Investing September 6, 2017

U.S. Has Largest Share of Pension Assets Globally

Across the top 300 funds globally, U.S. funds represent 38.6% of assets.

Reported by

Assets under management at the world’s largest pension funds increased in value by 6.1% in 2016, representing a total of $15.7 trillion, according to the latest global 300 research from Willis Towers Watson.

The figures for year-end 2016 show a return to growth, following a 3.4% decline in 2015, while cumulative growth in assets since 2011 now stands at 23.4%. The top 20 funds by asset size in the research experienced a higher increase than the overall ranking, growing assets by 7.1% over the period. The research shows that the world’s top 300 pension funds together now represent 43.2% of global pension assets, rising from 42.5% in 2015, as estimated against figures from Willis Towers Watson’s Global Pensions Asset Study.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

According to the research, North American funds showed the most noticeable annualized growth rate over the last five years, growing by 6.7% during the period. The U.S. continues to hold its position as the country with the largest share of pension assets across the top 300 funds, representing 38.6% spread across 134 funds.

A total of 28 new funds have entered the ranking over the last five years, with the U.S. contributing the most new funds (13) on a net basis. The U.S. has the largest number of funds within the top 300 ranking (134).

Globally, defined benefit (DB) assets increased by 5.6% in 2016, compared with 9.6% for defined contribution (DC) plans, 3.9% for reserve funds and 2.9% for hybrid funds. DB assets account for 65.5% of the disclosed total advanced utilization management, down from 65.9% in 2015, while DC assets have increased their share, rising from 21.5% in 2015 to 22.2%. Reserve funds remain relatively unchanged at 11.5% (11.7% in 2015), as do hybrid funds (0.8%, falling from 0.9% in 2015).

Among the top 20 global pension funds are the U.S. Federal Thrift Savings Plan, with $485,575,000 in assets; the California Public Employees Retirement System (CalPERS), with $306,333,000 in assets; the California State Teachers Retirement System (CalSTRS), with $193,871,000 in assets; the New York State Common Retirement Fund, with $184,461,000 in assets; the New York City Retirement Fund, with $171,574,000 in assets; the Florida State Board Retirement System, with $153,942,000 in assets; and the Texas Teachers Retirement System, with $133,321,000 in assets.

“The search for attractively priced assets at acceptable risk continues to be a driving force in shaping the fortunes of pension funds and their ability to meet respective missions and objectives,” says Steve Carlson, head of Investment, North America, Willis Towers Watson. “This is increasingly hard and reduces the shine from a year in which the largest asset owners have been able to achieve superior growth. Central to this result has been the ability of leading asset owners to adapt to the ever-changing investment environment, through improvements in governance and the ability to learn from their peers. The desire of asset owners to implement best practices and sound governance has strengthened and will be a key factor in their future success.”

Benefits September 6, 2017

Holistic Well-Being Programs Becoming Critical Business Drivers

Well-being programs are generally well received by employees and employers are enhancing these offerings to drive employee engagement and stay ahead of the competition.

Reported by

Employee well-being programs are taking a more holistic approach and incorporating everything from physical health to mental wellness and financial stability, according to the latest Business of Healthy Employees survey by Virgin Pulse and Human Capital Media (HCM). The report indicates that these programs are no longer “nice-to have” offerings, but critical drivers of employee recruitment, retention and engagement.

For the first time in the survey’s history, improving employee engagement was cited as the top reason employers offer well-being programs, equal to managing health care costs. The survey also found that for the first time this year, organizations that made the business case for well-being solutions did so to become an employer of choice. The study notes that to become an employer of choice, companies will have to offer a robust suite of well-being offerings to address the diverse needs of their workforce.

Get more!  Sign up for PLANSPONSOR newsletters.

Compared to the previous year, all of the top ten most popular programs offered by employers saw growth in adoption in 2017. Mental health took the lead for the first time with 72% of employers offering a well-being program addressing this issue. Moreover, the majority of employees (85%) say managing their stress levels is an important factor in their program participation.

Other widely-offered programs include those addressing physical health (68%), health risk assessments (68%), smoking cessation (64%) and financial management (58%).

Employee Reaction to Well-Being Programs

The survey found many of these programs are well received by employees and may help them meet their personal goals. The majority of employees who participate in well-being programs say they do so to improve their health (97%), and 93% participate to boost their energy levels.

Seventy-seven percent of employees agree that their well-being programs help them feel more energetic and productive both at work and beyond. Moreover, 90% of employees say these programs positively affect work culture, 77% say they make them feel like the company cares about them, and 62% say these offerings make them more loyal and engaged to the company.

The researchers write, “Employees will continue participating as long as they achieve results, which in turn benefits the organization in the form of increased engagement and higher retention rates.”

How Employers Approach Well-being Programs

The survey found some key differences in how various companies address well-being initiatives, as well as the results they generate. For example, the study highlighted that “global organizations differ in their offerings, are more inclusive, have a higher incidence in wearable usage and are very focused on communication tactics.” These organization also report higher impact on employee engagement (38% higher), and recruiting and retention (34% higher) than all other companies surveyed.

Researchers also noted that organizations with increased participation rates have some distinct attributes including satisfactory wellness-program measurement strategies and higher wearable usage. They are also more likely to increase their well-being program spending in the next three years.

Particularly, 24% of organizations surveyed reported they had a satisfactory measurement strategy that can tie well-being efforts to business outcomes. Moreover, the study notes that having a measurement strategy is closely correlated with participation rates.

Still, the researchers note measuring the return on investment (ROI) in these programs can be very difficult. The majority (53%) are relying on employee feedback to improve well-being programs.

Researchers conclude that the rise in programs addressing all aspects of employee health demonstrates organizational commitment to a holistic view.

The 2017 Business of Healthy Employers Survey can be accessed at Connect.VirginPulse.com.

«