The country’s largest auto IRA program is looking for a new ESG fund provider. Late last week, CalSavers issued a request for proposals, seeking to fill a spot on its investment menu that is likely being vacated by the BNY Mellon Sustainable Balanced Fund. The state-run program did not specify why that investment option is being replaced and noted it could end up retaining the fund if certain conditions are met.
“Due to circumstances outside the board’s control, and unrelated to the merits of the fund, CalSavers’ existing ESG option may not be available by the end of 2022,” the program stated in the February 18 announcement.
“In the event the current ESG manager can continue to provide the current fund for CalSavers participants, the board may choose to cancel the solicitation that launched today.”
The spot on the investment menu could be a spot coveted by fund providers. Although CalSavers is relatively small for a retirement plan that covers many of the small-business workers in the state, it is still young and is on a fast trajectory for growth.
The program represented more than $177 million among more than 226,000 accounts as of the end of January, according to data from Georgetown University’s Center for Retirement Initiatives. CalSavers became available statewide in July 2019 to more than 7 million workers who did not have employer-sponsored retirement plans at the time. Last year, the state began requiring all businesses with more than 50 employees to register, meaning their workers would be automatically enrolled, unless the companies already provide retirement plans. By the end of June 2022, it will implement its final wave of mandatory coverage, requiring businesses with five or more workers to participate. The final wave will add an expected 268,000 small businesses to the program, up from the current number of about 11,300, according to the state.
The incumbent fund is subadvised by BNY affiliate Newton Investment Management and represents $582,000 of the auto IRA’s assets. Participation in the investment option is much lower than in the program’s target-date option, into which workers are defaulted.
The deadline for submitting bids to the state is March 25. It will select a new fund manager, unless the incumbent is retained, on May 24.
Relationships are key to our business but advisors are often slow to engage in specific activities designed to foster them.
Whichever path you go down, act now while you're still in control.
Pro-bitcoin professionals, however, say the cryptocurrency has ushered in change.
“LPL has evolved significantly over the last decade and still wants to scale up,” says one industry executive.
Survey findings from the Nationwide Retirement Institute offers pearls of planning wisdom from 60- to 65-year-olds, as well as insights into concerns.
Streamline your outreach with Aidentified's AI-driven solutions
This season’s market volatility: Positioning for rate relief, income growth and the AI rebound
