Deals and People September 11, 2015

Retirement Industry People Moves

Promotions in the Index funds division at LGIMA.
Reported by

Chad Rakvin, head of U.S. Index Funds at Legal & General Investment Management America Inc. (LGIMA), has been promoted to global head of index funds.

In his expanded role Rakvin will oversee the global index business, which encompasses the Chicago, London and Hong Kong teams, managing more than $470 billion of index assets. Rakvin will report to Aaron Meder, head of Investment, Legal & General Investment Management (LGIM), and will be based in London. Rakvin joined LGIMA in 2013 from Northern Trust Global Investments, where he was global equity index director. Since joining LGIMA, he has led the U.S. index fund management business, and has performed a pivotal role in establishing the foundation for growth of this business.

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Shaun Murphy, director of Index Funds, has been promoted to head of U.S. Index Funds. Murphy joined LGIMA in 2013 from Northern Trust Global Investments, where he was head of international index equities. He has worked alongside Rakvin for 11 years, helping build LGIMA’s index business. He was instrumental in constructing and launching the Legal & General Collective Investment Trust. The LGIMA index team now manages $64 billion in index assets.

Robert Moore, chief executive of LGIMA, cited Rakvin’s leadership and industry expertise as instrumental in developing and growing the firm’s index business; and Murphy’s expertise and enthusiasm for the business as key elements in a smooth transition.

LGIMA is a Chicago-based investment adviser specializing in index, fixed-income and liability driven investment (LDI) strategies for the U.S. institutional market.
Benefits September 11, 2015

Employer Tactics Delay ACA Cost Impact

Many employers, particularly small to mid-size, are still delaying the effects of the ACA by delaying renewal dates.
Reported by

Employers in states that allowed “grandmothering”—the extension of non-Patient Protection and Affordable Care Act (ACA)-compliant plans—are now seeing proposed health plan rate increases of 11%, on average, according to the 2015 United Benefit Advisors Health Plan Survey.

Many employers, particularly small to mid-size, are still delaying the effects of the ACA by delaying renewal dates. Seventy-three percent of plans in the survey have a renewal date on or after December 1, 65.4% of which were small businesses in the fewer than 100 employee market. Employers in the less than 50 employee market saw a 2.1% increase in renewals after December 1, 2015, compared to 2014. On average, employers this year saw only a modest 2.4% increase in annual health plan cost per employee.

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“These delay tactics continue a trend of employers avoiding becoming ACA-compliant, but relief runs out starting next year and permanently ends in late 2017,” warns Carol Taylor, chairwoman of the UBA Client Compliance Solutions Committee and a benefits advisor with D & S Agency, a Virginia-based insurance firm and UBA Partner. “Small employers, in particular, need to stay aware of the costs under a compliant plan heading into 2018 and the potential for exceeding the thresholds for the Cadillac Tax.”                                                      

According to the survey, the average annual health plan cost per employee for all plans in 2015 is $9,736, a 2.4% increase from the previous year; employees picked up $3,333 of that cost, while employers covering the balance of $6,403.

NEXT: Employer health plan offerings

Among all employers surveyed, more than half (53.7%) offer only one health plan choice to employees, and 28.7% offer two choices. As far as plan choices, preferred provider organizations (PPOs) continue to dominate the market (46.8% of plans offered, and 54.8% of employees enrolled), and health maintenance organization (HMO) plans continue to decrease, as they've done since 2012 when they accounted for 19.1% of the market but now account for only 17.3%. Consumer-directed health plans (CDHPs) continue to show the greatest increase in growth, up 10% from 2012 through 2015.

The average premium for all employer-sponsored plans was $509 for single coverage and $1,211 for family coverage. One-fifth (20.6%) of all plans required no employee contribution for single coverage (a 5.1% decrease since 2014), and 7.3% required no contribution for family coverage (a 3.9% decrease since 2014).               

For plans requiring contributions, employees contributed an average of $140 for single coverage and $540 for family coverage, which is only a slight increase from 2014 results—3.7% and 5.5%, respectively.

Most employers (72.5%) define full-time work as 30 hours per week, and 7.6% define it as 40 hours per week. Only 9.9% of employers require fewer than 30 hours per week.

United Benefit Advisors’ 2015 UBA Health Plan Survey report database contains the validated responses of 18,186 health plans, sponsored by 10,804 employers, who cumulatively employ more than two million employees and more than five million total lives. An executive summary of the survey report may be pre-ordered here.

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