VoiceOver: Welcome to The Wave Strength. Innovative solutions for a secure retirement presented by Pacific Life.

Jim Breen: Hello everyone. And welcome to another episode of The Wave Strength podcast series. I'm your host, Jim Breen, head of marketing with Pacific Life's institutional business team. Today in the studio with us is Maya Pillai.

Jim Breen: Maya, thank you so much for coming out and joining us today for another episode.

Maya T. Pillai: Yeah, thank you for having me.

Jim Breen: Absolutely. Maya, you are the Assistant Vice President and head of the stable value program. I want to talk to you today, in this episode, about stable value. Help our listeners and our viewers understand what stable value is.

Jim Breen: Pacific Life's long term commitment to the stable value space and the makeup of the team that you are currently a part of. But before we get into that, let's share a little bit about your background, Maya. You've been in the industry for quite some time and I'd love to learn more and help our viewers and listeners understand more about your background.

Maya T. Pillai: Yeah, no appreciate the opportunity to talk through it. I've worked at Pacific Life now for six years. In the stable on the stable value team in some capacity, and now I lead the stable value team, but I do have 15 years in the industry as well. So I've worked stable value has been my lifelong career.

Jim Breen: Fantastic. Wonderful. Before we go into our focus on, what Pacific Life and your team is doing in the stable value market for those joining us today, Maya, that perhaps are unfamiliar with stable value. And what it does and how it helps individuals. Perhaps you can provide a little education like a little one on one course, if you will, about stable value.

Maya T. Pillai: Sure. One of the, one of the big things with any investment option or any investment really is that people tend to think it's very complicated. When you look at your retirement plan, there's going to be many options that you can choose from. stable value is among those options. What stable value is, to answer your question, is a principal protected.

Maya T. Pillai: Which just means what every dollar you put in, you get your dollar back when you want to take it out. It's a principle protected option within your 401k or we say 401k, but a qualified plan. That's a whole host of them depending on what type of industry you work in.

Jim Breen: Okay, wonderful. And something that has been around for some time also.

Maya T. Pillai: It absolutely has since the 70s in some form after ERISA was passed. But at Pacific Life, 31 years. And what we do at Pacific Life with respect to this particular option, which is the one thing I did forget to say was it's made up of bonds instead of stocks. Those are the two items that you get, you might be.

Maya T. Pillai: be familiar with. So the bond side, so it's called fixed income. Is that they that we are doing the insurance part of that product that allows it to have principal protection or that dollar and you get the dollar out later.

Jim Breen: Oh, wonderful. Okay, great. So that's a great recap of stable value and helping hopefully folks joining us who have heard about it before.

Jim Breen: are or are unfamiliar, bringing them up to speed. So with that, let's dive in a little bit and talk about your role currently with Pacific Life. And you, as you mentioned, you've been here six years at the company, however, 15 in the industry. So you have a long standing experience, a very familiar entity within the market.

Jim Breen: Let's talk about your role at Pacific Life and maybe just walk us through what You know, the makeup of your team and how you're leading stable value at the moment.

Maya T. Pillai: Sure. So I became the head of stable value wrap in May of 22. And it's, so we're almost the two year mark, which is crazy to think about.

Maya T. Pillai: And I lead a team of three other individuals, and then there are four other individuals who support us and the stable value team. So there's eight of us strong. It's made up of my product folks as well as contracts and operations and compliance. And all four of those. Different entities essentially make up the whole team and really support everything that we do on a day to day basis.

Jim Breen: Okay. And your stable value team lies within Pacific Life's institutional business team. And that team now four years old very new for a company that has over 155 years of strength and stability in the marketplace. But, it, that's a big deal, right? And obviously a commitment from Pacific Life.

Jim Breen: That hey, this is an important part of what we do. We see an opportunity to put a lot of resources and focus on this product line. So here we have this institutional business unit. We have stable value is one of those, several opportunities and business lines within this institutional space.

Jim Breen: And recently, stable value has moved into the global institutional investment group headed by Joe Krum under Brian Woolfolk. So perhaps you can talk a little bit about this global institutional investment group and how stable value fits into that team.

Maya T. Pillai: Yeah, that's a great intro for sure. I think that one of the things that's nice about the institutional division is we have been able to really think through what, where teams belong, where the business lines belong, and stable value does fit very well within the global institutional investment group because it's complementary to the other products that we're aligned with, which is HSA and capital markets.

Maya T. Pillai: So those three things go they work in tandem with one another, but at the same time they're complimentary because typically when we see growth in one, we might see a little pause in the other, but also the other way around. So we were very flexible in, that way. As far as the Other ways of looking at the institutional division and really GIG, which is the group that I'm part of now it's really making sure that we have the alignment and the support across the, folks that assist and make sure that we get where we're going.

Jim Breen: And that, support is definitely there. I think, again, Pacific Life, it's not common that, Pacific Life will create a unique division within the company. And so for Pacific Life to create this institutional business team, and, have that those resources that focus on these important business lines, stable value included is really a testament to Pacific Life's commitment to the stable value market.

Jim Breen: And also to this, growth, right? As we progress as this, institutional team, Grows and progresses the opportunity to put even more visibility as we see now with the stable value team in the global institutional investment group. So thanks for explaining that and unpacking that for us.

Maya T. Pillai: Yeah, no, it's and just to add to what you just said.

Maya T. Pillai: I think the best part about The commitment that Pacific Life has made in forming this division, which is still very new in that it's, it is four years, but that is new for a company that's over 150 years is that we are getting support up the line. And that's the most important thing for a stable value insurance provider is to make sure we have that longstanding commitment.

Jim Breen: Absolutely. Almost like a startup with a safety net.

Maya T. Pillai: Yes. That's a good way of putting it.

Jim Breen: Let's talk a little bit about, the market in general, and I know it's a tight community, and as you and I have talked about offline the very tight community, everybody knows one another, and maybe you could share a little bit about that, that, that community and the, market in general.

Maya T. Pillai: Absolutely. So the, community of the stable value, we're all part or most of us are part of an organization called the stable value investment association, SBIA is how I typically refer to it. So with SBIA, we've got number of member firms and they're longstanding, long committed firms that we partner with and the way that institutions in, in, that we work with in stable value and certainly Pacific Life works with.

Maya T. Pillai: need all these partnerships in order to make this product work. What isn't known about stable value is that it's about 10 percent of the overall defined contribution market. People haven't heard of stable value before, and it's 10 percent of the defined contribution market. So it's, crazy to think that statistic goes unknown, but it's a good one to know about.

Maya T. Pillai: So what that also translates to just to keep answering that question is we're almost a trillion dollars in total, and that represents general account products, which is not what Pacific Life does and then wrapped products, which is what Pacific Life does. Our commitment, like you said, 31 years. But also longstanding with respect to how, many partnerships we've maintained during that time as well.

Jim Breen: That's, important. What you just said Looking at those 31 years Pacific Life's commitment to the, stable value market since really the set, was it 70, 72,

Maya T. Pillai: 74 ERISA. Yeah.

Jim Breen: Okay. And, Here we have such a large opportunity in that market, right? And you are right. A lot of people may not know what stable value is.

Jim Breen: And so it's great that we have this opportunity for you on the show. Hopefully folks watching are, getting that educational opportunity to learn more about it. And Maya, looking into the future we don't have the crystal ball, but let's talk about the commitment of your team and what your team is doing really to continue to solidify that commitment to the market.

Maya T. Pillai: Sure. So one of the big things we just rolled into 2024 and what we're looking to do. Our team. Specifically, is looking to become more efficient and more effective at the things we're already doing well. Because with a 31 year track history, we have built great processes. We've got great, we know who our business partners are.

Maya T. Pillai: We know how to serve them. We want to do it better. And while better is a elusive term, you never know what that might mean. It, really does come down to responding quicker, making sure we've got. Things buttoned up and really focusing on do we have the right people in the right places and do we need more resources and what other resources might we need?

Maya T. Pillai: So we really do focus on what can be done quote unquote better

Jim Breen: Looking into the future. I mean do you see Anything that could possibly be something to keep an eye on as you look down the road?

Maya T. Pillai: Yeah, so great question, because this past year was a significant headwind for stable value and the industry altogether.

Maya T. Pillai: I will say that during COVID 2020, the industry increased by almost 15%. The next year, we stagnated a little bit. And then in 2022, Russia's war on Ukraine eventually also increased the stable value assets. We had, we Pacific Life had exactly the same experience. We had a big surge, we had a little bit of flat, and then we had a little bit more.

Maya T. Pillai: And then now, unfortunately, in 2023, it was significant headwinds. Those headwinds were because of rising interest rates, which the Fed was doing. Every month, every other, every quarter for sure, and making other investment options within a retirement plan, or even just with your high yield savings account with associated with your bank account more attractive.

Maya T. Pillai: So people weren't necessarily putting money into stable value and the individuals that might be looking to put their money into stable value are those individuals who are nearing retirement, typically a conservative. It's, considered a conservative option, but also the individuals who might be investing would be conservative investors who are nearing retirement so that they have that principal protection, which we talked about before.

Jim Breen: Excellent. Let's talk a little we're talking a little bit about the headwinds and looking back but looking even more into the future, what are some hopes that Maya has?

Maya T. Pillai: That's a, great question. And I think it's sometimes what keeps me up at night because I really want to make sure that stable value remains an asset class within the defined contribution market.

Maya T. Pillai: But I also want to make sure that we're positioning ourselves. Sometimes we not just stable value Pacific Life, but. stable value as an industry, is, focusing on making sure we're accessible across markets. One of the developments within stable value as an industry was that we now are, we now get to play in 529 plans.

Maya T. Pillai: 529 plans are educational savings plans. As you look at the children you might have, or as one looks at the children they might have, how can we save for their college education, or trade school, or it's a very broad term now, yeah

Maya T. Pillai: But how can we save to make sure that our children are taken care of as well?

Maya T. Pillai: And not for retirement, but for their education. I think I think it becomes a, the SVIA in particular is focused on making sure that we're where we should be and how can we also grow this pie a little bit. And I actually just joined the board of directors for the SVIA. And so my term starts, started a few days ago and thank you.

Maya T. Pillai: And so I'll be representing Pacific Life within the stable value investment association, but also really driving forward with, within within the industry as well.

Jim Breen: Excellent. Talk to us a little bit about 529s you brought that up a moment ago do you see the 529 maybe more, focus as, your role you have greater visibility with, your role perhaps, do you see 529s in the market is popularity?

Jim Breen: Do you see more awareness a need for education about how they are important?

Maya T. Pillai: So that's a, great question because. I think that folks are just realizing that these are tools and these are programs that are accessible to them and I say the people anyone, all of us, anyone who has a nephew, a niece, a child of their own it's an opportunity to save and typically varying states and varying programs have tax incentives or There, there just might be good opportunities to, to spend the time to, to figure out what that might look like for you as an individual on behalf of your kids or again, nieces, nephews, whomever it might be. As.

Jim Breen: Somebody like me who has five children.

Maya T. Pillai: Correct. You should be thinking about a 529 for sure for all of them and, be encouraging of everyone you know to be contributing as well.

Jim Breen: Absolutely.

Maya T. Pillai: But I, would say that. Where stable value comes in is that less than 50 percent of 529 plans have access to stable value.

Jim Breen: Okay.

Maya T. Pillai: While I am not necessarily as a RAP provider or a RAP insurer, the, people that the, 529 programs are coming to talk to directly, we now have a significant presence and have been trying to have a more relevant presence within the 529 community. So you will see Pacific Life at 529 conferences because we want to make sure we're accessible to, to educate The plan program sponsors to on what stable value is and really why it's an important.

Maya T. Pillai: It's an important investment option to offer within those programs.

Jim Breen: Great. Thanks for sharing that information about the 529 and also Maya just stable value in general taking time to join us on the show coming out to California to be with us today. I really appreciate that. So thanks for joining us.

Maya T. Pillai: Thank you so much for having me.

Jim Breen: Absolutely. Maya. And to our audience, I want to thank you for joining us on another episode of The Wave Strength. And I want to encourage you to head over to YouTube, Spotify, and audible, and don't forget to hit and subscribe so that you can stay current with new content from our team.

Jim Breen: Have a great day, everybody. And thanks again for joining us.

VoiceOver: This has been another episode of The Wave Strength presented by Pacific Life. Don't forget to catch us on YouTube and make sure to subscribe. Although this podcast is presented by Pacific Life, the opinions and views expressed are those of the hosts and participants and do not necessarily reflect Pacific Life's views on any of the topics discussed.

VoiceOver: Unless otherwise noted, Pacific Life is unaffiliated with any other individual or company mentioned. Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance or investment products. Pacific Life, its affiliates, its distributors, and respective representatives do not provide any employer sponsored qualified plan administrative services or impartial advice about investments and do not act in a fiduciary capacity for any plan.

VoiceOver: Pacific Life refers to Pacific Life Insurance Company and its subsidiary Pacific Life Annuity Company. Insurance products can be issued in all states except New York by Pacific Life Insurance Company and in all states by Pacific Life Annuity Company. Product availability and features may vary by state.

VoiceOver: Each insurance company is solely responsible for the financial obligations accruing under the products it issues. Pacific Life stable value is a group annuity contract issued by Pacific Life Insurance Company, Newport Beach, California. Pacific Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do this material has been provided for informational purposes only. It is not an offer or solicitation to buy an insurance product or security. This material should not be construed as investment advice or be used as a primary basis for any investment decisions. This material has been prepared for by institutional, sophisticated, and or qualified investors.

VoiceOver: This material may not be shared, distributed, or in any way otherwise reproduced. This podcast was recorded on January 10th, 2024.

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