In The News

“For NEPC’s Sarah Samuels, giving back doesn’t just mean working with endowments and foundations at her day job.

Samuels, a partner at investment consulting and OCIO firm NEPC, is also working to improve financial literacy among children with a book that came out on April 16 called Braving Our Savings.

The book follows a little girl who wants to buy something she doesn’t have enough money for. Along the way, she learns lessons about delayed gratification, investments, and the downside of making decisions based on what her friends say. Samuels’s goal is to make investing more visible to young children who may not have role models knowledgeable about finance.”

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Samuels had grown up in a small town with a family that lived paycheck to paycheck. “That generations-long cycle of fear of money and institutions went back as far as anyone can remember,” Samuels said. “It’s very tough to break that cycle. That’s why I feel so grateful for this industry and the people who helped me and have seen the power of spreading knowledge and being a role model.”

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All the book’s proceeds will be used to buy books to donate to children in need. Samuels herself is donating 2,500 books, and NEPC, for its part, has committed to buying her books for all its employees. The firm has also donated copies to Boston’s branch of the Boys and Girls Club and other local nonprofits.

As a part of the launch, Samuels is partnering with professional athletes including Patriots cornerback Jonathan Jones to distribute books to children.

“They manage multibillion-dollar pension funds and portfolios for top asset management firms and work closely with clients across the nation as investment advisers, to describe just a few of their careers.

But the 20 women recently honored as trailblazers by the Chicago chapter of the National Association of Securities Professionals share one common mission: improving diversity in the financial services industry.”

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“These women are not only trailblazers in their careers, but they are using — and have used — their platform and their reach to encourage diversity in our industry,” said DeAnna Ingram Jones, a consultant at NEPC and president of the Chicago NASP chapter. “As these women lay this foundation for diversity, what we hope is that all the next generation of diverse financial professionals find their perfect self in our our industry,” she added.

“Surging stock and bond markets propelled record keepers’ record performance last year, but what can the industry do for an encore?

Consultants and researchers acknowledged the markets’ impact last year boosted assets under administration, but they said record keepers will need more consistent sources of future growth.

They predict more consolidation among record keepers, more educating sponsors to adopt auto enrollment, greater emphasis on keeping participants’ assets in plans and accelerated efforts in pursuing startup and smaller DC plans.”

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“The M&A game isn’t over,” said Bill Ryan, partner and defined contribution team leader at NEPC. “I wouldn’t be surprised if three of the top 15 record keepers are acquired in the next 18 months.” He didn’t offer names.

“Organic growth for participants will be modest,” he added. Among the top 15 record keepers by participants in the latest annual Pensions & Investments survey, for example, five had headcounts that were down or flat from the previous survey.

Among record keepers responding to the P&I survey, almost all had higher assets under administration in 2023, but Ryan said he believes this thin-margin business will take its toll on some providers as competition causes a continued whittling of record-keeping fees.

“Asset managers and consultants are closely watching how the U.S. presidential election could impact renewable energy investing.

Those with a focus on the sector are trying to discern whether politics around, and specific economic incentives borne out of, the Inflation Reduction Act and its myriad tax credits for clean energy will change after the November election.”

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Regardless of what happens in November, managers and consultants who focus on renewables and infrastructure broadly said they are bullish on its future.

While a Trump win would be a shift for energy sector, “infrastructure as a whole has had a lot of bipartisan support, so I would be surprised if there weren’t good opportunities in infra going forward, and it’s hard to deny that no matter who’s in power,” said Larissa Davy, senior investment director of real assets at NEPC.

Her colleague Matt Ritter, partner and head of real assets Investments at NEPC, said the potential political and regulatory risk is something the firm is taking into account in its underwriting.

“The strategies that we’re recommending and looking at we believe are viable even if there were to be political or regulatory change,” Ritter said. “That’s not to say necessarily that every asset out there is in the same position, but we’re very focused on strategies that are not reliant on those subsidies or those sorts of programs to be viable.”

Even if the IRA tax credits were rolled back under a second Trump administration or Republican Congress, there are still viable investments in the renewable space, according to Davy.

“A fund investing today in renewable power is not going to suddenly not be profitable if Trump was to win this year going forward,” she said. “Over the long term that could change, but certainly that would have to be a consistent repeal of some of these types of policy agreements, like the IRA, over a 10-year term.”

Mikaylee O’Connor has joined investment consultant NEPC as principal and head of defined contribution solutions effective April 1, succeeding partner Bill Ryan who has been promoted to defined contribution team leader, a new position.

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At NEPC, “I will be delving more into marketplace solutions,” she said. “I will be more directly involved with clients.”

She identified retirement income solutions, the impact of technology on plan management and plan governance as three areas of interest. Technology, for example, can be used to “better customize solutions” and can “improve participant engagement and outcomes,” she said.

Mikaylee O’Connor has joined investment consultant NEPC as principal and head of defined contribution solutions, the firm announced.

O’Connor will lead NEPC’s defined contribution practice and also oversee its defined contribution plan trends research and data analytics, guiding strategic initiatives related to managed accounts, retirement income solutions, target date funds and other investments, according to the firm.

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“As a team, we are focused on helping our clients navigate and lead the discussion around issues relating to retirement income,” [Bill] Ryan said, in a statement. “Mikaylee’s extensive experience and deep expertise working with a diverse client set will position NEPC to continue identifying innovative solutions that help alleviate those concerns.”

NEPC has $1.6 billion in assets under management and advisement, according to the firm.

Despite benefiting from regulatory and commercial advances designed to make in-plan retirement solutions more attractive, defined contribution executives continue to wrestle with concerns about cost and complexity as well as compatibility among employers and record keepers.

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To consultant William Ryan, the solution to an in-plan solution is hiding in plain sight: a target date series with a systematic distribution of assets upon retirement.

Ryan is a partner and head of defined contribution plan solutions at NEPC, which recently released an annual survey on DC plan trends and fees showing that people over 65 hold 45% of their assets in target-date funds. Among that age group, 68% have retired or left their employers.

“Unfortunately, only 26% have activated systematic distributions, but 26% is wildly greater than the 4% to 5% who annuitize,” Ryan said.

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The words “retirement income” or “lifetime income” are subject to different interpretations, Ryan added. To NEPC, the words retirement income simply mean “getting money out of the plan to fund a paycheck,” he said. “It doesn’t need to mean guaranteed and it probably shouldn’t mean guarantee, insured, or annuity.”

However, “lifetime income” has become a synonym for “guaranteed income” — words that are “creatively interchanged by insurance companies,” he said.

“This is why we at NEPC think the industry has communicated the success and objective of retirement income very wrong,” Ryan added. “The narrative has become hyperfocused on needing to add commercial insurance to DC plans, when most participants are entitled to government retirement insurance via Social Security, and some get employer retirement insurance via a pension plan.”