Deals & People April 23, 2021

Retirement Industry People Moves

Commonwealth Financial selects new SVP of general counsel; SVP joins Mesirow Private Equity; head of Vanguard Fixed Income Group to retire; and more.

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Art by Subin Yang

Art by Subin Yang

Commonwealth Financial Selects New SVP of General Counsel 

Commonwealth Financial Network has hired Peggy Ho as senior vice president, general counsel. She will replace outgoing general counsel Jim Adelman, who is slated to retire after nearly 17 years with the firm.

Ho will oversee all legal and regulatory aspects of the firm. Her role will include advising the executive management team on strategic initiatives and regulatory issues and providing counsel on all legal-related issues within the investment adviser and broker/dealer (B/D) entities. She will report to Trap Kloman, Commonwealth’s president and chief operating officer (COO).

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“I’m truly excited to be joining such a talented, enthusiastic community and am honored to take the reins and lead Commonwealth’s legal team,” says Ho. “Our industry has changed so much in recent years from a regulatory perspective. Jim and his team have done a terrific job addressing these changes and have really put Commonwealth in a strong position for the future.”

“We are thrilled to welcome Peggy to the Commonwealth community,” says Kloman. “Peggy joins us with a wealth of experience that includes compliance, legal, risk management and government advocacy. In the ever-evolving regulatory landscape in our industry, we will rely heavily on her knowledge and insights to move our firm forward.”

Ho graduated from Harvard University, magna cum laude, and received her law degree and master’s degree in international relations from Georgetown University. She began her career as a corporate associate at Ropes & Gray LLP and has worked at LPL Financial as executive vice president, chief of staff for compliance, legal and risk and head of government relations.

Ho serves on the boards of the Insured Retirement Institute (IRI), The New England Council, Greater Boston Legal Services and the Asian American Lawyers Association of Massachusetts. In 2019, Ho received the Massachusetts Lawyers Weekly Top Women in Law Award and was named a Get Konnected! 50 Most Influential Attorneys of Color.

SVP Joins Mesirow Private Equity

Mesirow has announced that Bradley Karelitz has joined Mesirow Private Equity as senior vice president.

In this new role, Karelitz will focus on business development and fundraising for the firm’s private equity products, inclusive of primary partnership investments, secondary investments and co-investments.

Karelitz joins Mesirow after serving as vice president, investor relations at HarbourVest, where he focused on coordinating, monitoring and enhancing relationships with new and existing investors, as well as investment consultants. Prior to that, Karelitz held sales, business development and relationship management roles at Columbia Threadneedle Investments.

“We are excited to welcome Brad to the team as we look to serve a growing set of sophisticated investors around the world,” says Marc Sacks, chief executive officer of Mesirow Private Equity. “Brad’s experience developing relationships with private equity investors and their consultants will enable us to extend our reach and provide further value to our investors.”

“Mesirow Private Equity has a reputation for consistently identifying high-performing private equity investment opportunities, longstanding relationships with some of the world’s leading private equity firms and a deep commitment to client service,” Karelitz says. “I look forward to contributing to the team’s continued growth.”  

Karelitz received a bachelor’s degree in managerial economics from Union College in 2008.

Head of Vanguard Fixed Income Group to Retire

Vanguard has announced that John Hollyer, principal and global head of Vanguard Fixed Income Group, will retire at the end of June. Sara Devereux, who currently serves as global head of rates, will succeed Hollyer at the helm of the fixed income team. 

Hollyer joined Vanguard in 1989 and was named global head of fixed income in 2017. During his tenure, he served as a fixed income and money market portfolio manager and, prior to his current role, led the investment risk management group. As a tenured Vanguard investment leader, he has served on the firm’s Global Investment Committee since 2017 and currently chairs the senior investment strategy team for Vanguard’s actively managed fixed income portfolios. 

Devereux brings more than 20 years in investment experience to her new role. She was named Vanguard’s global head of rates in 2019, when she joined the firm from Goldman Sachs, where she spent two decades specializing in mortgage-backed securities and structured products.

Devereux has a bachelor’s degree in mathematics from the University of North Carolina at Chapel Hill and a master’s degree in business administration from The Wharton School of the University of Pennsylvania.

37 Capital COO to Become Head of Putnam Institutional 

Putnam Investments has announced that Kaitlin M. May will assume the role of head of Putnam Global Institutional Management (PGIM) effective July 1, upon the retirement of Jeffrey L. Gould. 

May, who is chief operating officer (COO) of 37 Capital, Putnam’s alternatives business, will be responsible for overseeing the firm’s institutional asset management business, which serves investors and clients in North America, Europe, Asia and Australia. Based in Boston, she will report directly to Putnam CEO Robert L. Reynolds and serve on the firm’s operating committee. 

“Kaitlin is a talented, thoughtful leader with deep industry knowledge and experience serving global clients,” Reynolds says. “As an organization, we see tremendous opportunity to build upon the meaningful progress and momentum that we have seen in our institutional business in recent years—and are excited about the vision and passion that Kaitlin will bring in addressing client needs around the globe.”

May will continue her responsibilities for 37 Capital and will additionally oversee Putnam’s Japan business and the firm’s institutional affiliates business. 

In discussing Gould’s retirement, Reynolds says, “Throughout his 23 years at Putnam, Jeff has been an outstanding leader and ambassador with all of the firm’s key stakeholders. One of the true hallmarks of his tenure has been always placing the client first. We wish him the very best in his future endeavors.”

Reynolds says May will work closely with Gould in the coming weeks to ensure a seamless leadership transition.

 

Compliance April 23, 2021

The Different Approaches to Expanding Retirement Plan Access

Already, state-run plans, PEPs and moves to expand access to SIMPLE plans are making a difference, experts say.

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In Voya’s latest thought leadership insight, “Hope for the Future: The Opportunity for Transformative Enhancement of Retirement Plans,” the firm says leaders in the retirement plan industry are optimistic that legislation and serious commitment on the part of employers will expand the availability of workplace retirement plans.

“Despite expected headwinds of economic challenges and societal turmoil, the panelists strongly suggest that we may see significant progress made in retirement plans by 2030,” Voya says in its report. “Survey respondents believe this progress will be supported by a combination of factors, including technological advancements, legislative initiatives and greater employer commitment. Many feel these factors will play a key role in expanding access to plans and engaging more employees.”

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Expanded coverage is certainly needed in this country, experts agree. The Georgetown University Center for Retirement Initiatives estimates there are 57 million private sector workers, or 46% of the population working in the private sector, who do not have access to a retirement plan through their workplace. Georgetown says this is particularly true for workers at small businesses and among lower-income workers, younger workers, minorities and women.

To expand the availability of workplace retirement plans, different entities are taking different approaches.

A dozen states are running state-run retirement plans, and Oklahoma state lawmakers have been the latest to introduce bills in both chambers of the legislature that would create a state-run retirement program for employers that do not offer a retirement plan.

Like the other state plans, it would enroll participants in automatic enrollment, payroll-deduction individual retirement accounts (IRAs). Also like other state-run programs, the initiative is aimed at small employers; the Oklahoma bill proposes requiring employers with at least 10 workers and that have been in business for two years or longer to make the state-run plan available to their workers.

Then there is the promise of the pooled employer plans (PEPs), made available beginning January 1 through the Setting Every Community Up for Retirement Enhancement (SECURE) Act.

Micah DiSalvo, chief revenue officer at American Trust, says he expects that once sponsors and advisers realize how greatly PEPs can expand coverage, their acceptance will take off.

“They will drive access and efficiencies for smaller plans and give them access to some of the institutional services typically only available among larger plans,” DeSalvo says. “We expect advisers, recordkeepers and third-party administrators [TPAs] will pay increasing attention to PEPs—and that the adoption will look like a hockey stick over time. A big part of what is going to drive this adoption is the fact that 51% of workers at private companies don’t have access to a retirement plan.”

In fact, some retirement plan executives say that as PEPs become more universal, it will become a fiduciary duty for retirement plan advisers and sponsors to weigh the pros and cons of entering a PEP or going with a single-employer plan.

There’s also an onslaught of legislation that would expand retirement plan coverage.

Just this past week, Senators Susan Collins, R-Maine, and Mark Warner, D-Virginia, introduced the SIMPLE Plan Modernization Act to provide greater flexibility and access to small businesses and their employees seeking to use a SIMPLE [savings incentive match plan for employees] plan as a retirement savings option.

Congress established SIMPLE retirement plans through the Small Business Job Protection Act of 1996 to encourage small businesses to provide their employees with retirement plans. They’re available to businesses with 100 or fewer employees, as long as they do not have another employer-sponsored retirement plan.

Also this past week, U.S. Senators Collins; Maggie Hassan, D-New Hampshire; James Lankford, R-Oklahoma; and Michael Bennet, D-Colorado, presented the Military Spouses Retirement Security Act, a bipartisan bill that would help spouses of active-duty service members save for retirement by increasing their access to employer-sponsored retirement plans.

Under the act, small employers—with 100 employees or fewer—would be eligible for a tax credit of up to $500 per year per military spouse. It would be available for three years per military spouse, and the credit amount would be equal to $200 per military spouse, plus 100% of all employer contributions for that spouse, up to $300.

Likewise, in 2019, U.S. Senator Sheldon Whitehouse, D-Rhode Island, introduced the “Automatic IRA Act of 2019,” which would require employers that do not provide another qualified retirement plan and that have more than 10 employees to enroll workers automatically in an auto-IRA. Those employers in states that already have state-run retirement plan would be exempt.

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