Products May 22, 2014

Firms Launch Benchmarking Tool for Institutional Investors

May 22, 2014 (PLANSPONSOR.com) – Endowment Wealth Management, Inc. and ETF Model Solutions, LLC have partnered to launch the Endowment Index.
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The index is a benchmarking tool for investors in globally-diversified, multi-asset portfolios that include alternative investments. Calculated by Nasdaq OMX, it is an objective benchmark comprised of three major asset class building blocks: Global Equity, Global Fixed Income, and Alternatives which includes hedge funds, private equity and real assets.

The index is used for portfolio comparison, investment analysis, research and benchmarking purposes by fiduciaries such as trustees, portfolio managers, consultants and advisers to endowments, foundations, trusts, defined benefit/defined contribution plans, pension plans and individual investors. It is a total return index and all underlying components are comprised of exchange-traded funds (ETFs) or other investable securities.

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“The proliferation of exchange-traded products and mutual funds that offer alternative strategies in liquid form is leading to the increasing adoption by investors outside of the institutional endowment universe,” says Prateek Mehrotra, Chief Investment Officer of Endowment Wealth Management, based in Appleton, Wisconsin. “Until now, they’ve had to use a proxy or a custom benchmark for those portfolios. The Endowment Index now provides an appropriate benchmarking solution for investors.”

The use of alternatives has broadened beyond endowments. Mehrotra cites recent studies by Barclays Prime Brokers, which estimate that use of liquid alternatives grew 43% to $137 billion in 2013, and that by 2018, assets in this space could stretch to between $650 and $950 billion.

Index data can be accessed through most major quote providers and websites under the symbol “ENDOW”. For more information, visit http://www.EndowmentIndex.com.

Endowment Wealth Management, Inc. is an independent private wealth management firm using a multi-client family office service model.

ETF Model Solutions, LLC, is third-party investment manager and ETF strategist that builds investment models for 401(k) plans, investment advisers within their practice, family offices, endowments, foundations, trusts, and individual investors.

Benefits May 22, 2014

Milliman Records Lowest Health Care Spend Growth Rate

May 22, 2014 (PLANSPONSOR.com) – The health care spend in 2014 for a typical American family of four covered by an average employer-sponsored health plan is $23,215, according to Milliman.
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While the amount has more than doubled over the past 10 years, growing from $11,192 to $23,215, the 5.4% growth rate from 2013 to 2014 is the lowest annual change since the Milliman Medical Index (MMI) was first calculated in 2002. Employers pay the largest portion of health care costs, contributing $13,520 per year, or 58% of the total, according to Milliman principals. However, increasing proportions of costs have been shifted to employees.

Since 2007, when the economic recession began, the average employee health care cost to employers has increased 52%—an average of 6% per year—while the expenses borne by the family, through payroll deductions and out-of-pocket costs, have grown at an even faster rate, 73% (average of 8% per year).

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The index shows the annual increase in health care cost ranged from a high of 10.1%, in both 2003 and 2004, to a low of 5.4% in 2014. The rate of increase dropped by nearly a full percentage point—from 6.3% in 2013 to 5.4% in 2014.  In almost every year of the past 10, growth rates have decelerated.

In each of the past four years, employees have assumed an increasing percentage of the total cost of health care. The total employee cost (payroll deductions plus out-of-pocket expenses) increased by approximately 32% from 2010 to 2014, while employer costs (premium contributions) increased by 26%.

More about the Milliman Medical Index is at http://www.milliman.com/mmi/.

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