Corporate pension plan funding levels flatline in 2016
Great article from Employee Benefits Advisor about Corporate pension plan funding by Phil Albinus
The stock market may have soared after the news that Donald Trump won the White House and plans to cut taxes and regulations, but the pension funded status of the nation’s largest corporate plan sponsors remains stuck at 80%. This figure is roughly unchanged for 2014 and 2015 when the status rates were 81%, according to a recent analysis conducted by Willis Towers Watson.
In an analysis of 410 Fortune 1000 companies that sponsor U.S. defined benefit pension plans, Willis Towers Watson found that the pension deficit is projected to have increased $17 billion to $325 billion at the end of 2016, compared to a $308 billion deficit at the end of 2015.
“On the face of it, [the 2016 figures of 80%] looks pretty boring. For the last three years the funding levels were measured around 80% and it doesn’t look that interesting,” says Alan Glickstein, senior retirement consultant for WTW. “But one thing to note is that 80% is not 100%. To be that stagnant and that far away from 100% is not a good thing.”
In fact, 2016’s tentative figures, which have yet to be finalized, could have been worse.
According to Glickstein, the 2016 figure hides “some pretty dramatic movements” that occurred during the unpredictable election year. “Prior to the election and due to the significant changes to equities and other asset values after the election, this number would have been more like 75%” if Trump had not won, he says.
“That is the interesting story because we haven’t been as low as 75% really ever in the last 20 years,” Glickstein says.
Fortune 1000 companies contributed $35 billion to their pension plans in 2016, according to the WTW research. This was an increase compared to the $31 billion employers contributed to their plans in 2015 but still beneath the contribution levels from previous years. “Employer contributions have been declining steadily for the last several years partly due to legislated funding relief,” according to Willis Towers Watson.
Despite these dips, total pension obligations increased from $1.61 trillion to $1.64 trillion.
Why are U.S. companies slow to fund their own pension plans, especially when in 2006 and 2007 the self-funded levels were 99% and 106% respectively?
“In prior years, plan sponsors put lots of extra contributions into the plans to help pay off the deficit, and investment returns have been up and the equities the plans have invested in have helped with that we haven’t been able to move this up above 80%,” Glickstein says.
That said, many American corporations are sitting on significant amounts of cash but appear not to be putting money into their retirement plans.
“We have seen companies contributing more to the plans in the past, but each plan is different and each corporation has their own situation. Either a company is cash rich or it is not,” Glickstein says.
“With interest rates being low and the deductions company get for their contributions, for a lot of plan sponsors it has been an easy decision to put a lot of money into the plan,” he says.
“And there are plenty of rewards for keeping premiums down by increasing contributions.”
Further, a new Congress and president could have an impact on corporate contributions especially if new corporate tax codes are enacted.
The broad initiatives of a new administration in the executive branch and legislative branch will have an impact, says Glickstein.
“With tax reforms, the general thrust for corporations and individuals is we are going to lower the rates and broaden the underlying tax base. So for pensions, the underlying tax rates for pensions is probably going to be lower and if [Congress gets] tax reforms done and they lower the corporate rate in 2017, and even make it retroactive,” Glickstein speculates. He predicts that some plan sponsors will want to contribute much more to the 2016 tax year in order to qualify for the deductions at the higher rates while they still can.
“There is a short-term opportunity potentially to put more money in now and capture the higher deduction once tax reform kicks in,” says Glickstein. “And with an 80% funded status, there is plenty of room to put more money in than with an overfunded plan.”
See the original article Here.
Source:
Albinus P. (2017 January 9). Corporate pension plan funding levels flatline in 2016[Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/news/corporate-pension-plan-funding-levels-flat-line-in-2016?feed=00000152-1377-d1cc-a5fa-7fff0c920000
Kaiser Health Tracking Poll: Health Care Priorities for 2017
Great article from the Kaiser Family Foundation about Americans thoughts on ACA repeal by Ashley Kirzinger, Bryan Wu, and Mollyann Brodie
KEY FINDINGS:
- The latest Kaiser Health Tracking Poll finds that health care is among the top issues, with the economy and jobs and immigration, Americans want President-elect Donald Trump and the next Congress to address in 2017. When asked about a series of health care priorities for President-elect Trump and the next Congress to act on, repealing the ACA falls behind other health care priorities including lowering the amount individuals pay for health care, lowering the cost of prescription drugs, and dealing with the prescription painkiller addiction epidemic.
- When presented with two general approaches to the future of health care in the U.S., six in ten (62 percent) Americans prefer “guaranteeing a certain level of health coverage and financial help for seniors and lower-income Americans, even if it means more federal health spending and a larger role for the federal government” while three in ten (31 percent) prefer the approach of “limiting federal health spending, decreasing the federal government’s role, and giving state governments and individuals more control over health insurance, even if this means some seniors and lower-income Americans would get less financial help than they do today.”
- As Congressional lawmakers make plans for the future of the ACA, the latest survey finds the public is divided on what they would like lawmakers to do when it comes to the 2010 health care law. Forty-nine percent of the public think the next Congress should vote to repeal the law compared to 47 percent who say they should not vote to repeal it. Of those who want to see Congress vote to repeal the law, a larger share say they want lawmakers to wait to vote to repeal the law until the details of a replacement plan have been announced (28 percent) than say Congress should vote to repeal the law immediately and work out the details of a replacement plan later (20 percent). However, the survey also finds malleability of attitudes towards Congress repealing the health care law with both supporters and opponents being persuaded after hearing counter-messages.
Top Issues for President-elect Trump and Congress
The latest Kaiser Health Tracking Poll finds health care among the top issues Americans want President-elect Donald Trump and the next Congress to address in 2017. When asked which issue they would most like the next administration to act on in 2017, one-fourth of the public mention the economy and jobs (24 percent), followed by immigration (20 percent), and health care (19 percent). Among Democrats and independents, the economy and jobs is the top issue (23 percent and 24 percent, respectively) while the top issues for Republicans are immigration (30 percent) and economy and jobs (29 percent). Among all partisans, health care ranks among the top three issues that the public wants the next administration to act on in 2017.
The top issue for voters who supported President-elect Donald Trump are similar to those among Republicans: economy and jobs (31 percent) and immigration (31 percent), followed closely by health care (27 percent).
When asked to mention which health care issue they would most like President-elect Trump and the next Congress to act on in 2017, about one-third of the public mention the Affordable Care Act (ACA) but attitudes are mixed between wanting the next administration to act on repealing the 2010 health care law (14 percent), improving/fixing the law (11 percent), or keeping/expanding the law (8 percent).
LOWERING OUT-OF-POCKET COSTS IS A TOP PRIORITY FOR AMERICANS
When asked about a series of health care priorities for President-elect Trump and the next Congress to act on, repealing the ACA falls behind other health care priorities. Two-thirds of the public (67 percent) say lowering the amount individuals pay for health care should be a “top priority” for President-elect Trump and the next Congress. This is followed by six in ten (61 percent) who say lowering the cost of prescription drugs should be a “top priority,” and nearly half (45 percent) who say dealing with the prescription pain killer addiction epidemic should be a “top priority.”
Smaller shares say repealing the 2010 health care law (37 percent), decreasing how much the federal government spends on health care over time (35 percent), and decreasing the role of the federal government in health care (35 percent) should be top priorities.
LOWERING OUT-OF-POCKET COSTS TOPS PRIORITIES REGARDLESS OF PARTISANSHIP
While about two-thirds of Democrats, Republicans, and independents say lowering the amount individuals pay for health care should be a “top priority,” partisans differ in how they prioritize other health care issues. Most notably, while 63 percent of Republicans say repealing the 2010 health care law should be a top priority – this view is shared by much smaller shares of independents (32 percent) and Democrats (21 percent). Similarly, Republicans (50 percent) are more likely than independents (34 percent) or Democrats (26 percent) to place a top priority on decreasing the role of the federal government in health care. By contrast, Democrats and independents are somewhat more likely than Republicans to place a top priority on lowering the cost of prescription drugs (67 percent, 61 percent, and 55 percent, respectively) and on dealing with the epidemic of prescription painkiller addiction (51 percent, 46 percent, and 39 percent, respectively).
CONFIDENCE IN PRESIDENT-ELECT TRUMP’S ABILITY TO REDUCE HEALTH CARE COSTS
Lowering out-of-pocket health care costs is a top priority for Americans, and this was also a campaign promise from Donald Trump during his 2016 presidential campaign. When asked how confident they are in President-elect Trump’s ability to deliver on this campaign promise that Americans will get better health care at a lower cost than they pay now, Americans are split with similar shares saying they are either “not too confident” or “not at all confident” (51 percent) as saying they are “very confident” or “somewhat confident” (47 percent).
Confidence in President-elect Trump’s promise that Americans will get better health care at a lower cost is largely divided by party identification and 2016 vote choice with nearly nine in ten Republicans (85 percent) and Trump voters (86 percent) saying they are either “very” or “somewhat” confident in the next administration’s ability to deliver on this campaign promise. This is compared to 81 percent of Democrats and 86 percent of Clinton voters who say they are either “not too confident” or “not at all confident” that the next president will deliver on this promise.
Americans’ Attitudes on the Future of Health Care in the U.S.
Throughout the 2016 presidential election, it became clear that the two major political parties in the U.S. have competing views on the future of health care. When given two competing approaches to the future of health care, six in ten Americans (62 percent) prefer “guaranteeing a certain level of health coverage and financial help for seniors and lower-income Americans, even if it means more federal health spending and a larger role for the federal government” while about one-third (31 percent) prefer “limiting federal health spending, decreasing the federal government’s role, and giving state governments and individuals more control over health insurance, even if this means some seniors and lower-income Americans would get less financial help than they do today.”
There are also partisan differences, with about half of Republicans (53 percent) preferring the approach that Republican leaders have coalesced around – limiting federal health spending, decreasing the federal government’s role, and giving states and individuals more control; this approach is preferred by much smaller shares of independents (27 percent) and Democrats (15 percent). The majority of Democrats (79 percent) and independents (65 percent) prefer guaranteeing a certain level of coverage for seniors and lower-income Americans – even if it means a larger role for the federal government and increased federal spending.
ATTITUDES TOWARDS THE FUTURE OF THE AFFORDABLE CARE ACT
The future of the Affordable Care Act has been at the forefront of the political agenda since the 2016 election with President-elect Trump and Republican lawmakers in Congress saying they will quickly move to repeal the health care law in 2017. The latest survey finds public opinion towards the law is divided with similar shares of the public saying they have an unfavorable opinion (46 percent) as say they have a favorable opinion (43 percent) of the law, which is largely stable from previous months.
REPEALING AND REPLACING THE AFFORDABLE CARE ACT
As Congressional lawmakers make plans for the future of the ACA, the latest Kaiser Health Tracking survey finds that – similar to overall attitudes towards the law – the public is also divided on what they would like lawmakers to do when it comes to the 2010 health care law.
Overall, 49 percent of the public think the next Congress should vote to repeal the law and 47 percent say they should not vote to repeal it. Of those who want to see Congress vote to repeal the law, a larger share say they want lawmakers to wait to vote on repeal until the details of a replacement plan have been announced (28 percent) than say Congress should vote to repeal the law immediately and work out the details of a replacement plan later (20 percent).
HOW FLEXIBLE ARE AMERICANS’ OPINIONS OF REPEALING THE ACA?
The survey examines the malleability of attitudes towards Congress repealing the health care law and finds that both supporters and opponents of Congress voting to repeal the law can be persuaded after hearing counter-messages. After hearing pro-repeal arguments, the share of the public supporting repeal can grow to as large as 60 percent, while counter-messages against repeal can decrease support to 27 percent.
Among those who originally said Congress should not vote to repeal the 2010 health care law, about one-fifth (22 percent) change their opinion after hearing that some consumers around the country have seen large increases in the cost of their health insurance – which is similar to the share who shifted their opinion after hearing that the country cannot afford the cost of providing financial help to individuals to purchase health insurance.
On the other side of the debate, some of those who originally said they support Congress voting to repeal the health care law are also persuaded by hearing arguments often made by opponents of the repeal efforts. The survey finds that a share shifts their opinion after hearing that some people with pre-existing conditions would no longer be able to get health coverage and after hearing that some of the roughly 20 million Americans who got health insurance as a result of the law would lose their coverage.
PERCEIVED EFFECTS OF CHANGES TO HEALTH CARE SYSTEM
Overall, large shares of Americans say their own health care will “stay about the same” if lawmakers vote to repeal the 2010 health care law. More than half of Americans say the quality of their own health care (57 percent) and their own ability to get and keep health insurance (55 percent) will stay about the same if the law is repealed. Fewer (43 percent) say the cost of health care for them and their family will stay about the same if the law is repealed. In each of these cases, about equal shares believe their own situation will get better as say it will get worse.
INDIVIDUALS WITH A PRE-EXISTING CONDITION
After being read a definition of “pre-existing condition,” just over half (56 percent) of U.S. adults say that they or someone in their household would be considered to have such a condition. Overall, these individuals are more likely than those without a pre-existing condition to say their access, quality, and cost of health care will get “worse” if the ACA is repealed. However, about one in five of these individuals say their access, quality, and cost of health care will get “better” if the ACA is repealed.
One-third of individuals who have someone in their household with a pre-existing condition say the cost of health care for them and their family will get worse if the ACA is repealed, compared to about one in five of those living in a household without someone with a pre-existing condition. Larger shares of those with a pre-existing condition also say their ability to get and keep health insurance will get worse than those without a pre-existing condition (24 percent vs. 17 percent), and the quality of their own health care will get worse (21 percent vs. 15 percent).
In addition, individuals with a pre-existing condition in their household also report being more worried about health-care related issues than those without a pre-existing condition. Slightly more than half (54 percent) of those with a pre-existing condition say they are either “very worried” or “somewhat worried” about not being able to afford the health care services they need, compared to 43 percent of those without a pre-existing condition. Similarly, 43 percent of those with a pre-existing condition are worried (either “very” or “somewhat”) about losing their health insurance compared to 30 percent of those without a pre-existing condition.
Kaiser Health Policy News Index
The latest Kaiser Health Tracking Poll finds President-elect Donald Trump’s transition and cabinet appointments was the most closely followed news story during the past month with seven in ten (68 percent) Americans closely following news about his transition. Other stories that captured the attention of Americans include the conflict involving ISIS in Mosul, Iraq (64 percent), the CIA’s report of Russia interfering in the 2016 presidential election (64 percent), and the top health policy story this month – Republican plans to repeal the ACA (63 percent). Other health policy stories followed by Americans this month include the ongoing heroin and prescription painkiller addiction epidemic in the U.S. (57 percent), Republican plans for the future of Medicare (51 percent), and the passing of the 21st Century Cures Act (37 percent).
See the original article and charts Here.
Source:
Krizinger A., Wu B., Brodie M. (2017 January 06). Kaiser health tracking poll: health care priorities [Web blog post]. Retrieved from address https://kff.org/health-costs/poll-finding/kaiser-health-tracking-poll-health-care-priorities-for-2017/
Employees putting billions more than usual in their 401(k)s
Interesting article from BenefitsPro about employee's increased input into their 401(k)s by Ben Steverman
(Bloomberg) -- Saving for retirement requires making sacrifices now so your future self can afford to stop working later. Someday. Maybe.
It’s not news that Americans aren’t saving enough. The typical baby boomer, whose generation is just starting to retire, has a median of $147,000 in all of his retirement accounts, according to the Transamerica Center for Retirement Studies.
And if you think that’s depressing, try this on: 1 in 3 private sector workers don’t even have a retirement plan through their job.
But the new year brings with it some good news: If people do have a 401(k) plan through their employer, there’s data showing them choosing to set aside more for their later years.
On average, workers in 2015 put 6.8 percent of their salaries into 401(k) and profit-sharing plans, according to a recent survey of more than 600 plans. That’s up from 6.2 percent in 2010, the Plan Sponsor Council of America found.
An increase in retirement savings of 0.6 percentage points might not sound like much, but it represents a 10 percent rise in the amount flowing into those plans over just five years, or billions of dollars. About $7 trillion is already invested in 401(k) and other defined contribution plans, according to the Investment Company Institute.
If Americans keep inching up their contribution rate, they could end up saving trillions of dollars more. Workers in these plans are even starting to meet the savings recommendations of retirement experts, who suggest setting aside 10 percent to 15 percent of your salary, including any employer contribution, over a career.
While workers are saving more, companies have held their financial contributions steady—at least over the past few years. Employers pitched in 4.7 percent of payroll in 2015, the same as in 2013 and 2014. Even so, it’s still more than a point above their contribution rates in the aftermath of the Great Recession.
One reason workers participating in these plans are probably saving more: They’re being signed up automatically—no extra paperwork required. Almost 58 percent of plans surveyed make their sign-up process automatic, requiring employees to take action only if they don’t want to save.
Automatic enrollment can make a big difference. In such plans, 89 percent of workers are making contributions, the survey finds, while 75 percent make 401(k) contributions under plans without auto-enrollment. Auto-enrolled employees save more, 7.2 percent of their salaries vs. 6.3 percent for those who weren’t auto-enrolled.
Companies are also automatically hiking worker contribution rates over time, a feature called “auto-escalation” that’s still far less common than auto-enrollment. Less than a quarter of plans auto-escalate all participants, while 16 percent boost contributions only for workers who are deemed to be not saving enough.
A key appeal of automatic 401(k) plans is that they don’t require participating workers to be investing experts. Unless employees choose otherwise, their money is automatically put in a recommended investment.
And, at more and more 401(k) and profit-sharing plans, this takes the form of a target-date fund, a diversified mix of investments chosen based on a participant’s age or years until retirement. Two-thirds of plans offer target-date funds, the survey found, double the number in 2006.
The share of workers’ assets in target-date funds is up fivefold as a result.
A final piece of good news for workers is that they’re keeping more of every dollar they earn in a 401(k) account. Fees on 401(k) plans are falling, according to a recent analysis released by BrightScope and the Investment Company Institute.
The total cost of running a 401(k) plan is down 17 percent since 2009, to 0.39 percent of plan assets in 2014. The cost of the mutual funds inside 401(k)s has dropped even faster, by 28 percent to an annual expense ratio of 0.53 percent in 2015.
See the original article Here.
Source:
Steverman B. (2017 January 5). Employees putting billions more than usual in their 401(k)s [Web blog post]. Retrieved from address https://www.benefitspro.com/2017/01/05/employees-putting-billions-more-than-usual-in-thei?ref=hp-news&page_all=1
How millennials are redefining retirement
Great article from Employee Benefits Advisor about millennials effect on their future retirement by Paula Aven Gladych
Millennials are redefining what retirement will look like when it is their time to join the ranks.
According to a study by Bank of America Merrill Edge, 83% of millennials plan to work into retirement, which is the exact opposite of current retirees, the majority of whom say they aren’t working in retirement or have never worked during their retirement.
“That’s a fundamental shift. They may never see the end to their working days if they don’t make some changes,” says Joe Santos, regional sales executive with Merrill Edge in Los Angeles. “We have seen over the past few years consistent insecurity and uncertainty around retirement planning. With millennials and Gen X, the struggle is competing with life priorities.”
Seventy-nine percent of Gen Xers and 64% of baby boomers also expect to work in retirement.
Half of millennials ages 18 to 24 believe they will need to take on a second job to be able to save for retirement, compared to 25% for all respondents, according to the Merrill Edge Report for fall 2016.
Despite the fact that millennials are not very optimistic about their ability to save for retirement, 70% of millennial respondents and 72% of Gen Xers described their investment approach as hands on, compared to 60% of all respondents. Millennials use online and mobile apps and express interest in saving for retirement, Santos says.
Nearly one-third of millennials say they are do-it-yourselfers when it comes to making investments, compared to 19% of all respondents.
“This growing sense of self-reliance among millennials, however, seems to be increasing the desire for further financial guidance and validation from professionals,” the report found, with 31% of millennials saying they are interested in seeking to hire a financial adviser within the next five years. Forty-two percent of them said they were most open to receiving online financial advice.
Talking about finances is still taboo, the report indicates. Only 54% of survey respondents said they would feel comfortable discussing their personal finances with their spouse or partner; 39% said they would feel comfortable discussing their finances with a financial professional.
“That uncertainty causes them to underestimate what is needed for retirement. If you think of student loans for millennials, they are struggling with student loan debt. It makes retirement seem so far out there,” Santos says.
The majority of those surveyed felt they needed less than $1 million in savings to achieve a comfortable retirement, but 19% of respondents didn’t know how much they needed to save for retirement.
“And even with these estimates, two in five (40%) of today’s non-retirees say reaching their magic number by retirement will either be ‘difficult’ or ‘virtually unattainable,’” the report found. Seventeen percent of respondents said they are relying on luck to get them by.
Because millennials are so young, they have an opportunity to do all the right things so that they can have a secure retirement, Santos says. “I love seeing that they have the interest to learn about retirement by taking a step-by-step approach.”
He added that the last thing people want to do is start saving too late.
“It is a challenge when you think about so many folks straddled with debt, especially student loan debt, and growing longevity. The sandwich generation makes these milestones seem unattainable, but with some proper planning, we can get there,” he says.
The survey of 1,045 mass affluent respondents throughout the United States was conducted by Braun Research from Sept. 24 to Oct. 5, 2016. Mass affluent individuals are those with investable assets between $50,000 and $250,000 or those ages 18 to 34 who have investable assets between $20,000 and $50,000 with an annual income of at least $50,000.
See the original article Here.
Source:
Gladych P.(2016 December 30). How millennials are redefining retirement[Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/news/how-millennials-are-redefining-retirement?utm_campaign=eba_retirement_final-dec%2030%202016&utm_medium=email&utm_source=newsletter&eid=909e5836add2a914a8604144bea27b68
Don’t expect tech to solve benefits communications problems
Great article from Benefits Pro about using technology to communicate with your employees by Marlene Satter
Although technology has spawned multiple methods of communication with employees on benefits, that doesn’t mean they’re solving all the problems in conveying information back and forth between employer and employee.
In fact, generational and demographic differences, varying levels of comfort with a range of communication methods and the complexity of information all mean that there’s no one-size-fits-all solution in workplace benefits communication.
A study from West’s Health Advocate Solutions finds employees’ expectations cover a wide range in benefits, health and wellness program communication. As a result, human resources and benefits managers have to dig more deeply in finding ways to convey information to employees.
One finding which may surprise them is employees prefer live-person conversations, although some do prefer the option to use digital communication channels in certain benefits scenarios. And 41 percent of employees say their top complaint about employers’ benefits programs is that communication is too infrequent.
The top choice of employees for communicating about health care cost and administrative information is directly by phone (73 percent) with a live person; second choice was a website or online portal (69 percent), while an in-person conversation was the choice of 56 percent.
For information about physical wellness benefits, 71 percent opt for the website/online portal, while 62 percent want to talk to someone on the phone and 56 percent wanted an in-person conversation. Interestingly, 62 percent of men and 44 percent of women prefer in-person conversations.
For personal/emotional wellness issues, 71 percent want that chat with a person on the phone, 65 percent want an in-person conversation and just 60 percent want to interact with a website/online portal.
When it comes to managing a chronic condition, 66 percent prefer to talk to someone on the phone, 63 percent would prefer the website/online portal option and 61 percent want an in-person conversation. Sixty-seven percent of men, compared with 53 percent of women, prefer in-person conversations, while 35 percent of women, compared with 18 percent of men, prefer mobile apps.
And there are generational differences, too, with millennials wanting in-person interactions more than either Gen X or boomer colleagues. But they all want multiple options, and the ability to choose the one they prefer, rather than simply being restricted to a single method.
See the original article Here.
Source:
Satter M. (2016 December 14). Don't expect tech to solve benefits communications problems [Web blog post]. Retrieved from address https://www.benefitspro.com/2016/12/14/dont-expect-tech-to-solve-benefits-communications
SHRM Study: Health Care Remains Key Benefit for All Employee Groups
Check out this interesting article from Workforce about the most recent SHRM benefits study by Andie Burjek
See the original article Here.
Source:
Burjek A. (2016 December 1). SHRM study: health care remains key benefit for all employee groups[Web blog post]. Retrieved from address https://www.workforce.com/2016/12/01/shrm-study-health-care-remains-key-benefit-employee-groups/
3 reasons benefits are a game-changer for attracting talent
Helpful tips from Employee Benefit Adviser about attracting new talent by Aldor Delp
Unemployment is hovering around 5%, November marked 73 continuous months of job gains and wage growth is picking up. All indications seem to suggest that employers have positions to fill, which may also mean that workers now have leverage, confidence and options. This is good news for job candidates. But for employers vying for fresh talent, it means the attributes of a company need to be that much more enticing. It also makes me think that a comprehensive benefits package may tip the scales for a candidate who’s considering multiple offers. To put it simply: Benefits can be the game changer.
It’s true that a traditional comprehensive benefit package has always been a successful recruitment element for companies. But given the wider array of benefits employers now can offer, today’s companies can use those elements to differentiate themselves from the competition.
From an employer’s perspective, competitive benefits don’t just help with recruitment but can also bolster retention. While strong benefit packages can potentially become expensive depending on the options they include, replacing an employee can be potentially even more costly and time consuming if a company experiences regular churn. With an investment in more appealing benefits packages, an employer may be able to mitigate the cost, time and effort of turnover and recruitment.
While healthy, stocked kitchens, nap areas and ping pong tables are perks that now reach far beyond the tech industry, many companies are building up three additional benefits areas that can truly change the game.
1) Financial wellness programs. Given the recent recession, retirement still is a growing concern for many American workers. A recent study showed that over the past 12 months, 38% of workers considered delaying retirement beyond the original age they intended and 52% said they will delay retirement because they “need to save more.” When these financial worries make their way into the workplace, employers should take notice. Consider a study from PricewaterhouseCoopers that showed that employees spend an average of three hours a week at work dealing with their finances. That’s fairly significant.
By offering financial wellness programs, employers can combat this anxiety and increase efficiency, while providing a sought-after benefit that many companies aren’t yet offering. Ninety-two percent of employer-respondents in another ADP study confirmed interest in providing their workforce with information about retirement planning basics, and 84% said the same of retirement income planning. Even if employers would like to provide these programs, few offer them, citing several existing challenges that stand in the way, such as a need to focus on other aspects of their business (27%) or not enough resources (15%). Providing financial wellness programs can be an added reward that may help a potential employee lean in your favor.
2) Strong internal training. Providing employees with training and development opportunities can promote retention and commitment. Regardless of the number of opportunities for career development, you can still help employees refine skills and increase knowledge that will serve them in the future. American workers want to learn to hone their skills. In fact, 84% of Americans are excited to use technology to learn in real-time, according to ADP’s Evolution of Work study. This is a benefit that not only can provide employee enrichment, it can also strengthen the talent pipeline to management positions.
However, internal training programs are not what they used to be. According to ADP’s recent report, Strategic Drift: How HR Plans for Change, corporate training budgets fell by 20% between 2000 and 2008. Seventy-six percent of executives see the market for skilled employees tightening and 75% expect high turnover among millennials. Reduced corporate training budgets have perpetuated a cycle of high employee turnover. So, if your organization has strong training programs, it’s likely to stand out from competitors. It may be worth considering internal and external training opportunities, mentoring, job shadowing, cross-training and professional development classes.
3) Workplace flexibility. Be open to the idea that it may be more feasible for some workers to telecommute and work from home for a portion of the week. Workplace flexibility is attractive for many employees and it can help reduce the number of unscheduled absences. Flexible work arrangements — such as the option to work from home, alternative start and stop times, compressed work weeks, or Summer Fridays — can help encourage workers to use their time more efficiently, and underscore a corporate culture that stresses balance, mindfulness and trust.
As job candidates and existing employees take a more holistic view of their benefits, relevant, supportive and flexible programs can be the game changer for them. The right mix of direct compensation and indirect benefits may be the difference between onboarding that “dream” candidate, retaining a top performer, or elongating the search for that precious needle in the talent haystack.
See the original article Here.
Source:
Delp A. (2016 December 12). 3 reasons benefits are a game-changer for attracting talent[Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/opinion/3-reasons-benefits-are-a-game-changer-for-attracting-talent
Family caregivers pay hefty price to care for loved ones
An exciting article about family caregivers from Benefits Pro by Marlene Y. Satter
It’s not just the late hours, the extra work or the emotional strain. Family caregivers are paying a big price to take care of loved ones who can’t adequately care for themselves, and part of the cost could be their retirement.
According to a new report from AARP, 78 percent of caregivers are incurring out-of-pocket costs as a result of caregiving. The 2016 report “Family Caregivers Cost Survey: What They Spend and What They Sacrifice” estimates that on average, family caregivers are spending roughly $7,000 per year ($6,954) on out-of-pocket costs related to caregiving in 2016.
If that statistic isn’t depressing enough, the report’s financial strain measure, consisting of annual caregiver expense divided by their annual income, shows that caregivers are spending, on average, nearly 20 percent of their income on caregiving activities.
Considering that, it should come as no surprise that many family caregivers have to cut back on other spending, “which can undermine the family caregiver’s future financial security,” the study said.
Sixteen percent have reduced contributions to their retirement savings, and approximately half have cut back on leisure spending (45 percent said they’ve cut down on eating out or vacations because of caregiving expenses).
So where and how are they spending this money?
Household expenses account for the lion’s share of family caregivers’ out-of-pocket spending, eating up 41 percent of it.
This can encompass everything from rent/mortgage payments to home modifications and other household expenses.
Medical expenses make up the second largest chunk, eating up 25 percent of caregivers’ spending on such items as assisted living or skilled nursing facilities, insurance costs and other medical expenses.
And while long-distance caregivers (defined as family caregivers living more than one hour from the care recipient) paid the highest out-of-pocket costs ($11,923), it was no bargain for caregivers living with their care recipient, who also incurred high costs ($8,616).
And if the recipient is older (more than 50 years old) or has dementia, their caregiver will be paying more, too: costs of $7,064 for a recipient older than 50, compared with $5,721 for one younger than the half-century mark, and costs of $10,697 for a recipient with dementia, compared with costs of $5,758 for adults who do not have dementia.
See the original article Here.
Source:
Satter, M. (2016 November 14). Family caregivers pay hefty price to care for loved ones [Web blog post]. Retrieved from address https://www.benefitspro.com/2016/11/14/family-caregivers-pay-hefty-price-to-care-for-love?ref=hp-top-stories
14 everyday attitudes that kill success
“Martha has so much going for her, but she could be doing so much more for herself.” How many people do you know or work with like that? What keeps us from getting to where we want to be or what we want to do? Sure, it may be a lack of the right skills, bad luck, having other goals, or just being plain lazy.
More likely, however, the answer is elsewhere and much closer to home. We can call them “every day” attitudes that are so much a part of us we don’t know the damage they’re doing. Here are some of them:
1) “For what I get paid, I do more than enough.” Surprise! You’re probably right. With so much pressure, it’s easy to feel this way today. Even so, it’s the attitude that’s the problem. Otherwise pleasant people become angry, obstinate, negative, and alienated. It’s not the way to move ahead—or even stay where you are.
2) “I’ve put in my time and paid my dues. Now, it’s my turn.” It may be a choice parking space, extra time off, a plum territory, a promotion, or bigger accounts. It doesn’t make any difference what it is; it’s easy to spot someone with a chip on their shoulder. Their attitude sends the unmistakable message that this person thinks they are special.
3) “Sorry, but I’m really busy right now. Can’t you get someone else?” When asked to step in and help solve a problem, work on a project, develop a plan, or handle a difficult situation, some people make it clear that they can’t be counted on when needed.
4) “They’ll see what happens when I leave. It’ll take three people to replace me.” Even though we know that no one is indispensable, it’s tough for some people to get past the idea that they are the one exception. If asked, they’re quick to let it be known that they carry far more than their share of the load. Those around them often see it quite differently.
5) “Whoa! There’s only so much I can do.” It’s like the parent who installs a “speed limiter” on their kid’s car — only so fast and that’s it. Others put self-imposed limits on what they can or will do. By always playing it safe, they deny themselves the opportunity to see how much they can accomplish.
6) “With so many meetings, I can’t get my work done.” You’re not alone if you feel this way. Companies are plagued with meeting mania wastes that wastes time and creates stress. Don’t complain; do something about it. Take a “how we can improve it” approach: meeting alternatives, requiring agendas that go to participants beforehand, stand up sessions, setting time limits, and three question participation evaluations.
7) “That’s not my job.” Not long ago, “silos” was at the top of the corporate jargon list — work groups, units, departments, and divisions operating totally separate from others. But countless individuals wall themselves off as if they completely isolated from the organization. They “write” their own job description and stick to it.
8) “I’m a hard worker.” Like beauty, hard work is in the eye of the beholder. Each of us has their own personal definition of what it means to them. But, frankly, it doesn’t make any difference what you and I may think it means. Pampering ourselves is out. Simply put, no one “earns points” or merits a “reward” today for hard work. What counts is measurable and it’s called results.
9) “Unless I get paid extra, I shouldn’t have to do it.” This is a tough one. An employer’ demands can go too far. And employees can be shortsighted by putting on the brakes too quickly and miss opportunities for taking on task that can showcase their capabilities and demonstrate their skills.
10) “Sorry, but I don’t know anything about that.” It’s not unusual to hear those words, particularly when contacting customer service. But that’s far from the only place. Unfortunately, they’re all too common throughout most businesses, sending the message that the person has stopped growing.
11) “My ideas aren’t important.” Not true! Whether they know it or not, most people have ideas and suggestions that can benefit a company. They are not only doing their job, but they think about what’s going on around them. It’s a mistake. If you’re one of them, take a chance because someone wants to hear from you.
12) “I meant to get it done. I’ll get right on it.” Why do some people agree to do something — and then ignore it by doing nothing, even after getting reminders? Sure, there are times when we all forget and a reminder helps. But, others can be chronic offenders and fail to respond even when offered help, being nudged, cajoled, and confronted. Everyone knows them: “If you want it done, don’t bother giving it to Brad.”
13) “I’ve been around long enough and the rules don’t apply to me.” Even though the words may never be spoken, actions make their meaning abundantly clear. Chances are, these are people who won’t be around much longer.
14) “I didn’t know you needed it so soon.” This just might be the most insidious attitude of all for one reason: It’s patently pathetic in its intent. While the words sound so innocent and disarming, it shrouds the fact that those who use this excuse portray themselves as victims. It’s not their fault the work didn’t get done; they didn’t know when it was due. Did they ask? Of course not. They blame someone else for not letting them know.
More often than not, it’s self-justifying and defensive attitudes that kill success. Rather than allowing someone to think we could have done more, perhaps much more with ourselves, how much better is it to have them say, “She’s done so much with herself. More than I ever thought she would.” We can call that success.
See the original article Here.
Source:
Graham, J. (2016 October 27). 14 everyday attitudes that kill success. [Web blog post]. Retrieved from address https://www.employeebenefitadviser.com/opinion/14-everyday-attitudes-that-kill-success
5 ways to salvage retirement
It’s a scary season, what with Halloween just around the corner, and some of the fears looming large in people’s minds focus on retirement. So it’s probably pretty appropriate that we tackle some of those fears head on, so to speak.
The Huffington Post addressed just that topic, pointing out five things people who are not yet retired can do to ward off at least some of the effects of what experts predict: that people’s standard of living will fall during retirement, thanks to low savings levels and poor planning for the last stages of life.
We scouted around the web to find some additional data on why, and how, retirement is expected to fall so short of people’s anticipation, and what they might be able to do to forestall that drop in expectations. Here’s what we found:
5. Figure out where you’ll live
A person’s home might be his castle, but whether it will be a fortress surrounded by a moat or a gracious palace can depend a lot on that old real estate saw, location, location, location.
The cost of your retirement home, how much you’ll pay in property taxes, the cost of living in the area and many other factors determine whether that retirement Shangri-La will be a cozy cottage for two in a university town, a bungalow on the beach or a penthouse apartment overlooking sparkling city lights, with museums, restaurants and theaters within an easy stroll — maybe even in another country altogether.
But there are other intangibles to consider, too — such as whether you’ll be so forlorn at leaving family behind that you’ll either be miserable in situ or spend half your retirement budget traveling back to see the grandkids. And how good the health care facilities are in your new location — that can make a big difference not just in your budget, but maybe even in how long you survive to enjoy those golden years. Not to mention the crime rate and whether you’ll have a social support system in place.
Check out any prospective homes thoroughly before you make the big move, and make sure they have what you need to help you thrive during retirement.
4. Start saving more
While economizing might not be — or feel — glamorous, watching that 401(k) or IRA balance climb can certainly make you feel like a million bucks. Keep that in mind as you’re browsing for a new set of golf clubs or that perfect dress for a special evening out — especially if you don’t plan on playing golf in retirement or dining out on the town, because spending now could cost you big-time later on.
According to AARP data, 3 out of 5 — that’s more than half, folks — of the households headed by someone 65 years old or older have zero money in retirement accounts. That’s zero, as in zip, nada, nothing. How far into retirement will that get you? Into a job, most likely, working during the time that’s supposed to be your well-earned rest after a lifetime of supporting yourself and your family — if you can get one, that is.
Look for ways to cut your spending so that you can turn that money right around and put it to work for you in retirement. Whether it’s making coffee and lunches at home to bring to work or switching nights out with friends at a restaurant to entertaining at home, find ways to sock more away for the future — your future — when you’ll be glad you did.
3. Learn to live on a budget
You may already be doing this, but if you’re not, it’s probably time to start. While you may be planning to work in retirement, the job market may have other ideas — and if you’re dependent on a combination of Social Security and 401(k) or IRA money, that will limit your options. For one thing, seniors have to deal with a job market that’s prejudiced against them — and that’s stacked against them in other ways, too.
Not only that, but depending on who wins the election, your Social Security benefit may not be as predictable as you’d counted on — and then there’s the question of cost-of-living increases. After no increase at all for 2016, seniors will see a paltry average increase of $3.92, according to CNN. That’s a skinny 0.3 percent increase — hardly enough to notice.
And considering how health care costs are rising, women in particular need to be wary of stepping outside of a budget’s constraints; a Nationwide Retirement Institute study found that women could end up spending 70 percent of their Social Security benefits just paying for health care. Considering that women not only overwhelmingly (80 percent!) claim Social Security benefits early, thus locking in a lower benefit rate for their lifetimes, they depend on it to pay for 56 percent of their expenses in retirement.
That said, get used to living on less — you’re going to be doing so for a long, long time.
2. Prepare your home for the long run
If you’re planning on staying put in the house you’re currently living in, make sure it’s prepared for potential changes in your health and/or mobility — particularly if you don’t have coverage for nursing home care. While many people believe that Medicare will pay for a nursing home, should they become disabled, that’s not the case unless their assets are pretty much exhausted. Of course, that won’t take long when paying for the cost of care at a nursing facility.
In addition to stairs, reachable cabinets and accessible bathrooms, there’s the question of how affordable your home is. Can you refinance your mortgage at a cheaper rate? Rent out a room? Pay the property taxes? Maybe you should consider downsizing to a more affordable house, perhaps in the same neighborhood, if your network of friends and family is local. That can save you not just on taxes, but on heating and cooling bills.
It may not be what you had in mind, so it's smart to start setting realistic expectations of what your future retirement might look like.
1. Lower your expectations
Do you somehow expect that when you retire you’ll be traveling the world, dining at fine restaurants and going to the theater for every new production? Unless you have Warren Buffett’s budget, get real.
Most seniors have to cut back substantially when they leave the workforce. You will likely be no different. It’s easier to deal with that reality if you prepare for it mentally in advance, and realize that you’ll have to plan your excursions carefully and budget for them in advance.
The market was brutal to retirement plans during the Great Recession, and unless you were uncommonly fortunate, the money you saved for retirement throughout your career has not regained all lost ground. That said, depending on what you plan to do during your retirement years, you may still find it’s the most rewarding time of your life — particularly if those plans don’t depend on money.
See the original article Here.
Source:
Satter, M. Y. (2016 October 24). 5 ways to salvage retirement. [Web blog post]. Retrieved from address https://www.benefitspro.com/2016/10/24/5-ways-to-salvage-retirement?kw=5+ways+to+salvage+retirement&et=editorial&bu=BenefitsPRO&cn=20161025&src=EMC-Email_editorial&pt=Daily&page_all=1