Deals & People March 24, 2023

Retirement Industry People Moves

Asset Management hires emerging markets head; FuturePlan appoints divisional VP; KKR names chief investment strategist; and more.

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UBS Asset Management Hires Emerging Markets Head Khan from AllianceBernstein 

Shamaila Khan

UBS Asset Management Ltd. announced that Shamaila Khan will join the firm as head of fixed income for emerging markets and Asia Pacific. She will report to Charlotte Baenninger, UBS’ global head of fixed income, and become a member of the fixed income investment forum. 

Khan has more than 23 years of experience in EM sovereigns and corporates, hard and local currency. Most recently, she was head of emerging markets fixed income at AllianceBernstein.  

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“Shamaila is a seasoned investor with a proven track record, and a history of success in designing and launching innovative products to meet clients’ needs, including sustainability-focused EM strategies,” Baenninger said in a statement. “She is also a complementary fit to our EM & Asia Portfolio Management, Sovereign and Credit analyst teams with our well-established approach of bottom-up expertise on the ground with our top-down asset allocation views.”  

FuturePlan by Ascensus Appoints Cricenti as Divisional VP 

Jeff Cricenti

FuturePlan by Ascensus, a retirement third-party administrator, announced that Jeff Cricenti has assumed divisional vice president responsibilities for the organization’s North/West region.  

Cricenti will deliver consultative support to retirement plan clients while expanding relationships with recordkeeping and financial adviser partners. Prior to joining FuturePlan, Cricenti was a regional retirement plan director at Lincoln Financial Group. 

“Jeff’s integrity, breadth of industry knowledge, and collaborative approach to problem solving help him create and maintain strong relationships that are built on trust—and ensures our clients in the North/West region remain in good hands,” said Aaron McIsaac, FuturePlan’s head of sales, in a statement.  

KKR Names Paula Roberts Chief Investment Strategist for Private Wealth 

Paula Roberts

KKR & Co. Inc. announced the promotion of Paula Roberts to chief investment strategist for private wealth.  

In the newly created role, Roberts will work with KKR’s global macro, balance sheet and risk team to deliver investment insights to KKR’s private wealth partners. 

Roberts had been managing director and global head of consumer and real estate macro and thematic investing. 

“I am thrilled to work with Todd, Henry and the private wealth team to deepen our relationships with private wealth firms and financial advisers by providing differentiated and trusted insights that help them navigate and thoughtfully incorporate alternative investments into their portfolios,” said Roberts in a statement.  

Vicinelli, Rappaport Join Social Finance’s Leadership  

Stephen Vicinelli

Catherine Rappaport

Advisory nonprofit Social Finance appointed Stephen Vicinelli as vice president of impact investments and Catherine Rappaport as vice president of impact advisory.  

Vicinelli and Rappaport will lead the development of a fund focused entirely on impact-first investments. The fund aims to deliver measurable positive social and environmental outcomes.  

“Building on our 12-year track record in developing impact-first strategies, we are excited to respond to the market’s demand for a one-stop solution for the impact-first end of the impact investing spectrum,” Social Finance CEO Tracy Palandjian said in a statement. “We’re fortunate to recruit Stephen and Catherine to drive these exciting efforts.”  

Morningstar Announces New Head of Channel Strategy 

Nathan Voris

Nathan Voris joined Morningstar’s workplace and retirement services team as head of channel strategy.  

Voris will drive go-to-market strategy and execution, including strategy of new products and services for various channels. Voris will work closely with the company’s business development, relationship management and product teams. 

Voris has expertise in product strategy and experience working with recordkeepers, RIAs, asset managers and broker/dealers, according to Morningstar. 

He will report to James Smith, head of workplace global business strategy for Morningstar’s workplace and retirement services team.  

Capital Group Promotes Horwitz-Marcus to National Sales Director 

Heidi Horwitz-Marcus

Heidi Horwitz-Marcus was promoted to national sales director at Capital Group. In the new role, she reports to Matt Eisenhardt, the firm’s director of wealth management field and site sales. 

Horwitz will be responsible for leading the external wealth management consultants focused across the independent broker/dealer channel.   

According to LinkedIn, Horwitz-Marcus has more than 17 years of experience at Capital Group, where she most recently served as financial conglomerate national sales director before beginning her new role. 

Fiduciary Trust International Expands Presence in Atlanta  

Fiduciary Trust Co. International, a global wealth manager and subsidiary of Franklin Templeton, announced two new hires as part of its expanded presence in Atlanta. Allison Carter was appointed senior trust counsel, and Timothy Barton was named a senior portfolio manager. 

“Allie and Tim are highly respected wealth management professionals with deep experience and strong ties to the Atlanta community. My teammates and I are excited to welcome them to Fiduciary,” said David Edmiston, Fiduciary Trust International’s regional managing director for Greater Atlanta, in a statement. 

Carter and Barton both spent the last 10 years at Northern Trust in Atlanta. Carter was a senior trust adviser and senior vice president, while Barton served as a senior portfolio manager and senior vice president, developing investment strategies for families and individuals.  

Robinson Promoted to Chief Diversity Officer at Lockton 

Lockton Companies announced the promotion of Stephanie Robinson to chief diversity officer. 

In the new role, Robinson will be responsible for the execution of Lockton’s diversity, equity and inclusion strategy, while also leading the Midwest Series as COO.  

Robinson joined Lockton in February 2022 as director of DEI, having previously led DEI at Blue Cross and Blue Shield of Kansas City.  

“I am excited to serve as Lockton’s new Chief Diversity Officer,” said Robinson in a statement. “I will continue in my efforts to advance DEI and make Lockton a place where all people feel welcome, valued and excited to build a career here.” 

Franklin Templeton Appoints VP of Sustainability Global Markets 

Franklin Templeton announced the appointment of James Andrus as vice president of sustainability global markets, a newly created leadership role within the firm’s global sustainability strategy team.  

Based in California, Andrus will oversee execution of Franklin Templeton’s sustainability and stewardship initiatives. Andrus joins Franklin Templeton from the California Public Employees’ Retirement System, where he served as the interim managing investment director for sustainable investing. 

“I look forward to adding value by advancing the sustainable investment priorities and contributing directly to global regulation and policy initiatives while emphasizing enhanced financial information,” said Andrus in a statement. 

Data & Research March 23, 2023

Non-Immediate Vesting Does Not Help Companies Retain Employees

According to retirement experts at an EBRI hosted webinar, vesting forfeitures are easy to time and easy to outweigh with pay raises from another employer.

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An Employee Benefit Research Institute research panel focused on employee tenure argued that non-immediate vesting schedules for employer matches are an overrated retention tool. An immediate vest is a smarter recruitment tool, and vesting thresholds can often be outweighed by accepting a higher paying job elsewhere, according to the panelists.

Chantel Sheaks, the vice president of retirement policy at the U.S. Chamber of Commerce, explained that the general trend is toward immediate vesting schedules. According to research from Vanguard, 49% of DC plan participants had immediate vesting, and only 10% had three-year cliff vesting, the least generous schedule allowed by law.

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Sheaks added that many sponsors use vesting as a retention tool, but she cautioned against overuse of this tactic. Employers need to weigh the lost vested contributions against the pay raise that an employee looking for a new job might be able to acquire, the same calculation the employee is assuredly making. She also noted that some employees find vesting schedules confusing or don’t know their employer’s schedule, which further undermines its use as a retention tool, since employees cannot be deterred from leaving a job by a program of which they are unaware.

Craig Copeland, the wealth benefits research director at EBRI, agreed and added that a higher-paying job can often outweigh the forfeited contributions from missing a vest threshold. An employee might weigh the forfeiture heavily if they are very close to a vesting threshold, but often that employee will ask their new employer for a delayed start in order to meet that threshold. He added that leaving jobs can sometimes be bad for one’s retirement security if the participant forfeits a lot of money due to their vesting schedule, but as a general rule, the increase in pay from a new job will more than compensate for the short-term loss.

While the panel agreed vesting schedules can be overrated retention tools, Sheaks said having an immediate vest can be a great recruitment tool. If an immediate vest is someone else’s recruitment tool, it would further undermine the retention value of a delayed vest.

Copeland noted that defined-contribution-eligible workers tend to stay longer than those that are not eligible for DC plans. According to 2019 data from the Survey of Consumer Finances as cited by EBRI, 24.5% of eligible employees have a tenure of two years or less, whereas 50.8% of ineligible employees have a tenure of two years or less.

Sheaks highlighted a provision in the SECURE 2.0 Act of 2022 that will allow employer contributions to be added on a Roth basis: The employee pays income tax on the contribution as ordinary income, in order to receive it into a Roth account. SECURE 2.0 mandates that such contributions be immediately vested, though offering a Roth match is voluntary. Sheaks said this requirement will likely deter many employers from using it at all, but it could make some employers reconsider their vesting schedules or, alternatively, offer one schedule for Roth and another for traditional.

Copeland also explained that workplace tenure tends to be higher for men than for women (5.1 vs. 4.7, narrower than the 1983 datapoints of 5.9 and 4.2), and for whites than Blacks and Hispanics. This means non-immediate vesting schedules tend to do more damage to the retirement savings of underrepresented demographic groups.

 

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