Deals & People August 6, 2021

Retirement Industry People Moves

LCG Associates promotes former investment analyst; Hub selects new financial adviser; Advisor group adds two professionals through Securities America; and more.

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Art by Subin Yang

LCG Associates Promotes Former Investment Analyst

LCG Associates Inc. has promoted Rachel E. Foss to consultant. She is based out of the Atlanta office. 

“Rachel’s promotion is the outcome of hard work, an eagerness to learn, a willingness to help out beyond her job description and great work with her client teams,” says Edward F. Johnson, president and chief executive officer.

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Foss has six years of industry experience and joined LCG in 2015. Her responsibilities include investment strategy development, manager due diligence, special research projects and providing investment advice to clients. Prior to her current role, Foss was an investment analyst and a performance analyst. 

She is a candidate for Level III of the Chartered Financial Analyst (CFA) program and a candidate for Level II of the Chartered Alternative Investment Analyst (CAIA) program.

Foss graduated from the Georgia Institute of Technology with a bachelor’s degree in business administration concentrating in finance.

Hub Selects New Financial Adviser

Hub International has hired financial adviser Randy Grose and acquired his book of business.

Based in Englewood, Colorado, Grose has more than 20 years of experience working with retirement plans and wealth management services. He will join Hub Retirement and Private Wealth (Hub RPW) in Hub Colorado.  

Advisor Group Adds Two Professionals Through Securities America

Advisor Group has recruited financial advisers Robert “Bob” Batick and Norman “Todd” Coates. The two collectively oversee $376 million in total client assets.

The advisers join Advisor Group through its network member firm, Securities America, and two of Securities America’s largest affiliated Super-OSJs, with Batick joining Patriot Financial Group and Coates joining Navigation Financial Group.

In addition to Securities America, Advisor Group also includes FSC Securities, Royal Alliance Associates, SagePoint Financial, Triad Advisors and Woodbury Financial Services.

Jim Nagengast, CEO and president of Securities America, says, “We are excited to welcome these two outstanding financial advisers to Securities America. Bob Batick and Todd Coates have established thriving practices through their enduring commitment to going the extra mile for their clients, and we are pleased to support them in progressing to the next stage of their growth. We also congratulate Patriot Financial Group and Navigation Financial Group on welcoming these two advisers. Their success is our success, and we look forward to continuing to build on our partnerships with them in the years to come.”

Batick joins Securities America through Patriot Financial Group and specializes in supporting and advising corporate retirement plans. Coates joins Securities America Advisors, one of Securities America’s two corporate registered investment advisers (RIAs), through Navigation Financial Group. He provides a balanced mix of services for his clients through a hybrid advisory model.

Greg Cornick, Advisor Group’s president, advice and wealth management, says, “We are thrilled to welcome Bob and Todd to the Advisor Group network. Their focus on top-tier client service makes them a perfect fit with our platform and culture, and we are proud to partner with them to drive their continued success. Our commitment to finding new ways to support our financial advisers as they serve their clients is the ultimate reason behind our success, and we are happy to stand in their corner as they pursue their growth goals.”

Retirement Plan Consultant Joins SageView

Marc Schmeeckle has joined SageView Advisory Group as a retirement plan consultant in its Denver office. He joins a team that includes Consultants Wayne Roth and Kevin Schmeits.

Schmeeckle brings over 18 years of experience in financial services to SageView, most recently with Principal Financial Group as the director of retirement solutions. In this role, he worked with thousands of participants to improve their retirement outlook and transition into retirement. Schmeeckle also led the west division of the Principal Retire Secure program. Prior to his work in financial services, Schmeeckle was a firefighter and U.S. Army Ranger.

“When Wayne reached out about joining SageView in Colorado, I was thrilled,” Schmeeckle says. “I have known him for more than 20 years, and this was an opportunity I could not pass up. I look forward to working alongside Wayne and Kevin in my new role at SageView, a firm I have admired for many years, while continuing the work I’ve always enjoyed: supporting plan sponsors and helping participants achieve a secure retirement.”

As a retirement plan consultant at SageView, Schmeeckle is responsible for supporting new and existing plan sponsor clients with all aspects of plan management, including investment consulting, evaluation and monitoring, plan design, employee and plan sponsor education, plan health and benchmarking, and managing fiduciary obligations. He will also serve as a consultant to the Denver team’s wealth management clients, advising on financial and retirement planning.

Randy Long, SageView founder and managing principal, adds, “Marc is a great complement to our team in Denver, where we see immense potential for growth both in our institutional and wealth management businesses. Marc’s varied experience working with plan sponsors and participants in 401(k), 403(b), 457, defined benefit [DB], ESOP [employee stock ownership plan] and nonqualified deferred compensation [NQDC] plans is an asset to SageView and our clients.”

Schmeeckle has a bachelor’s degree in criminal justice from Metropolitan State University of Denver and a master’s in business administration from Colorado State University.

Broadridge Hires CIT Funds Director

Broadridge Financial Solutions has appointed Toby Cromwell to the role of director, CIT funds product management.

In this role, Cromwell will be responsible for the growth and management of a portfolio of products, primarily collective investment trust (CIT) funds, and will play a key role in the product development, management, and governance and business management for all stable value and other CIT products in the United States. Cromwell will play a role in amplifying Broadridge’s Matrix Solutions as a preferred discretionary trustee within the retirement provider community. 

Based in Denver Cromwell brings over 30 years of experience to the role, having previously served as vice chairman at Colorado State University Foundation and chairman of the investment committee, executive vice president at Scout Investments, and as head of global consultant relations and institutional defined contribution (DC) strategy at Columbia Threadneedle. Cromwell will leverage his extensive knowledge of the space to expand Broadridge’s discretionary trustee services within the retirement provider community.

Compliance August 6, 2021

Citgo Is Latest Large Employer Facing Actuarial Equivalence Challenge

The proposed class of plaintiffs alleges Citgo is using mortality assumptions that are at least 50 years out of date while converting from a pension plan’s standard annuity benefit to alternative options.

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A new Employee Retirement Income Security Act (ERISA) complaint has been filed in the U.S. District Court for the Northern District of Illinois’ Eastern Division, arguing the Citgo Petroleum Corp. has violated its fiduciary duties in the provision of pension benefits to certain employees.

In its allegations and factual background, the complaint closely resembles a sizable and growing number of lawsuits focused on the actuarial equivalence—or lack thereof—of different forms of annuities paid out by pension plans sponsored by major U.S. employers. Thus far, the cases have reached mixed results, with some being cleared for discovery, some being dismissed outright on technical grounds and others reaching rapid settlements. 

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In all the cases, including the new Citgo matter, the plaintiffs claim their employers are failing to pay the full promised value of “alternative annuity benefits” defined by the plan. The suits say this generally happens because the plan sponsors are allegedly using outdated mortality assumptions and interest rate calculations while converting standard annuity payments into alternative options, such as annuities that include spousal survivor benefits, also known as joint and survivor annuities (JSAs). Here, the plaintiffs allege Citgo is using mortality assumptions that are at least half a century out of date.

“When the [Citgo] plan converts a single life annuity [SLA] to a joint and survivor annuity, it uses a mortality table that is 50 years out of date, despite massive increases in life expectancy in the intervening decades,” the complaint states. “As a result, participants and beneficiaries [who elect a joint and survivor annuity] receive significantly less than the actuarial equivalent of their single life annuity, directly contrary to ERISA’s requirements. The defendants appear to have recognized that these actuarial assumptions did not pass muster. Effective January 1, 2018, they amended the plan to ensure that for those commencing benefits after January 1, 2018, the plan employs updated and reasonable actuarial assumptions. But for people who began receiving benefits before 2018, the defendants continue to employ punitive, unreasonable and severely outdated assumptions, which result in the class receiving less than their full pensions.”

The complaint goes on to suggest the plan’s governing document told class members that the assumptions used to convert a SLA to a JSA resulted in “actuarial equivalence.”

“This led class members to believe they were receiving benefits that are as valuable as the law requires, when in fact those benefits are less valuable than what ERISA provides,” the complaint states. “Similarly, defendants failed to inform class members that they are receiving benefits that are less valuable than what the law requires.”

Later on, the complaint details the pre-2018 annuity transformation formula in greater detail, noting that it used an 8% annual investment return assumption and a mortality rate defined using a unisex mortality table, blending 95% of the male rates and 5% of the female rates of the Society of Actuaries’ 1971 Group Annuity Mortality Table, with values projected to 1975. For beneficiaries, a unisex mortality table is also used, blending 5% of the male rates and 95% of the female rates of the 1971 Group Annuity Mortality Table, also with values projected to 1975.

“The mortality table employed by the plan is 50 years out of date, despite dramatic increases in longevity of the American public,” the complaint states. “Those increases are reflected in the mortality tables provided for by 29 U.S.C. Section 1055(g), which are updated routinely by the Treasury Department. Nonetheless, for those who commenced a joint and survivor annuity before 2018, the plan’s actuarial assumptions are outdated, unreasonable and result in paying JSAs that are less than the actuarial equivalent value of a participant’s single life annuity benefit.”

In addition to monetary damages, the complaint seeks to provide that class members receive the same updated actuarial assumptions that apply to those who commence benefits from 2018 on; to bring the plan into full compliance with ERISA; and to pay all benefits owed to class members based on the reformed plan.

The full text of the complaint is available here.

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