Uncategorized June 30, 2023

Retirement People Moves

T. Rowe Price names new head of global distribution; IRI announces board changes; Northern Trust appoints Calcagno as senior wealth strategist; and more.

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Sawyer Succeeds Higginbotham as Head of Global Distribution at T. Rowe Price

Dee Sawyer

Robert Higginbotham

T. Rowe Price Group, Inc. announced that Robert Higginbotham, head of global distribution and global product, plans to retire at year-end after 11 years with the firm.

Higginbotham, who also serves as CEO and chair of T. Rowe Price International, as a member of the firm’s management committee and its subcommittees focused on strategy, compensation, and development, will be succeeded by management committee member Dee Sawyer. 

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Effective January 1, 2024, Sawyer will be named the new head of global distribution. She will also assume Higginbotham’s responsibilities on the firm’s subcommittees. She joined the firm in 2012 and currently leads the U.S. intermediaries business channel, as well as retirement plan services.

Bank of America Names Korkow President of Omaha

Craig Korkow

Bank of America has named Craig Korkow president of Bank of America Omaha. As president, Korkow will connect banking and investment resources offered through the bank’s eight lines of business to people and companies across the region.

In addition to his responsibilities as president, Korkow serves as resident director for Merrill Wealth Management, working with clients to design and implement detailed retirement plans.

“Craig has established deep relationships with teammates, clients and the Omaha community for more than 20 years and personifies Bank of America’s commitment to stakeholder service,” said Brian Moynihan, Bank of America chairman and CEO in a statement. “He is well positioned to grow our presence in Omaha.”

Bank of America Tuesday announced plans to open financial centers in nine new markets by 2026. Omaha is one of those new markets. The others are Milwaukee; Louisville, Kentucky.; Birmingham, Alabama; New Orleans; Madison, Wisconsin; Boise, Idaho; Dayton, Ohio and Huntsville, Alabama.

Northern Trust Appoints Calcagno as Senior Wealth Strategist

Kathryn Calcagno

Northern Trust appointed Kathryn Calcagno as senior wealth strategist in Portland, Oregon. She will work with high-net-worth individuals and families to develop wealth management plans.

“We are excited to welcome Kathryn’s caliber of experience to our growing Portland market, where she will add a unique perspective to help our clients through all parts of their lives,” Brandie Hammette, managing director of Oregon for Northern Trust Wealth Management, said in a statement.

Most recently, Calcagno was senior managing director, wealth adviser at First Republic Bank, where she managed investment and trust services for clients.

Lincoln Financial Group Promotes Turer, Hires Diemer

Thomas Diemer

Stephen Turer

Lincoln Financial Group promoted Stephen Turer to the newly created role of head of insurance solutions. Thomas Diemer has been appointed chief financial officer of retail solutions.

Turer will oversee Lincoln’s Life, MoneyGuard and annuity product lines. Diemer will oversee Lincoln’s life and annuity businesses, as well as Lincoln Financial Network, its wealth management business. Both Turer and Diemer will report to Matt Grove, executive vice president and head of retail solutions.

“As we continue aligning our Life and Annuity businesses, Stephen’s product expertise and leadership experience make him the perfect person for this newly created role,” said Grove in a statement. “Tom’s extensive financial industry expertise adds incredible value to the Retail Solutions team.”

IRI Announces Changes to Board of Directors, Executive Committee

Dylan Tyson

Melissa Kivett

Bill Lowe

Insured Retirement Institute announced Bill Lowe will join the IRI board of directors’ executive committee, having served on the IRI board of directors since 2012. Lowe is president of Sammons Institutional Group, Inc.

Joining the IRI board of directors are Melissa Kivett, executive vice president, corporate retirement solutions & business development, TIAA and Dylan Tyson, president of the retirement strategies business at Prudential.

“IRI is fortunate to have highly committed members and industry leaders willing to volunteer their time, energy, and passion to provide governance and strategic guidance to our organization,” Wayne Chopus, IRI’s president and CEO, said in a statement. “I look forward to working with Bill, Melissa, and Dylan to drive IRI’s agenda forward to help America’s workers and retirees achieve a secure and dignified retirement.”

Bellucci to Serve as Chief Administrative Officer for Retirement Solutions at TIAA

Ray Bellucci

Ray Bellucci will serve as the chief administrative officer for TIAA retirement solutions.

He continues to head TIAA’s Recordkeeping Solutions. He will now take on the additional role of leading strategy and business enablement functions for retirement solutions.

“I came to TIAA in high school as an intern with little to no understanding of the organization at all.  I choose to be here 40 years later because I couldn’t imagine myself anywhere else,” said Bellucci in a statement. “The work we do to ensure people who dedicate their lives to research, teaching, healing, counseling, etc. can do what they love.”

Compliance June 29, 2023

Jury Sides with Yale in 403(b) Lawsuit

A Connecticut federal jury sided mostly in favor of Yale over the management of its $5.5 billion retirement program.

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A Connecticut federal jury delivered a verdict on Wednesday—deciding the class action lawsuit brought in 2016 against the $5.5 billion retirement plan Yale University 403(b) retirement plan—ruling the school mismanaged the plan but caused no losses to plan participants, according to the verdict.

The jury ruled that the defendants—Yale University; Michel Peel, former vice president of human resources and administration; and the retirement plan fiduciary committee—breached their fiduciary duty of prudence to participants by allowing unreasonable recordkeeping and administrative fees to be charged to participants in the plan, according to the court filing.

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However, the jury also found that a fiduciary following a prudent process could have made the same decisions as to recordkeeping and administrative fees as the defendants, the verdict shows. The jury found that the plaintiffs did not prove that the plan suffered any losses or that there were any damages.

On the other three claims before them—regarding investment options, the selection of share classes and the offering of the TIAA traditional annuity—the jury found that the plaintiffs failed to prove that Yale breached its fiduciary duties.

The plaintiffs will appeal the decision, says their attorney Jerry Schlichter, founder and managing partner at the law firm Schlichter, Bogard & Denton, via email.  

Notably, the jury ruled for the defendants on the alleged fiduciary breach regarding plan investments, explains Drew Oringer, a partner in and general counsel at the Wagner Law Group, which is not involved in the litigation.  

“The jury also found that any issues regarding the retention of administrators did not result in damages,” he says.

Federal Judge Alvin W. Thompson in 2022 granted in part and denied in part, defendant Yale University’s motion for summary judgement.  

Whether the verdict is likely to “embolden other institutions and fiduciaries not to settle and to get to a verdict? That’s unclear,” adds Oringer. “The cases are extremely fact-sensitive, as the Supreme Court effectively confirmed in the [Hughes v. Northwestern University] case. And defendants with better facts may decide they want to see if they can get the result that Yale got, while defendants with more difficult facts may be more willing to settle.”

A jury verdict finding for the plaintiffs would likely have clearer effects to claims brought under the Employee Retirement Income Security Act, Oringer adds.   

“Putting aside the nuances that may be present in any particular case, it seems clear to me that a verdict against Yale here would have been perceived as a positive for plaintiffs attempting to negotiate settlements with others and might well have made other defendants more circumspect when considering whether not to settle,” he says. “There’s a lot of work involved for a plaintiffs’ firm to take a case like this all the way through to a verdict, and to have come away with nothing is, to say the least, not the result that the plaintiffs’ lawyers wanted.”

The lawsuit was brought in 2016 before U.S. District Court for the District of Connecticut. The lawsuit is Vellali et al v. Yale University et al.  

The original complaint had alleged seven counts of fiduciary breach under the Employee Retirement Security Act against Yale University, the retirement plan fiduciary committee and Peel.

The class of plaintiffs is represented in the litigation by attorneys with the law firms of Cohen & Wolf P.C., based in Bridgeport, Connecticut; and Schlichter, Bogard & Denton, LLP, based in St. Louis, Missouri. The defendants are represented by attorneys with Mayer Brown, based in Washington, D.C.

“We will continue our commitment to having a trial in each case where that is the best action for our clients,” says Schlichter, by email.  

Interested parties in the ligation included Aon Hewitt Investment Consulting Inc. represented by attorney  Matthew Freimuth, with law firm Willkie Farr & Gallagher LLP, based in New York City; Vanguard Group Inc. represented by attorney Tracy Salmon-Smith, with law firm Faegre Drinker Biddle & Reath LLP, based in Florham Park, New Jersey; and TIAA, represented by James Glasser, from Wiggin & Dana-NH, based in New Haven, Connecticut.

A Yale University representative did not return a request for comment on the ruling. An attorney for the defendants declined to comment, referring a request to a Yale representative. 

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