Product & Service Launches – 10/24/24

Morgan Stanley fund lands $2B in capital commitments; Transamerica managed advice available for contractors PEP; OneDigital launches new benefits platform; and more.

Morgan Stanley Closes Private Markets Fund With $2B Committed

Morgan Stanley Investment Management has secured $2 billion in committed capital for its new North Haven Tactical Value II Fund LP.

The fund invests in credit, hybrid investments and non-controlling equity investments across sectors and geographical regions. The capital raise drew both institutional and qualified individuals and is nearly 50% more of a raise than its predecessor fund, NHTV I, the firm noted.

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Thomas Cahill and Pedro Teixeira, co-heads of Morgan Stanley’s tactical value investing, billed the fund as being “a highly diversified portfolio of uncorrelated investments unconstrained by the narrower mandates of traditional private equity or private credit strategies.”

Gainbridge Non-Tax-Deferred Annuities Available at RetireOne

Annuity seller Gainbridge, a Group 1001 company, has partnered with distributor RetireOne to offer Gainbridge’s annuities to registered investment advisers.

RIAs can now access through RetireOne two Gainbridge high-yield, multi-year guaranteed annuity products, Fastbreak and SteadyPace. The firms noted in the announcement that RetireOne is the “first outsourced insurance desk” to offer non-tax-deferred annuity products.

“Gainbridge Life offers multi-year guaranteed annuity products that are a game-changer for our advisor network,” RetireOne President Jeff Cusack said in a statement. “With SteadyPace and FastBreak, our clients can access some of the highest yields in the industry, coupled with the security and principal protection they expect.”

FastBreak and SteadyPace have fixed rates as high as 5.50% annual percentage yield, according to the firms.

Transamerica’s Managed Advice Now Available to Contractor’s PEP

Transamerica Corp. announced its managed advice offering will be the exclusive offering to the Contractors Plan, a $2 billion pooled employer plan administering retirement benefits to nearly 1,500 employers and more than 64,500 workers.

The offering comes through an expanded partnership between Transamerica and third-party administrator Fringe Benefit Group Inc., which is administering the PEP. Through the expanded partnership, FBG will offer to plan participants Transamerica’s managed account offering that includes a multilingual website, retirement planning tools and a menu of investment options for their retirement plans.

“We are excited to expand this collaboration, leveraging our pooled plan capabilities as a scalable and efficient model for new plan growth,” Darren Zino, Transamerica’s head of retirement distribution, said in a statement. “We will lean into FBG and The Contractors Plan’s incredible network to enable us to expand retirement plans and service offerings to even more hardworking Americans.”

FBG has a history of creating benefit programs for government contractors, restaurants, retail and staffing companies.

OneDigital Launches New Benefits Platform

OneDigital has brought a new, all-in-one benefits platform to market for employers.

The offering, Impact Studio, gives employers a platform to track and manage total spending on health and benefits, retirement, wages and salaries. It also “maximizes employer spending by aligning investment to benchmarking and employee value,” according to the announcement.

OneDigital touted the new system’s ability to help benefits managers with employee turnover and clear messaging and administration of employee offerings to attract and retain talent.


“By integrating medical, ancillary, stop loss and retirement benchmarking tools with other functionalities such as claims utilization and employee value perception insights, Impact Studio gives OneDigital consultants and their clients greater visibility into their benefits programs, enabling the ability to control costs and drive impact for their employees,” the firm wrote in the announcement.

ERISA Advisory Council Homes In on 4 QDIA Recs

The council is considering recommendations to the DOL on default decumulation options. 

The 2024 Advisory Council on Employee Welfare and Pension Benefit Plans, commonly known as the ERISA Advisory Council, met on Tuesday in a public, virtual meeting to discuss, in part, lifetime income and qualified default investment alternatives, including annuities.

The council, a 15-member panel selected by the secretary of labor, is working on potential recommendations to send to the Department of Labor on what it deemed earlier this year as important topics for plans and participants. In the meeting, members discussed takeaways from testimony it heard in September regarding QDIAs and lifetime income—many of which appeared to favor the use of annuities to create guaranteed retirement income for participants.

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Council members also discussed the potential benefits of annuities; stumbling blocks to both the products and plan sponsor implementation; and, finally, four proposed recommendations for the DOL.

The four draft recommendations below received significant back-and-forth among members, with no firm conclusions drawn. But for plan fiduciaries, the below areas show the council’s early thinking in terms of QDIA requests and recommendations it may send to the DOL. 

Decumulation Guidance 

The first recommendation, which received the most discussion, was for the DOL to create sub-regulatory guidance in the form of a “tips” document for selecting decumulation options inside or outside of a QDIA. Jack Towarnicky, a council member and a counsel at Koehler Fitzgerald LLC, compared it to 2013 DOL sub-regulatory guidance on target-date funds in ERISA plans. 

The guidance, or “road map,” would need to include the criteria a plan fiduciary should consider when reviewing decumulation options, along with general principles drawn from past court rulings on fiduciary litigation. Towarnicky pointed out that, even if the DOL provides this guidance, courts could ultimately disagree, and each case would depend on the “facts and circumstances.” 

“What we are really focusing in on is: … What is the process the plan sponsor or plan investment fiduciary should follow when selecting that decumulation option? So that we’re not basically held to what was the actual result or outcome other than the ongoing duty to monitor,” he said. 

A few members of the council, however, voiced concern about how the tips would be framed and the scope of requirements put on the fiduciary. 

Council member Jeffrey Lewis, a partner in Keller Rohrback LLP, said he felt the document could be made similar to the DOL’s Interpretative Bulletin 95-1, which addresses selection of an annuity provider under the Employee Retirement Income Security Act. 

“It looks at things that need to be taken into account … as far as all the things that make these [annuities] complicated, and it should be left there,” he said.

QDIA Guidance and Education

The second draft recommendation called on the DOL to provide guidance to plan sponsors and fiduciaries to “improve participant education, notices, transparency, and disclosure” for QDIA investments, including accumulation, transition and decumulation, either in or outside of the QDIA. 

“This proposal is intended to address numerous comments and testimony regarding the financial literacy … [regarding] QDIA investments,” said Towarnicky, of Koehler Fitzgerald. “We believe there needs to be more education specifically on QDIAs. Participants typically do not look beyond the notices that they receive, if they even read those notices.” 

Automatic Rollover Safe Harbor 

The third proposal was for the DOL to amend the safe harbor for automatic rollovers to individual retirement accounts, aligning it with the safe harbor for QDIAs. The recommendation would allow a safe harbor for fiduciaries to make investment decisions on funds that can be forced out of a retirement plan into an IRA—which, after the SECURE 2.0 Act of 2022, were boosted to $7,000 from the previous $5,000. 

“What we are recommending is that the automatic rollovers, which are typically involuntary … align better with the QDIA safe harbor that we have in 404c-5,” Towarnicky said, referring to the DOL QDIA safe harbor regulation.

He pointed to research showing that participants often fail to adjust their investments when shifted from a plan with a QDIA investment into a cash preservation option in an IRA—meaning many participants leave their investments for long periods of time in what are often lower-growth options.

“What we are suggesting here is that the safe harbor should be amended so that the safe harbor [for plan sponsors] applies if the assets are rolled into something that meets the definition of a QDIA that has a growth component,” explained Holly Verdeyen, a partner in and the U.S. defined contribution leader at Mercer, who is also a council member. 

Actual Knowledge

The final recommendation the council considered was for the DOL to confirm the documentation needed to ensure participants have “actual knowledge” of the QDIA investments into which they are allocated, even if the QDIA includes decumulation options such as annuities. The guidance would, in turn, help to “reduce fiduciary concerns about belated, aged claims” concerning QDIAs, according to the draft proposal. 

“Here you have the situation where people don’t read the notices that we send them, and so there’s no process where we can be reasonably comfortable that folks understand the investments that we default them into,” Towarnicky said.

O’Brien, of AFSCME, argued that the recommendation should actually be part of the second proposal related to improved disclosures and notice to participants of what is in their QDIA. He said he saw the recommendation as looking to protect fiduciaries from litigation, and he would not ultimately support it.

“Let’s be direct about what this is,” he said. “This is to make it easier to block lawsuits alleging fiduciary breaches—that’s what the purpose of this is.” 

Lewis, of Keller Rohrback, agreed with O’Brien’s assessment that the recommendation is intended to limit lawsuits, which is not in line with ERISA, and that he would not support it in its current form. He went on to say it “might be palatable” if it was changed to “something that required better disclosures” of the products and lifetime income options in the QDIA.

“I would support that kind of a recommendation,” he said. “Then leave it to the courts to decide whether the disclosures in the particular case constituted ‘actual knowledge’ or not.” 

The ERISA Advisory Council will meet again in a public, online session later this year. 

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