Deals & People July 22, 2022

Retirement Industry People Moves

Global Atlantic expands institutional business into Asia; new attorney joins The Wagner Law Group; Lincoln Financial Group names workplace solutions head; and more.

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New Attorney Joins The Wagner Law Group

The Wagner Law Group has recently announced that attorney Beth Davis has joined the firm’s Los Angeles office as of counsel. 

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Davis advises collectively bargained multiemployer funds. She also provides counsel to clients on retiree medical trust matters, including implementing health reimbursement arrangements and compliance with rules and regulations under the Internal Revenue Code. Her experience in employee benefits includes short-term and long-term disability claims, life waiver of premium claims and life insurance claims.

Before joining the firm, Davis spent 15 years representing individual claimants seeking benefits under ERISA plans. Davis has spoken on ERISA topics ranging from the intersection of ERISA with Social Security disability income benefits to how best to support a benefit claim at the initial and appeal levels.

Beth was previously a senior attorney at a Los Angeles law firm handling ERISA matters. She has been admitted to the bars of California, North Carolina and Illinois.

Lincoln Financial Group Names Workplace Solutions Head

Lincoln Financial Group has announced that James Reid will be joining the company in August as executive vice president, head of workplace solutions, to lead the organization’s group benefits and retirement plan services businesses. Reid will report to President and CEO Ellen Cooper and will be a member of the company’s senior management committee.

As the head of workplace solutions, Reid will be responsible for the strategy and executive leadership of core business lines for Lincoln, which offers a variety of products and services to employers and their employees. Continuing to align the employer-focused businesses under one leader will enable Lincoln’s workplace solutions team to collaborate and leverage best practices, according to firm leadership.

Reid comes to Lincoln from Versant Health, a subsidiary of MetLife, where he served as president and CEO. Prior to leading Versant, he held several senior leadership roles at MetLife for the past decade, most recently as executive vice president and head of global employee benefits. He has been in the industry for more than 30 years and has leadership experience in worksite-focused businesses.

Additionally, Ralph Ferraro will be stepping into an expanded role at Lincoln Financial as senior vice president and head of retirement plan services, reporting to Reid. This new role enables one leader to focus holistically, end-to-end, on the company’s retirement business.

Ferraro joined Lincoln Financial in 2016 as head of retirement product solutions, and in 2021, he took on a combined leadership role in the workplace solutions organization with additional leadership of the company’s group benefits product and underwriting functions. Ferraro has more than 25 years of industry experience; prior to Lincoln Financial, he held leadership positions at Voya Financial and CitiStreet.

T. Rowe Price Adds Two Senior Executives to Its Institutional DC Business


T. Rowe Price has announced that it has made two new hires to support its Americas institutional defined contribution investment only business.

Meenu Annamalai is a senior institutional client service executive. In this role, she will service DC plan sponsor clients located in the western and central U.S. and be responsible for engaging with consultants, advisers and DC organizations. She will primarily cover DCIO relationships, but also support defined benefit public and corporate clients, as well as endowments and foundations and high-net-worth clients. Based in San Francisco, Annamalai will report to Kim Young, head of institutional client service for T. Rowe Price’s Americas business.

Annamalai has more than 18 years of experience in the DC market and comes to T. Rowe Price from Mercer, where she was DC leader for the West market. Previously she served as a plan sponsor for HP Inc., where she was director of retirement investment and compliance. Annamalai holds a B.A. from York University and an MBA from University of California, Berkeley.

Jessica Sclafani is a senior defined contribution strategist. In her role, she will be responsible for driving Americas’ DC research and thought leadership agenda and contributing to overall DCIO strategy. Additionally, Sclafani will serve as a subject matter expert for the firm’s DC brand-building efforts more generally. She will be a resource to client service and business development professionals, as well as T. Rowe Price retirement professionals across the enterprise, to support firmwide DC initiatives. Sclafani will report to Michael Davis, head of defined contribution plan specialists for the Americas.

Sclafani has more than 14 years of experience, most recently with MFS Investment Management, where she served as a DC strategist for the investment solutions group. Prior to MFS, she led the retirement practice for industry consultant Cerulli Associates, where she guided the firm’s DC research efforts. Previously, she held an analyst position with Wellington Management. Sclafani holds a B.A. from Boston College and the Chartered Alternative Investment Analyst designation. She is based in Boston.

Alta Trust Company Names New General Counsel

After his over 30-year career as an ERISA attorney in private practice, Bruce Ashton has joined the Alta Trust Company team as general counsel. Prior to this position, Ashton provided legal services for Alta Trust for over a decade, which forged a strong professional relationship.

Ashton is an ERISA expert with an extensive background in retirement income and collective investment trusts, making him an ideal candidate to serve as Alta Trust’s general counsel.

Global Atlantic Expands Institutional Business Into Asia

Global Atlantic Financial Group has announced two new executive hires in support of the growth of its institutional business and its international expansion into Asia. Neir Jhawar has joined Global Atlantic as the chief operating officer for the institutional markets business, and Alireza Vaseghi has joined as head of Asia and global head of strategic clients.

Jhawar will ensure appropriate focus and resources are in place across the company to support its growing institutional business. He joins Global Atlantic from Credit Suisse, where he served in various leadership positions, including managing director, global head of prime services risk, U.S. head of prime brokerage and global primes services chief operating officer. Prior to Credit Suisse, Jhawar spent more than eight years at Accenture.

Vaseghi will be responsible for the development of Global Atlantic’s institutional strategy in Asia, working in collaboration with Darryl Herrick and Jason Kao, co-heads of reinsurance, on potential opportunities in the market. Vaseghi will also focus more broadly on optimizing the company’s global reinsurance platform. With nearly 20 years of industry experience, he joins Global Atlantic from AIG, where he served in various roles, including deputy CIO and CIO for AIG Life & Retirement, and COO of institutional markets. Prior to AIG, Ali spent 10 years at Goldman Sachs.

Compliance July 22, 2022

6th Circuit Ruling Revives Parts of TriHealth ERISA Lawsuit

The district court ruling in the case granted full dismissal of the excessive fee lawsuit, but the 6th Circuit has now reversed parts of the ruling and remanded the case for further litigation.

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The 6th U.S. Circuit Court of Appeals has reversed parts of a prior ruling in an excessive fee lawsuit against TriHealth Inc and remanded the case for further litigation.

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The new appellate ruling comes less than a year after the U.S. District Court for the Southern District of Ohio, Western Division issued its own order granting dismissal of the amended class action complaint, which was initially filed against TriHealth Inc in August of 2019.

The underlying complaint in the case alleged that, for every year between 2013 and 2017, the administrative fees charged to TriHealth retirement plan participants were greater than 90% of those charged to comparable plans. Case documents suggest that, as a total of plan assets, TriHealth’s plan cost 86 bps in 2017, compared with an alleged peer mean of 41 bps. The lawsuit also claimed that the TriHealth plan’s investment fees were excessive when held up against other comparable mutual funds not offered by the plan.

In pursuing their dismissal motion, the defendants presented two main arguments. First, that the plaintiffs’ claims are barred by the applicable statute of limitations, and second, that plaintiffs failed to adequately plead their breach of the duty of prudence and loyalty claims such that dismissal is required.

The District Court’s analysis of the statute of limitations arguments reflects other courts’ considerations of the matter, including the analysis by the U.S. Supreme Court of “actual” versus “constructive” knowledge and how these two types of knowledge affect the length of time an ERISA complainant can wait to file a lawsuit. As the District Court’s order summarized, the Supreme Court has determined that the mere provision of disclosure documents to a complainant does not necessarily establish their awareness of potential fiduciary wrongdoing. Practically speaking, this distinction matters because of the special (and much shorter) three-year statute of limitations period which begins when plaintiffs can be shown to have gained “actual knowledge” of an alleged fiduciary breach.

The new appellate ruling points out that new precedent has overtaken some of the debates in the case.

“Our recent decision in CommonSpirit largely resolves several of the plaintiffs’ claims that their employer TriHealth should not have offered its employees the option of investing their retirement money in actively managed funds, that the performance of several funds was deficient at certain points, and that the overall fees charged for the investment options were too high,” the ruling states.

The CommonSpirit ruling was itself issued by the 6th Circuit in June, and it is already having an impact on the ERISA litigation landscape within the 6th Circuit’s jurisdiction. One fiduciary insurance executive called the CommonSpirit ruling “the best decision ever written in an excessive fee case,” as it effectively rebuts the arguments of fiduciary imprudence asserted in most excessive fee lawsuits in which plaintiffs ask the court to infer fiduciary malpractice based on circumstantial evidence of what participants consider an undesirable outcome.

The 6th Circuit’s new ruling posits that the complaint in TriHealth contains one other claim not covered by CommonSpirit.

“The gist of it is this: Even if a prudent investor might make available a wide range of valid investment decisions in a given year, only an imprudent financier would offer a more expensive share when he could offer a functionally identical share for less,” the new ruling states. “The plaintiffs claim that TriHealth offered them more expensive mutual fund shares when shares with the same investment strategy, the same management team and the same investments were available to their retirement plan at lower costs. Because the plaintiffs in this last respect have stated a plausible claim that TriHealth acted imprudently, we affirm in part and reverse in part the district court’s dismissal of their complaint for failure to state a claim.”

The new appellate ruling offers additional analysis of the issues in the CommonSpirit ruling.

“Disappointing performance in the near term and higher costs do not by themselves show deficient decisionmaking, especially when we account for competing explanations and other common-sense aspects of long-term investments,” the order states. “Different services, investment strategies and investor preferences invariably lead to a spectrum of options—and in turn a spectrum of reasonable fee structures and performance outcomes. As a result, side-by-side comparisons of how two funds performed in a narrow window of time, with no consideration of their distinct objectives, will not tell a fiduciary which is the more prudent long-term investment option.”

Regarding the part of the case that has been remanded, which involves the offering of higher-cost share classes when lower-cost share classes were apparently readily available, the appellate ruling presents a cautious analysis of the issue at hand.

“The three employees separately complain that TriHealth violated the duty of prudence by offering them pricier retail shares of mutual funds when those same investment management companies offered less expensive institutional shares of the same funds to other retirement plans,” the order states. “Why, they complain, didn’t TriHealth take advantage of—indeed just ask for—these lower-priced mutual fund shares for the same investment team and same investment strategy when this retirement plan has nearly half a billion dollars in assets?”

The ruling continues as follows: “This failure to take advantage of the cheaper share classes in 17 of the 26 offered funds, they say, materially decreased the value of their retirement savings. Taken in their most flattering light, these allegations permit the reasonable inference that TriHealth failed to exploit the advantages of being a large retirement plan that could use scale to provide substantial benefits to its participants. Under the common law of trusts, which supplied the backdrop to ERISA when Congress enacted it in 1974, that would state a claim of imprudence.”

The order notes that “equally reasonable inferences” in the other direction could indeed exonerate TriHealth once all of the facts come in.

“Perhaps the fund is not large enough or does not have enough participants interested in a particular investment to qualify for the less expensive share class,” the order notes. “Perhaps the plan has revenue sharing arrangements in place that make the retail shares less expensive or that benefit plan participants on the whole. But at the pleading stage, it is too early to make these judgment calls. In the absence of further development of the facts, we have no basis for crediting one set of reasonable inferences over the other. Because either assessment is plausible, the Rules of Civil Procedure entitle the three employees to pursue their imprudence claim (at least with respect to this theory) to the next stage. Other courts of appeals have reached similar conclusions at this juncture and in this setting.”

The full text of the appellate ruling is available here.

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