Blog Category: Employee Benefits
Smartphones seem to be organizing our lives one app download at a time. We can deposit checks, order groceries, get fitness coaching and socialize all from our mobile devices. This convenience and accessibility inspired the creation of HealthJoy, a comprehensive healthcare guidance and engagement platform. HealthJoy is designed to simplify healthcare benefits, lower costs and increase benefits satisfaction.
Baby Boomers are beginning to retire, creating a more competitive hiring market. In order to attract and retain top talent, employers need to offer more than just an enticing base salary and job title. Attractive benefits are (and will continue to be) a crucial part of a company’s ability to hire and keep key executives. In fact, certain benefits can have perks for both the employer and the executive. Nonqualified deferred compensation, when used correctly, is a planning solution that can be mutually advantageous.
Job hopping is on the rise. In fact, a new survey revealed that 64% of professionals feel that changing employment every few years is an effective way to get a higher salary.¹ This trend has led to more and more workers failing to update their contact information with previous employers, which is troublesome for pension plans because these individuals often become “missing participants.”
Companies often use a group annuity to move the benefit payment responsibility out of their pension plan. Known as a “pension buyout,” this transaction keeps the size of the pension plan manageable, minimizing volatility in the balance sheet. Group annuities are also necessary to continue the promised retirement benefits when a pension plan terminates.
Employees often feel pressure to minimize corporate travel costs. In an effort to save company dollars, many are turning to sharing economy services (such as Uber, Lyft and Airbnb). These collaborative consumption models allow peers to share their resources and time. They offer convenience and an average savings of 30% to 40% when compared to traditional hotel and cab services. Many people are using these options for personal travel, so it makes sense that they’d want to use them for business or corporate travel.
Keeping up with the latest employee benefit news can be a job in itself. Benefit trends and regulations are constantly changing. Because they play such a vital role in attracting and retaining quality employees, it is crucial to stay on top of the most recent developments in this field.
Now is the time to rethink your approach if your organization has not transitioned from a traditional compensation and benefits plan to a total rewards strategy. Historically low unemployment rates continue to create a competitive labor market, and the talent pool is rapidly changing as baby boomers retire and millennials join the workforce. In response to this staffing environment, employers are beginning to modify their total rewards strategies and offer things like chef-prepared meals, yoga classes, massages, student loan repayment programs, unlimited paid time off (PTO) and sabbaticals.
On December 20, 2017, Congress enacted a far-reaching tax reform package called the Tax Cuts and Jobs Act (“the Act”). The good news is that the current law permitting nonqualified deferred compensation plans (NQDCPs), including Code Sections 409A and 457, was preserved. Many of the Act’s provisions affecting individual taxes are not permanent and are scheduled to expire after December 31, 2025, unless a future Congress acts to extend those provisions.
Consider a worker who is 55 and making $50,000 per year. He plans to retire at age 67, at which time Social Security could make up 43% of his retirement income. Assuming he can live on 75% of his pre-retirement income, he would need to make up an additional 32% in retirement savings.
The Department of Labor (DOL) has issued final regulations on disability claims procedures which apply to disability claims filed on or after April 1, 2018 for ERISA plans that condition benefits or vesting on a determination of disability. The purpose of this bulletin is to assist employers/plan sponsors with the process which “may” be necessary with regard to plan amendment.