Heather Lavallee: And I would keep in mind, when you think about Wealth beyond the flow story is really the strong organic growth story. You saw in this quarter, we gave you the participant growth. So, we’ve continued to drive participants. We’ve driven plan counts. We’ve driven asset growth. We’ve all done it organically and it really also goes back to the revenue diversification of this business. We’ve been able to navigate very different macro environments over a long period of time. And finally is the free cash flow contribution from this business is significant towards that $800 million of capital we expect to generate in the year.
Operator: Our next question is from Wilma Burdis with Raymond James. Please proceed.
Wilma Burdis: Hey, good morning. Most of my questions have been answered, but just one quick one. Could you please discuss the upcoming $400 million debt maturity in February 2025? We understand you have $400 million of excess capital, which could help address this. But could you walk us how you would think about the potential financial impacts of refinancing versus paying down? Thank you.
Don Templin: Sure, Wilma. As you have rightly noted, we have $400 million — approximately $400 million of debt maturing in the early part of 2025. We are currently evaluating how we’ll handle that maturity, but I guess I might offer up, we have considerable optionality and flexibility to manage that situation. Our balance sheet is well-positioned. Our leverage ratio is 28%. And as you know, our target is 25% to 30%. So, we’re comfortably in that range. And as you also noted, we are generating — consistently generating capital and have $400 million of excess capital. So, we’ve not yet made a decision on how we’re going to move forward, but I think we have a lot of good flexibility there. We expect to have more certainty around that plan in the next coming quarters and would communicate it to you at that time.
But I think that we sit from a position of strength right now and feel good that we will be able to make a decision around that debt that isn’t forced on us, but that we get to choose the pathway.
Wilma Burdis: Just a quick follow-up, if I can, is, would pausing share repurchases be on the table or no?
Don Templin: We’ve committed this year to returning $800 million of capital to shareholders. And so that commitment in my view is steadfast.
Operator: Our next question is from Suneet Kamath with Jefferies. Please proceed.
Suneet Kamath: Thanks. Good morning. I think on the fourth quarter call, you had talked about some additional expenses in Wealth Solutions. And it looked like the expense discipline this quarter, kind of was pretty visible. So, were you able to make those investments and just offset it with cost savings elsewhere, or are those investments sort of still in front of us?
Heather Lavallee: Yeah, Suneet, thanks for the question. It’s Heather, I’ll take that. So, a couple of things. As you know, we’ve got a long track record of being disciplined about expenses and we took meaningful expense actions in the quarter across our businesses while still being able to invest in the business. The way that I would think about those is, Rob was able to do some things in terms of combining the teams across the workplace. That is allowing us to achieve some expenses. We continue to take advantage of Voya India more broadly across our businesses, which is quite meaningful, but I’ll turn it to Don to add some additional color on the expenses, but this is something that is a strong muscle for us and something we’re going to continue to lean into from time to time.
Don Templin: Yes. As Heather mentioned, this is a strong muscle for us. We did lean in 2024. And I would say that we have a track record of taking significant expenses out of the business. So — but that doesn’t keep us from continuously trying to reduce expenses and be very thoughtful and disciplined around that. I would put sort of the expense reductions in a few categories maybe. One is optimizing our operating model. So, we think it’s appropriate for us to look at our operating model. We have had some significant divestitures over the last several years. And so, we are very focused on making sure that the back office and the systems that we have in place to support the new business as it’s been repositioned is appropriate.
The second area where we’ve been very focused is around driving expense synergies. So, we obviously had the AllianzGI transaction and the Benefitfocus transaction and both the teams in IM and in Health are driving real meaningful reductions in expenses there. We’re leveraging actions that we’ve taken in the past to drive incremental value. So, Heather mentioned India, Voya India, we took full ownership of that and we’re seeing the real benefits of that. And then finally, maybe I’d mention that we’re ongoing — we have ongoing optimization of our real estate footprint and that’s also been benefiting us and been reflected in the reduction in expenses.
Heather Lavallee: And Suneet, just to close the question I didn’t answer upfront is we did make the appropriate investments as expected.
Suneet Kamath: Got it. Okay. That’s helpful. And then, I guess, on the Wealth side, can you just unpack the participant withdrawals and kind of what’s going on there? It seems like we’ve been talking about that for the past couple of quarters. Are these folks that are at retirement age that just kept the money in the 401(k) plan previously and now are moving it elsewhere? If we get some color on that? And then, is there any meaningful difference in terms of these participant withdrawal trends between the 401(k) business as well as the tax-exempt business?
