Stable Times

SVIA Nsltr_6_A 6/30/14 5:08 PM Page 1 STABLE TIMES The publication of the Stable Value Investment Association Volume 18, Issue 1 • First Half 2014 Making Retirement The 2014 Elections and IN THIS ISSUE Income Security Work What Will They Mean Making Retirement Income By Randy Myers By Randy Myers Security Work By Randy Myers ....................................1 Stable Value Investment Association Chair- Could a Republican takeover of the U.S. Sen- man James King is proud to be part of the ate make it easier for President Obama to get The 2014 Elections and stable value industry. “It is an important asset things done? Republican businesswoman What Will They Mean class, and it’s part of the fabric of defined Gwendolyn King, president of the Podium By Randy Myers ....................................1 contribution plans,” he said as he welcomed Prose speakers bureau and a former Social his industry colleagues to the SVIA’s 2014 Security commissioner, thinks it’s possible. A Predictable Surprise: Spring Seminar in April. “We should be proud The Unraveling of the U.S. of being stewards of stable value, and of Republicans already control the House. Con- Retirement System bringing it to retirement plans in the Ameri- ventional wisdom posits that gaining a lock on By Randy Myers ....................................1 can workplace.” both chambers of Congress would make it even more difficult for President Obama to Outlook and Trends in King, also managing director and senior client carry out his agenda in the final years of his Defined Contribution Plans portfolio manager in the Stable Value Markets second term. By Randy Myers ....................................4 Group at Prudential Financial, isn’t alone in Gwendolyn King isn’t so sure. Addressing the The Quest to Expand the having good feelings about the industry in 2014 SVIA Spring Seminar, Mrs. King said Use—and Value—of Defined which he works and the products it delivers. that if the GOP takes the Senate, Obama Contribution Plans Last year, the SVIA polled 29 firms that have been providing stable value products consis- could indeed wield his veto pen regularly, ex- By Randy Myers ....................................5 tently since 2007. By year-end 2013 those tending the political gridlock that has gripped Washington. Or he could move toward the Stable Value and Target-Date firms had $702 billion in stable value assets center of the political spectrum in a bid to find Funds: Experience and under management, representing about 12 common ground with Republicans, move Opportunity percent of the total assets in defined-contribution retirement savings plans. That was up some key legislative initiatives forward, and By Randy Myers ....................................6 from just over $459 billion at year-end 2007. develop his legacy. Expanding Stable Value’s Reach That’s solid growth, and it demonstrates that That sort of compromise isn’t impossible, By Randy Myers ....................................7 retirement plan participants see a lot of value King insisted. “Bill Clinton, even when he New Wrap Capacity Offers More Opportunity for Growth … continued on page 2 continued on page 3 and Competition By Randy Myers ....................................9 A Predictable Surprise: Stable Value Managers See The Unraveling of the U.S. Retirement System More Flexibility on Investment By Randy Myers Guidelines By Randy Myers ..................................10 If you think it’s harder for the average American to build a financially secure retirement today than it was a few decades ago, you’re probably right. But the usually cited culprits—the ongo- ing demise of the defined benefit pension plan, the failure by many individuals to adequately Mark your calendars! fund their defined contribution plans—aren’t solely to blame. So too, says Sylvester Schieber, is the shaky state of the Social Security system, which will pay most Baby Boomers less than On Monday, September 15th, they put into the system. the nomination process to fill five The Pre- (four service firm & Schieber is a former chairman of the Social Security Advisory Board and the author of board seats dictable Surprise: The Unraveling of the U.S. Retirement System one plan sponsor) (Oxford University Press, will begin. those running 2012). Speaking in April at the 2014 SVIA Spring Seminar, Schieber noted that an average earn- Even for a second s. ing single male retiring in 1975 at the age of 65 could expect to collect, on average, $108,838 term will need nomination continued on page 2 SVIA Nsltr_6_A 6/30/14 5:08 PM Page 3 Save the date: SVIA National Fall Forum, October 13-15, 2014 in Washington, DC 3 First Half 2014 STABLE TIMES The 2014 Elections Gwendolyn King is President of Podium Prose, a speakers bureau and speechwrit- continued from page 1 ing service, in Washington, DC. Prior to her launch of the company, Mrs. King was was impeached by the Republicans, found a Senior Vice President of Corporate and Public Affairs for PECO Energy Company way to work out a budget deal and to do re- (formerly Philadelphia Electric Company) from 1992 until her retirement in February 1998. From 1989 to 1992, she served as the 11th Commissioner of the Social Secu- form on Welfare,” she said. “It happened with rity Administration under President George H. W. Bush. Mrs. King was appointed by George Bush as well. And it happened with President Ronald Reagan as Deputy Assistant and Director of Intergovernmental Af- Ronald Reagan when he and Tip O’Neil got fairs at the White House from 1986 to 1988. While there, she was appointed to the Advisory Commis- together and worked out a budget deal and sion on Intergovernmental Relations, the Interagency Committee on Women’s Business Enterprise, and reform of Social Security.” later, the Board for International Food and Agricultural Development. She was appointed by President Bill Clinton to the Commission on the Social Security Notch Issue, and by President George W. Bush to King said she thinks it is “almost a slam dunk” the Presidential Commission to Strengthen Social Security. Prior to her Presidential appointments, Mrs. that Republicans will win majority control of King directed the Pennsylvania Governor’s Washington, D.C. office for six years, following her service as the Senate this year, although she conceded senior legislative assistant to US Senator John Heinz (R-PA). Mrs. King was a Founding Partner of The that the party has found ways to lose seem- Directors’ Council. She is a director of Lockheed Martin Corporation and Monsanto Company, and ended 12 years of service on the board of Marsh and McLennan Companies in May 2011. She served ingly winnable elections in the recent past. for six years as director of the National Association of Corporate Directors, from 2004-2010. She is a . trustee of the Barnes Foundation in Philadelphia, PA Colbert King, a Democrat, Pulitzer-Prize-win- Washington Post ning columnist and Gwen- dolyn King’s husband, isn’t convinced that his ate, Gwendolyn King said, immigration reform difference can be summed up in one word: party is about to relinquish the reins of the could be the most likely starting point for com- polarization. Senate. Joining her on the SVIA stage, he re- promise. “That’s an issue where both sides minded his audience that “in politics, want to do something,” she said. “Republicans “Even during issues of civil rights, issues of overnight is a lifetime. The way things look recognize they are demographically chal- war and peace, Washington still managed to today may not be the way things will become lenged. We simply are losing the battle for engage in political battles without bringing the [in] November.” While Republicans have voters, and have to bring more women and house down,” he said. “Not today. Now the been hammering Democrats over the new minorities into our ranks. How is that going to aim is not only to win but also to vanquish the healthcare law, for example, King noted that happen? Certainly not with the large Latino competition—to grind your opponent into the more than eight million people have signed population in the United States—unless ground. The biggest question today in Wash- up for health insurance under the law and something is done on immigration. ington is not whether the Dodd-Frank Act is that public sentiment seems to be shifting in working or should be changed, it’s not Ukraine favor of President Obama’s signature legisla- “On the other hand,” she continued, “there’s a or peace in the Middle East or raising the min- tive accomplishment. “It has a growing num- legitimate question of why should we (Repub- imum wage or the Keystone pipeline. The ber of supporters, which tends to neutralize licans) do something on immigration reform if question is whether Republicans can take the opposition that Republicans would mount all those people come in under amnesty and control of the Senate and retain control of the against it,” King said. He also noted that it’s get citizenship and then vote Democratic?” House. [This issue] informs almost everything impossible to predict what might happen in done in Washington these days, including the countries outside the U.S. between now and That sort of calculus hints at what’s been political behavior we see. Washington political the November midterms that could alter the keeping Washington politics mired in gridlock strategists want to know only one thing: Will prospects for either party. for the past several years. The nation’s capi- what we do mobilize or discourage our politi- tal today is a far cry from what it was in cal base?” Assuming Republicans do prevail in the Sen- decades past, Colbert King said, and the key Colbert King predicted that no overarching issues are likely to determine the outcome of Colbert I.

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