 in Washington D.C., to coincide with SPARK’s National Conference. Board participation will be open to all industry members and plan sponsor consultants. Rouse says he can’t predict when the board will finalize the standards.

But, he notes, “This is expected to be a living breathing certification. The board will update criteria and recertify recordkeepers annually to keep the industry fully up to date on cyber security threats.”

Volo concludes, “This will be a win, win, win, win. It will be a benefit for recordkeepers that meet the criteria, it will make advisers’ jobs easier, it will help plan sponsors better fulfill fiduciary responsibilities to participants and participants will know their data is secure.”

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