2017 Industry Innovation Awards

Defined Contribution

FCA, US

Bob Watson, Assistant Treasurer and Chief Investment Officer
(Auburn Hills, Michigan)

Art by Chris Buzelli

Bob Watson is a 32-year veteran of FCA US. He tells CIO that a passion for cars brought him to the business straight out of school, and even though he works on the finance side, having watched the automaker evolve over the past three decades keeps him excited about the company.

“I like to be involved with what’s happening,” he says. “After this many years with the company, people know me. When they see me in the hallway they say ‘I hope you guys are doing a good job, because I’m going to need your help to retire.’ It keeps you focused, invested.”

That passion for continuous improvement has raised Watson’s profile among his peers, driving him to the top of the defined contribution (DC) list in the eighth annual CIO Innovators Awards.

During his tenure at FCA US, Watson and the finance team have worked through a lot of changes within the company—and in markets. Watson credits the integrated culture at FCA US for much of the success of the company’s retirement program. “Rather than being siloed away, we work closely across teams and we have a lot of support from the HR group; it helps us drive change and education in the company,” Watson says.

With that support system in place, Watson has been able to manage the company’s shift to DC plans. Since 2013, the finance team has led a complete transformation of the DC platform at FCA US to refine investment options, lower fees, and improve diversification. The upgrade was no small task — with the help of the HR team, 55,000 employees at FCA US were re-enrolled into the new system. “We spent time offering training sessions and following up with people, there were hundreds of hours of change management. In the end, we have a platform that is intended to provide a better outcome for our employees, and that is something we are really proud of,” Watson says.  After re-enrollment, the expected return of the assets increased by approximately 45 basis points because of improved diversification and the fact that every asset class in the line-up had the same or lower fees.

The new platform offers a revised mix of active and passive investments through a white label structure. Watson adds that it was important for FCA to offer a menu of investment options that participants could more easily understand. In addition, the team reduced the number of investment options to gain efficiencies of scale and optimized fund structures, setting up separately managed accounts, where possible, in order to keep costs low.

“We also hired a fiduciary to build a Target Date Fund glide path customized for FCA employees to help us get to where we wanted to be,” Watson adds.

Big platform updates like FCA US’s aren’t easy to execute and Watson hopes to share lessons he learned along the way. He says that innovation is becoming increasingly important to help employees with retirement security. Watson speaks regularly with his industry peers gathering information and sharing lessons learned. “It’s important to see what you can learn from others in your industry,” he says. “No one can be sure what the future will bring. But I think many of the investment structures and products available now will serve FCA employees well into the future.” —Bailey McCann

Defined Contribution Finalists

  1. Australian Catholic Superannuation
    Michael Block
  2. Nestlé USA
    Karin Brodbeck
  3. Caterpillar
    Jill Harlan
  4. Prudential
    Gail Maytin
  • Kim LewFoundation
  • Tom JoyEndowment
  • Brian ReedCorporate Defined Benefit Pension Plan Below $5 Billion
  • Elisabeth BourquiCorporate Defined Benefit Pension Plan Above $5 Billion
  • Matt ClarkPublic Defined Benefit Plan Below $15 Billion
  • Vijoy ChattergyPublic Defined Benefit Plan ($15 Billion - $100 Billion)
  • Scott EvansPublic Defined Benefit Plan Above $100 Billion
  • David HolmgrenHealthcare
  • Bob WatsonDefined Contribution
  • Raphael ArndtSovereign Wealth Fund
  • Jagdeep BachherESG
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