NTWD RP

Part
01
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Part
01

Voya Company Overview

Voya Financial, a New York Stock Exchange traded company previously known as ING, is a retirement, investment, and insurance company serving approximately 13.6 million individual and institutional customers in the United States as of December 31, 2016. Voya's 2016 fiscal year results concluded with a loss of $428 million or ($2.13) per share. The Chairman and CEO of Voya is Rodney O. Martin, Jr., who has been with the company since 2011. Although Voya has favorable relationships with the Wall Street financial community and is well financed, the company consistently receives negative feedback from consumers and is ranked behind its competitors in online customer reviews.

FINANCIALS

The most recent available data is provided by the Voya Financial quarterly operating report, filed with the United States Securities and Exchange Commission (SEC) on November 1, 2017. Per the quarterly report, Voya earned $2.55 billion in revenues during Q3 2017, resulting in net income of $148.6 million to common shareholders. The most recent available annual report was filed by Voya Financial on February 23, 2017, for the fiscal year ending December 31, 2016. Voya's 2016 operations concluded with revenues of $10.8 billion, vs. expenses of $11.4 billion, resulting in a loss of $428 million or ($2.13) per share. The company had $541 billion in total assets under management as of September 30, 2017. According to Yahoo Finance, Voya's stock performance has been positive during the past year, increasing from a price of $40.88 on February 6, 2017, to $51.34 on February 2, 2018. The current market capitalization of Voya is $9.228 billion. Bloomberg reports the company has historically operated in five business segments: Retirement, Investment Management, Annuities, Individual Life, and Employee Benefits.

Voya Financial rose sharply in trading on December 21, 2017, when the company announced it would dispose of certain risky assets while returning proceeds to shareholders. By selling its Closed Block Variable Annuity (CBVA) and individual fixed and fixed indexed annuity businesses, Voya received about $1.1 billion in value, $500 million of which the company reported would be "immediately deployable," while disposing of $54 billion in "volatile insurance obligations." Voya's CEO explained that the sale would allow Voya to return focus to investment management, retirement, and employee benefits as three core business segments, generating 80% of future company earnings. Shortly thereafter, Bloomberg reported that American International Group (AIG) had recently been in discussions to buy Voya Financial for more than $10 billion before the potential deal fell apart in price negotiations.

Voya appears to maintain favorable relationships with Wall Street. In August 2017, a prestigious financial newspaper, Barron's, featured an article about Voya, stating in a bold headline that "Voya Financial is reducing risk and growing its core financial-services business. The shares could be worth at least 30% more." And Voya has demonstrated good access to capital by executing substantial financing transactions. On January 18, 2018, Voya announced it priced $350 million of 4.7% Junior Subordinated notes in a new sale of corporate debt. Interestingly, proceeds from the note sale were used to repay other, previously-existing company debts.

CORPORATE LEADERSHIP

The Chairman and Chief Executive Officer of Voya Financial is Mr. Rodney Owen Martin Jr., age 65. Mr. Martin has been with Voya since 2011 and has more than 40 years of "high-profile experience" in the financial services and retirement industries. His executive bio cites achievements such as an improvement of 400 basis points in Ongoing Business Adjusted Operating Return on Equity, returning excess capital of $3.4 billion to shareholders, and leading Voya through its successful IPO on the New York Stock Exchange in May 2013. Per the bio, the Voya IPO was among the best-performing IPOs of the year. Martin previously served 10 years in "roles of increasing responsibility" at insurer American International Group (AIG) and was CEO of American General Life Companies prior to its 2001 acquisition by AIG.

Voya Financial's Chief Financial Officer is Michael S. Smith, who has been with the company since 2009. He previously served in roles as CEO of Insurance Solutions and Chief Risk Officer (CRO) at Voya. Prior to joining Voya, he held leadership positions at Lincoln Financial Group.

Amongst leadership profiles on the Voya Financial corporate website, a common theme among executive bios is prior employment with American International Group (AIG), Federal Home Loan Mortgage Corporation (“Freddie Mac”), ING, and Wall Street firms. Three CEO positions are listed, in the business segments of Investment Management, Annuities and Individual Life, and Retirement. Research indicates the company has signaled an internal culture of performance, integrity, and inclusion.

Voya has demonstrated a substantial willingness to invest in marketing initiatives, citing diversity within the organization as a competitive advantage. AdAge reported a $100 million marketing campaign intended to teach consumers about saving for retirement while introducing its Voya brand to Americans. The campaign featured celebrities Jesse Tyler Ferguson of "Modern Family", and Allison Janney, of "West Wing". In the article, Voya's Chief Marketing Officer, Ann Glover, stated, "The whole goal is to get Voya talked about. . . We wanted to tap into America's love of celebrities to draw interest to the brand."

LITIGATION

According to an industry report, Voya was involved in litigation in 2017, when the company was accused of charging excessive fees to a small 401(k) plan. According to the lawsuit, Voya charged 36 times more than the reasonable amount, to a plan with 19 participants and $2.8 million in assets. The lawsuit has proposed an expansion to class-action status, potentially reaching thousands of participants and hundreds of millions of dollars in assets. See: Patrico v. Voya Financial, Inc., et al (USDC SDNY, No. 1:16-cv-07070) (filed September 9, 2016)

Voya litigation also includes a class action in which a participant in a 403(b) Plan seeks to represent a class of plans whose assets are invested in Voya Retirement Insurance and Annuity Company Group Annuity Contract Stable Value Funds. In the lawsuit, it was alleged that Voya has violated the Employee Retirement Income Security Act of 1974 by charging unreasonable fees and setting its own compensation in connection with stable value products. See: Dezelan v. Voya Retirement Insurance and Annuity Company (USDC District of Connecticut, No. 3:16-cv-1251) (filed July 26, 2016)

PUBLICITY AND OPINION

Voya Financial has received negative feedback from customers on online review websites. At the time our research was conducted, Voya was ranked by a total of 90 customers with an average of one star out of five available stars at ConsumerAffairs. At review site BestCompany, Voya was ranked by 22 customers with an average of one star out of five available stars. Financial review website NerdWallet rates Voya as the "No. 14 best life insurance company out of 18 considered." The company’s overall customer satisfaction index score from J.D. Power placed it at 14th among 21 life insurers.

CONCLUSION

Voya Financial is a substantial participant in the market for investment management, retirement, and employee benefits services in the United States. Five years after selling shares in a spin-off from Dutch multinational, ING Group, the company is still investing heavily to make its brand known to consumers in the U.S. while ranking behind competitors in customer reviews. It is clear the company enjoys favorable relationships with Wall Street due to a reported 100% institutional share ownership structure and the successful corporate restructuring transactions including asset sales and debt financings. With experienced senior leadership, several years of favorable stock price performance, and ample cash on hand, the company is positioned to improve its product offerings and brand perception among consumers.

Part
02
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Part
02

Voya - Retirement Planning Deep Dive

Voya offers different retirement plans to individuals as well as small businesses. These plans include the 401k, IRA, SEP IRA, simple IRA, One Participant 401k and the 403b. Voya serves over 47,000 workplace retirement plans for over 5 million participants, and is well-received, ranking 6th in the Top 10 Small Business 401(k) Providers.

RETIREMENT PLANS OFFERED
Voya offers a variety of retirement plans for individuals as well as small businesses. The 401k is the one available to most individuals and businesses. With a 401k, contributions are taken from employee’s paychecks in amounts ranging from $18,000 to $24,000 per year based on age. Employees are also given the option to purchase investments such as stocks and mutual funds to aid in the building of a long-term retirement portfolio.
Voya also offers Individual Retirement Accounts (IRA) for individuals who don’t have access to a retirement plan through their employer. IRAs all an individual to contribute $5,500 to $6,500 per year to their plan based on age. IRAs also allow for the purchase of stocks and mutual funds to aid in the building of a retirement portfolio.
Voya also offers retirement plans suitable for freelancers. There are 2 plans offered, the One-Participant 401k and the IRA. The One Participant 401k, also known as an Individual 401k, is particularly suited for freelancers and small businesses that don’t have full-time employees. Maximum contributions could be as high as $53,000 per year based on employer/employee contribution as well as age. The IRA is the standard plan offered and provides the opportunity to have an IRA in addition to a One-Participant 401k.
Voya also offers plans designed for small business owners — the SEP IRA and the Simple IRA. The SEP IRA (Simplified Employee Pension Plan) is designed for those who are self-employed, either as a sole proprietor or as a partner, with or without employees, regardless of business size. Business owners can contribute to retirement funds as well as offer retirement plans to employees. The Simple IRA is for companies with no more than 100 employees. Coverage for all employees is required, making it attractive for potential employees. The Simple IRA gives the employer 2 options for contribution. They can either match employee contribution up to 3%, or they can opt for a fixed contribution of 2% of their employee’s salary.
Voya also offers a retirement plan for teachers. The 403b plan is designed for teachers in public schools as well as teachers in tax-exempt private schools. Non-profit employees and self-employed ministers are also included in this plan’s availability. Contributions of $18,000 to $24,000 per year are allowed, based on age. Employers can make matching contributions and employees have the option of choosing additional investments.
PARTICIPANTS
Voya serves over 47,000 workplace retirement plans for over 5 million participants. Voya’s target market for workplace retirement plans includes those who are self-employed, small businesses, and employees of small companies.
CUSTOMERS WON OR LOST
As of 2016, Voya’s retirement operating earnings were up $143 million from $137 million in 2015. Key earnings drivers include a comparison of retirement net inflows at $803 million in comparison to $557 million in 2015. The third quarter of 2016 showed net inflows in the amount of $1.4 billion. Net flows vary greatly from one quarter to the next. Retirement AUM saw a rise from $120 billion to $121 billion as of September 2016. Overall, the increases in the above-listed income support an increase in new and returning customers.
CONSUMER SENTIMENT
In 2017, Voya ranked 6th in the Top 10 Small Business 401(k) Providers for plans under $10 million in assets. Nationwide and Empower were ranked lower than Voya, in positions 8 and 9 respectively, leading to the assumption that consumers were more predisposed to Voya than either Nationwide or Empower. However, for the 401k plans ranging between $10 million and $100 million in assets, Empower was ranked 3rd while Voya was still ranked 6th, supporting the assumption that customers were more predisposed to Empower than Voya in this asset bracket.
LEADERSHIP
Charles P. Nelson is the Chief Executive Officer of Retirement for Voya. A graduate of Whitman College, Mr. Nelson oversees both Tax-Exempt and Corporate Markets as well as Retail Wealth Management. Mr. Nelson has over 30 years of experience in the retirement industry. And was the second most influential player in the 401(k) market (Wire 2012).
VOYA COMPETITIVE ADVANTAGE
Voya puts the needs of their customers first. They help the customer to consider retirement in a different manner, helping them to see a bright future with assured financial security. Voya considers the unique needs of each individual, treating their customers like people, not numbers.
NEGATIVE REPORTING
In 2017, accusations were made against Voya and a lawsuit was filed for charging excessive administrative and record-keeping fees to a small 401k plan. The fees increased yearly from $30,790 in 2014 to $34,568 in 2015. The lawsuit was filed on September 9th, 2017.
CONCLUSION
Voya has an eye for their customers and a firm grasp of the retirement plan needs of both employers and employees. With the sound leadership of Charles P. Nelson, Voya has seen a steady rise in income and assets, with 37% of income being generated from retirement plans as of 2017.
Sources
Sources