Products March 1, 2018

Investment Products and Services Launches

Wilmington Trust to support Franklin Templeton CITs; Ryan Labs releases strategy for corporate and public pensions; and TriLine issues energy-related ETF.

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Wilmington Trust, N.A. has been selected by Franklin Templeton Investments to provide administration, transfer agent, and custody services to its existing collective investment funds (CITs), which have approximately $5.5 billion in assets as of December 31.

Wilmington Trust’s back office support will allow Franklin Templeton to focus on its strategic asset management and retirement priorities, while its affiliated trust company, Fiduciary Trust International of the South, a Florida chartered trust company, remains the trustee for the funds.

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Wilmington Trust and Franklin Templeton Investments have launched additional trusts in strategies that have strong demand from retirement plan advisers and their clients like Templeton Foreign and Franklin Growth.

“It’s an exciting time to be in the retirement plan industry as advisers, asset managers, and plan sponsors search for investment vehicles that meet their unique needs,” says Rob Barnett, administrative vice president and head of Retirement Distribution at Wilmington Trust. “We’re thrilled to continue to support the growth of collective investment funds as a critical investment vehicle for 401(k) retirement advisers and plan sponsors.”

Ryan Labs Releases Strategy for Corporate and Public Pensions

Ryan Labs Asset Management Inc. (Ryan Labs), a Sun Life Investment Management company, has announced the launch of their Defensive Risk Premia (DRP) strategy for corporate and public pension plans, as well as other institutional investors. This strategy is designed to enhance the defensive role the fixed income allocation plays within the total asset allocation of an institutional investor’s portfolio and to further offset losses from equity market downturns.

Despite recent market fluctuations, the current nine-year equity bull market remains one of the longest in history without a major correction. Using a proprietary quantitative model that monitors financial and economic risk on a daily basis, the DRP strategy is designed to turn on when elevated equity risk is indicated and there is a flight to quality into safe haven assets. Using treasury futures contracts, the strategy aims to dynamically offset negative equity performance of market volatility. 

In addition to Ryan Labs fixed income strategies, the new DRP strategy is available to institutional investors in various vehicles to suit their individual needs.

“Building on the momentum of our successful fixed income solutions—from total returns, to liability driven investments, to overlay strategies—our Defensive Risk Premia strategy reinforces our deep expertise and relentless focus on alpha-generating strategies,” says Richard Familetti, president and CIO, Ryan Labs. “The DRP strategy brings our strengths in managing underlying fixed income assets with overlay and quantitative analysis to provide a unique solution to institutional investors.”

TriLine Issues Energy-Related ETF

TriLine Index Solutions, an affiliate of BP Capital Fund Advisors, has announced the launch of the NYSE Pickens Oil Response exchange-traded fund (ETF).

The ETF—named BOON—aims to redefine energy investing by offering a more modern and enhanced way to obtain exposure to energy, and tracks the performance of the NYSE Pickens Oil Response Index, which is owned and administered by ICE Data Indices, LLC.

The Index is comprised of equities highly correlated to energy, based upon the price of the global benchmark for oil, ICE Brent Crude.  It includes not only traditional energy companies, but also firms that are “energy-intensive” end users of energy who have the potential to benefit from the abundance of U.S. supply as well as growing global demand for energy. The inclusion of end users is intended to lessen the effect of the “boom and bust” nature of commodity cycles and attempts to mitigate downsize capture while preserving upside capture.  The Index is equally-weighted and reconstitutes annually while rebalancing quarterly. 

Benefits March 1, 2018

How to Be a Best Performer in Health Care Practices Employer

A company of 10,000 employees could realize savings of more than $22 million annually by implementing a broad set of effective strategies and practices, according to Willis Towers Watson.

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From the 2017 Willis Towers Watson Financial Benchmark Survey and the Willis Towers Watson 22nd annual Best Practices in Health Care Employer Survey, Willis Towers Watson defines best performers based on their abilities to manage cost trends and efficiency.

According to the firm, a company of 10,000 employees could realize savings of more than $22 million annually by implementing a broad set of effective strategies and practices. It’s group of best-performing companies has achieved a $2,251 per employee per year (PEPY) health care cost advantage over the national average in 2017 ($9,950 compared with $12,201).

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So how do companies get to be best performers? One area where best performers excel is with subsidization and plan design. More than one-third (34%) of best performers implement spousal coverage surcharges when spouses have other coverage available, compared to 20% of high-cost companies. Twenty-one percent review health care subsidies within the context of their Total Rewards programs (compared to 8% of high-cost companies), 77% offer account-based health plans (ABHPs) with health savings accounts (HSAs) (compared to 63%), 30% offer ABHPs as the only plan option (6%), and 45% use ABHP as a default option (6%).

According to the Best Practices in Health Care Employer Survey, best performers do more to encourage and improve workforce well-being, using a variety of approaches. More than half (53%) align the work environment and well-being programs with company culture, compared to 16% of high-cost companies. Fifty-nine percent sponsor worksite well-being campaigns and offer nutrition education or seminars (39%), 51% sponsor programs or pilots that target specific conditions or high-cost cases (33%), and 30% use a variety of financial and nonfinancial metrics to measure the impact of their health and well-being programs (15%).

Best performers are far ahead of organizations with higher health care costs when it comes to employee engagement in well-being, especially through company social networks. The survey showed that close to half of best performers (47%) engage employees through their company’s social networks (key influencers, testimonials and viral messaging), compared with 21% of high-cost companies. Forty-two percent of best performers use social recognition to boost engagement in health and well-being compared with 23% of high-cost companies, while 28% offer wearable devices for tracking physical activity versus 12% of high-cost companies.

Best performers are also ahead of peers in adopting new health care delivery solutions. Eighty-five percent offer health care delivery via telemedicine for professional consultations, 45% use centers of excellence within health plans, and 32% offer onsite or near-site health clinics.

In addition, 57% of best performers formally monitor vendor performance through performance guarantees, compared with 34% of high-cost companies. The same percentage have a partnership with a third-party data warehouse, compared with 25% of high-cost companies.

The gap narrows between best performers’ pharmacy practices and those of organizations with higher health care costs, which may indicate that all employers are hyper-focused on rising pharmacy costs, especially for specialty medications. Best performers still lead the pack in adopting strategies to manage pharmacy cost, though. More than half (57%) evaluate pharmacy benefit contract terms, compared with 49% of high-cost companies. And more than one-quarter (28%) evaluate their plan design to promote the use of specialty biosimilars, when available, compared with only 18% of high-cost companies.

“Best performers understand there is no single strategy for managing costs and improving the well-being of their workforce,” says Julie Stone, a national health care practice leader at Willis Towers Watson. “They evaluate all aspects of their health and well-being benefit strategies and activities, and implement innovative, integrated practices to improve them.”

Willis Towers Watson selected best performers from the 395 companies that completed the 2017 Willis Towers Watson Financial Benchmark Survey and the 2017 Willis Towers Watson Best Practices in Health Care Employer Survey with sufficient health care cost trend and efficiency information. For more information about best performers, download the high-performance insights report.

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