Deals & People July 16, 2014

Prudential Names Head of Multi-Asset Class Solutions

Prudential Investment Management has named Michael Schlachter as the head of its multi-asset class solutions group.
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The newly formed group will leverage the breadth of Prudential’s asset management capabilities across public and private fixed income, equities, real estate and alternatives to help investors solve issues around asset allocation, portfolio construction, dynamic de-risking and hedging. The group will serve institutional clients around the world.

“Our clients increasingly ask for our expertise to develop strategies across their portfolios that will enable them to achieve long-term objectives and absolute risk-adjusted performance,” says David Hunt, CEO of Prudential Investment Management, based in Newark, New Jersey. “Michael’s deep industry experience and understanding of our clients is invaluable as he leads the effort to create holistic investment solutions in collaboration with each of our asset management businesses.”

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Schlachter joins Prudential from Wilshire Associates, where he was most recently a managing director and lead consultant to multinational corporations, state governments and federal agencies, with an emphasis on asset allocation, risk and liability management, and portfolio structuring.

Schlachter joined Wilshire in 1999 and moved through a wide range of roles that included providing asset-allocation analysis and investment structuring for clients. He also has experience helping plan sponsors develop long-term strategic investment policies. Before Wilshire, he worked as a financial analyst at Goldman Sachs.

Schlachter holds a charted financial analyst designation and has an M.B.A. from the University of Chicago. He earned his bachelor’s degree in politics and economics from Princeton University.

Prudential Investment Management’s businesses offer a range of investment solutions for retail and institutional investors around the world across all asset classes. More information about the firm can be found at http://www.investmentmanagement.prudential.com.

Data & Research July 16, 2014

Participants Favor Automatic Annual Increase

Fifty-five percent of retirement plan participants favor automatic annual increases to their account contributions.
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“With non-stop family, health and life events and changing financial obligations over the course of one’s life, saving for retirement can easily fall to the bottom of the priority list,” says Marsha Whitehead, vice president of retirement services marketing for OneAmerica, the parent company of American United Life Insurance, which recently published a survey report on automatic plan design features. “Automatic features can help plan participants easily increase their retirement contributions and not get distracted by other financial matters.”

The survey asked workplace retirement investors to rank the financial priorities that compete most with their retirement account contributions. According to the survey, the four most pressing concerns are paying off debt (29%), meeting day-to-day expenses (23%), taking care of family (11%) and saving for college (4%). The research suggests many plan sponsors cite these factors in their resistance to auto-feature implementation—despite a growing body of research highlighting participants’ favorable attitudes towards automatic plan design tools (see “The Plan Sponsors Auto-Feature Paradox”).

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About three in 10 (29%) respondents said they are unsure how they feel about auto-increase, also known as auto-escalation, and 19% said they would opt out of the feature. “We still have work to do to educate consumers about the importance of calculating how much retirement income they need and contributing enough to their retirement accounts to meet those needs,” Whitehead adds.

Automatically increasing the contribution amount each year helps address inflation and cost-of-living increases, she says. “When auto-increase is coupled with educational tools and materials, a feature like this can really help participants stay focused and disciplined in planning and saving for retirement,” Whitehead suggests.

A summary of OneAmerica’s participant survey can be viewed here.

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