Margaret (Peggy) Santhouse joined John Hancock Retirement Plan Services as vice president of national accounts for mid-market distribution relationships.
Santhouse is tasked with increasing John Hancock product
distribution among consulting firms, financial advisory organizations and
independent registered investment advisers (RIAs).
Santhouse reports to George Revoir, senior vice president of
distribution, in the new role. She has over 15 years of experience in financial
and retirement planning services and worked most recently as vice president of
national distribution and relationship management at a mid-market provider,
where she led a team of account managers in developing distribution
relationships with consultants and advisers.
A graduate of the College of the Holy Cross in Worcester, Massachusetts, Santhouse is a member of the Retirement Advisor Council and the
Women in Pensions Network, among other affiliations.
The analysis, “Employers Finding More Reasons to De-Risk
Retirement Plans,” observes how improvements in the funding status of DB plans
are prompting DB plan sponsors and fiduciaries to take steps that will reduce
future volatility in plan costs. To achieve this reduction, liabilities are
being moved out of the plan and sponsors are aligning investment allocations
more closely with plan liabilities.
“For nearly six years, defined benefit plan sponsors have
been nervously watching their funding ratios in the wake of the financial
crisis. Now that they are closing back in on being fully funded again, many
want to take steps so this never happens to them again,” say Jerry Levy and
Marjorie Martin, authors of the analysis.
The reasons most often cited as the underlying rationale for
de-risking efforts include:
Funded
status improvements. These may have triggered an increase in
fixed-income allocation or the development of a hedging portfolio based on
glide path strategies. When it comes to investment strategies, experts
recommend that plan committees review the thinking behind why a glide path
was set up, since significant downturn events are still not entirely out
of the realm of possibility.
Current
certainty versus the unknown. Even if the plan is in a position
to pay lump sums or purchase annuities, it may be tempting to wait for
interest rates to go higher and push those costs down. However, for plans
that have moved heavily into fixed income, there may be no advantage to
waiting. In terms of investment strategies, the analysis suggests adding a
dual trigger to the glide path based on interest rate levels to ease into
a hedging portfolio over time.
Premiums
for the Pension Benefit Guaranty Corporation (PBGC) increasing. DB
plan sponsors with underfunded plans pay additional risk premiums, which
have increased since 2013. The analysis points out that a dynamic asset
allocation approach will not reduce the premium cost immediately, but that
an increase in funded status will reduce the PBGC premium costs over time.
Avoiding
one-time accounting charges. Lump-sum cashouts may trigger
one-time settlement charges sooner rather than later, so if a plan pursues
a cashout strategy, this needs to be kept in mind.
The analysis also mentions guidance offered by the
Department of Labor, derived from testimony and recommendations from its 2013
ERISA Advisory Council, which could have applications for de-risking
strategies. A summary of this guidance can be found here.
Levy
and Martin conclude that DB plan sponsors need to carefully weigh the options
they have to de-risk their plans. A copy of the Buck Consultants analysis can
be downloaded here.