Deals & People July 11, 2023

Principal Bolsters Retirement Division With Leadership Hires

Principal adds four industry leaders to support the growth of its U.S. retirement business.

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Principal Financial Group announced Tuesday that it has hired four retirement industry leaders to support the growth strategy of its U.S. retirement business.

All four individuals will report to Teresa Hassara, senior vice president of workplace savings and retirement solutions at Principal; Hassara joined the firm about one year ago as the new retirement head.

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“Our customers are looking for more sophisticated approaches to run their companies and to provide the best retirement solutions and services to their employees,” said Hassara in a statement. “Each of these new hires reinforces our commitment to working with businesses, advisers, and consultants in strategic and thoughtful ways to maximize trust and value.”

Jeff Cimini joins as vice president of planning, performance and transformation, a newly created role, to lead operational and business planning. According to LinkedIn, Cimini was previously at Voya Financial, serving as head of strategy and financial management, as well as head of institutional product.

Principal has hired Sean Jordan as head of small and midsize market segments, overseeing the strategy and customer care relationships for the two segments. He is tasked with enhancing alignment across marketing, sales, product development and finance. Jordan will work with Joleen Workman, head of Principal’s large market segment, to develop the right combination of services and products within their respective segments. Jordan’s position is new after splitting the small, mid and large market segments into two leadership roles. Workman previously oversaw all three customer segment strategies as vice president of customer care.  

Monica Oswald will serve Principal as vice president of retirement operations, also a newly created role, responsible for optimizing operational processes for retirement and income solutions. Additionally, she will be strengthening digital experiences and resources for customers and employees, according to the company.

Principal has appointed Andrew Matos as head of stock plan services. He will oversee the firm’s employee stock ownership plan and equity compensation plan capabilities, cornerstones of Principal’s total retirement solutions. With more than 15 years of experience in financial services, Matos will lead the overall strategy and growth of the stock plan services. Matos succeeds Amy Keiser, who now serves as vice president of retirement product and solutions.

The changes to the retirement division comes after the Des Moines, Iowa-based firm announced in February the integration of its global asset management and international pension business under the name of Principal Asset Management. The company’s CEO, Dan Houston, told PLANADVISER in March that the asset management division is the “jet fuel” of the business.
In Practice July 11, 2023

Cogent: Advisers Should Lean Into 401(k) Cost-Cutting Conversations

A new Cogent report shows plan sponsors are more likely to direct heightened scrutiny, including cost-cutting, toward their retirement plans.

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Plan advisers should be ready for, if not prompting, conversations with plan sponsors who are scrutinizing their defined contribution retirement plans, including pricing transparency, according to the lead researcher of a recent Cogent Syndicated retirement report from Escalent.

Reducing retirement plan costs is a core focus for 50% of defined contribution plan sponsors with more than $100 million in plan assets, according to Escalent’s Retirement Planscape report released June 30. That’s up from 35% from the same survey in 2021, showing increases in both cost pressure and in focus on better provider performance, according to Sonia Davis, the report’s lead author and a senior product director at Escalent.

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“One of the key takeaways in this year’s research is that cost reduction is now a universal endeavor across all 401(k) plan sponsors,” Davis says. “It’s not just among the more micro-plan sponsors.”

In a survey of 1,353 plan sponsors conducted in February and March, 19% said they were “not at all confident” in the stability of the global economy, an increase from 12% in 2021, according to the report. When researchers asked plan sponsors about their “biggest pain points,” the top concern was evaluating their 401(k) plan, according to Davis.

“That is a sign that both firms and the intermediaries have yet to provide sufficient support in helping [plan sponsors] evaluate and help them understand what is going on,” she says. “Plan sponsors don’t want to be caught off guard; they want to be sure they are doing what’s best for their participants.”

Retirement plan committees “are getting more scrutiny from their executive committees,” Davis says, including having to define and explain costs and administration of their retirement benefits. Transparency and education from plan advisers can be a key asset for clients as they navigate these meetings, according to Davis.

“The more plan sponsors are informed and the more they understand the fees, the better off everyone is,” she says. “Advisers are being vetted by their ability to be transparent.”

Some of the larger plan sponsors may want to send requests for proposal to recordkeepers and third-party plan administrators to gauge the market and return with price negotiating power, something with which plan advisers can assist, Davis notes.

The Escalent survey also found that plan sponsors are more aware of digital 401(k) plan providers than in the past: The firm found that the proportion of plan sponsors who are unaware of digital recordkeepers decreased to 39% this year from 52% last year.

Five of nine digital providers evaluated also increased their brand awareness over the year, Davis says, citing ShareBuilder 401k, 401k Easy, Vestwell Holdings Inc., Ubiquity Retirement + Savings and Guideline Inc.

The biggest draw for plan sponsors considering digital recordkeepers are better cost structures (43%), according to the report. The next biggest draws are better digital capabilities (36%), easier participant onboarding (34%), better payroll integration (33%) and  innovative technological platforms (31%).

“They are getting on some of these plan sponsors’ radars,” Davis says. “How much of a threat they can be [to legacy recordkeepers] is still kind of TBD, but the fact that large and mega plans are aware of them is something that more of the established firms definitely need to take note of.”

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