In 1980, the concept of the 401(k) as we know it was born at the Johnson Cos., a benefits consulting firm located not too far from my home in Pennsylvania. Sadly, the founder of the firm, Edwin T. Johnson, passed away last month at home after a long battle with cancer. Mr. Johnson had been helping his clients with pensions, retirement plans, and health insurance since he started his company back in 1963. Continue reading “A Sad Farewell”
Now that we’re all back to work after celebrating Labor Day, don’t let the fun stop – continue the celebration by recognizing National Payroll Week(NPW) at work. This special week celebrates the economic, cultural, and social achievements of workers and the significance of “an honest day’s work for an honest day’s pay.” Started in 1996 by the American Payroll Association, NPW is a national campaign to help America’s workers understand more about their paychecks, the payroll withholding system and other payroll-driven benefits. Shining a spotlight on employees’ paychecks is a great way to transition to your upcoming open enrollment by getting your workforce already starting to think about their paycheck and current deductions. Continue reading “Are You Ready for National Payroll Week?”
On the final day of the ISCEBS Symposium held this past month in San Francisco, Adam Wootton, Ph.D. with Towers Watson, kicked in the fun factor during his morning session on Using Games to Increase Employee Education. It was obvious that Adam loves his job as Director of Social Media and Games, and he shared some very interesting facts about gaming in the U.S. It was no surprise that 2/3s of American households play computer games, but what did amaze me was that 40% of all players are women and that adult women represent a greater portion of the game-playing population than boys age 17 or younger (which is what I envision as the typical gamer). Actually, the average gamer is 34 years old and has been playing for 12 years. Now, when I think about online games, what comes to mind is Angry Birds or World of Warcraft, which so far I have avoided getting hooked on. But what surprised me was that frequent flyer programs can also be considered games since members accumulate points, you can win prizes, and there are the status goals of reaching gold or platinum levels. So what does this have to do with helping your employees? Continue reading “Can You Game Your Employees To Take Action?”
An interesting topic I heard repeatedly at this month’s ISCEBS Symposium in San Francisco had to do with the concern of future health care costs becoming a critical variable in the retirement income equation. Several of the major plan providers held sessions that focused on the next generation of retirement planning tools that will be needed to recognize and personalize health-related issues. By now, most of us have heard the estimate of close to a quarter million dollars that a 65 year old married couple may face in out-of-pocket health costs throughout the rest of their lives. But since that’s an average, some will need much more. Some will need much less. This will depend on the health and medical needs of the retired couple, so that is why Putnam Investments has recently introduced a new retirement calculator that incorporates 7 data points from a health risk assessment into the income needs formula to estimate future projected healthcare expenses. Continue reading “The Intersection of Health and Wealth Planning”
Over the next few weeks, I will be providing a summary of some of my favorite sessions I had the pleasure of attending during this year’s 31st Annual ISCEBS Employee Benefits Symposium. The 3 day event in August was held in San Francisco and brought together hundreds of credentialed benefits and compensation professionals from both the U.S. and Canada. Continue reading “What’s Ahead for the Future of Our Retirement System?”
As the Olympics come to an end, I’m proud of how many medals our American team is coming home with, but not quite as thrilled with the tax bill they’ll face for winning. It’s not the value of the medal itself that the IRS wants its share of, it’s the prize money that comes with a gold, silver or bronze that is taxable. The U.S. Olympic Committee rewards Olympic medalists with cash honorariums: a gold medal brings $25,000, silver medals get $15,000, and a bronze is worth $10,000. As calculated by the Weekly Standard, the IRS will take $3,500 of a bronze athlete’s winnings, silver medalists will owe $5,385 in taxes, and winning the gold (which is priceless) will set Ryan and Michael each out $8,986 per race. Continue reading “Going for the Gold Can Be Taxing”
The temperature isn’t the only thing rising this summer – our group health insurance is going up over 14%. So, as part of my role on our benefits committee, I reviewed several different health carriers to see if there were any more affordable options. Luckily for us, there was one. However, this will now involve having all the employees fill out enrollment applications within the next few weeks to make the September 1 deadline to replace our existing plan. While we are going through the hassle of changing health plans, we also decided to switch to an HSA custodian that offers more competitive investment options. With these changes coming up pretty quickly, it made me wonder if there was a secret to a successful open enrollment – instead of the yearly rush to communicate any changes to our small group of employees. Continue reading “Are You Ready for Open Enrollment?”
The 31st Annual Employee Benefits Symposium, hosted by the International Society of Certified Employee Benefit Specialists (ISCEBS), will be taking place in 2 weeks in San Francisco. For 2 ½ days, you can immerse yourself in technical and strategic sessions cutting across the major issues and challenges you are facing—and you’ll be in good company. The Symposium has a reputation of bringing together some of the brightest minds in the benefits and compensation industry and providing abundant opportunities to rub shoulders with a wide variety of HR professionals. Continue reading “What Are the Hot Topics at This Year’s ISCEBS Symposium?”
Last week I hit the road to conduct retirement planning sessions for a couple of mid-sized companies up in New England, and many of the attendees had some serious concerns about the future of Social Security. I heard younger workers complaining that Social Security is a Ponzi scheme and older workers expressing their confidence that any fixes to Social Security probably won’t hurt their own benefits since past changes have been gradually phased in over time. Not surprisingly, many of the misconceptions that were being voiced to me are on the list of The Top Ten Myths About Social Security by Morningstar columnist Mark Miller. Continue reading “Are Your Employees Falling for These Social Security Myths?”
Last week’s east coast storms came as a shocking surprise to many of us living near the Chesapeake Bay. High winds toppled trees like dominoes, lightning zapped out the power, and a tidal surge flooded the marinas. Mother Nature was not in a good mood last week, and your employees may have been on the receiving end of her wrath. Whether it was a tree hitting Bob’s roof, lightning causing an electrical surge that fried Kenny’s electronics, or churning water causing damage to Sue’s cabin cruiser, you might not even be aware of the extent of the damages that your workforce may be facing and the financial hardship these repairs could cause. Continue reading “Could Your Employees be Facing a Hazard From Mother Nature?”
Surprisingly, Michael Phelps only placed third in one of last week’s Olympic trials. Will you be just as shocked if your plan’s mutual funds don’t end up rating a gold or silver with Morningstar’s new forward-looking mutual fund ratings? Continue reading “Are Your Plan’s Mutual Funds Olympic Medal Material?”
As financial wellness becomes more of a common component to workplace wellness programs, many smaller employers are considering the cost sharing aspect of bringing financial guidance to their employees. With tight budgets, some CEOs view the ability to meet with a financial planner during working hours as a perk that employees should be happy to pay for. But are they willing? Continue reading “Should (and Would) Employees Pay for One-on-One Financial Guidance in the Workplace?”
As we move farther away from the height of the Great Recession, many employees appear to have put it behind them, since we are seeing stress levels due to financial concerns steadily decreasing over the past few years. This drop in financial stress levels is based on recent trend analysis research that I wrote about last month for our 2012 Special Report on Financial Stress. Continue reading “Do Employees Have A False Sense of Security About Their Finances?”
Some of the most common questions that I’ve been receiving from employees during recent retirement planning workshops relate to confusion around the proper use of target-date funds. Ironically, these investment options are designed to simplify rather than complicate the process of saving for retirement. When used correctly, target date funds can help employees allocate and re-balance their investment assets appropriately to achieve their retirement goals with one stop diversification. In fact, more than three-quarters of all 401(k) plans now offer target-date fund options for plan participants and in many plans, they serve as the default investment for automatic enrollment. Continue reading “What Your Employees Don’t Know About Target Date Funds Could Hurt Them”
In just 3 weeks from now, I’ll be traveling to Atlanta for this year’s SHRM Annual Conference and Exposition, which takes place June 24 to June 27. In addition to this year’s entertainer, Jerry Seinfeld, there are so many opportunities to learn what’s new and cutting edge in the HR field, from practical tips to innovation in HR to motivating people. I’m excited to be able to share my own experience in the field of financial wellness, and I’ll be speaking about Health and Wealth: Adding Financial Wellness to Your Wellness Program on Monday, June 25. Using a case study of a Fortune 500 company that has been embedding financial wellness within their wellness program for the past few years, I’ll be revealing the results of an ROI analysis and sharing best practices for financial education. Continue reading “Meet Me in Atlanta”
I managed to cross the finish line last weekend at the Kennett Run, a local 5k race I’ve run the past few years. I don’t like to exercise, but this event provides enough incentives that even I am inspired to lace up my sneakers and hit the pavement. Here are some of the tactics that got me motivated: Continue reading “Inspiring Savings with a 5k Challenge”
I recently spoke to an employee who had decided, at age 54, that it was time to start focusing on retirement. Her goal was to retire at age 65, and she was wondering if that would be possible, considering she had not been saving for retirement for the past several years. She’d been in a financial fog during that time while trying to recover both emotionally and financially from a rough divorce. Continue reading “U.S. Chamber of Commerce Speaks Out on the Future of Retirement Security”
So what is DIAM? It stands for Disability Insurance Awareness Month, sponsored by the Life and Health Insurance Foundation for Education (LIFE). Many employees are unaware of the disability coverage that may be available to them as an employer-sponsored benefit, so spread the word this month about your workplace disability insurance. Continue reading “Are You Aware That May is DIAM?”
Would the government want to encourage workers to save LESS? A recent proposal by the deficit reduction committee calls for a reduction to the total combined annual limitations for both the employer and employee to retirement savings plans. Called the 20/20 Cap Proposal, the committee suggested a cap of the lesser of 20% of an employee’s compensation or $20,000 in annual total employer and employee retirement plan contributions. Although this sounds higher than the current 2012 deferral limit of $17,000 that employees are restricted to now, the 20/20 Cap Proposal will also include employer contributions that now has a $50,000 or 100% of income limitation for 2012. This combined limit of only $20,000 will severely limit the tax benefits of business owners to sponsor a retirement plan. According to the American Benefits Council, “ When a typical small business owner evaluates the significant legal responsibilities, risks, and costs of voluntarily sponsoring a retirement plan, it is often the promise of meaningful tax benefits for key employees that is the deciding factor in choosing to establish and maintain a retirement plan. But if tax benefits to decision-makers are substantially diminished, businesses that would have considered plan sponsorship may no longer do so, and existing plan sponsors might reduce employer matching contributions or stop offering retirement plans altogether. All employees would suffer because employer sponsorship offers considerable advantages for workers, including strict fiduciary standards; participation rules that ensure that benefits are delivered across all income groups; easy payroll reduction; lower fees from group participation; access to financial education; and often significant employer contributions.” Continue reading “A Vision of Retirement Under the 20/20 Proposal”
A recent tax reform proposal may bring the end to the cherished tax shelter of a retirement plan deduction. During testimony to the U.S. Senate Committee on Finance last September, William Gale discussed a proposal to eliminate the current tax deduction on retirement savings plans and suggested replacing it with a flat-rate refundable credit that would be deposited directly into the saver’s account. Gale, who is the Director of the Retirement Security Project at the Brookings Institution, wants to see a new incentive structure for contributions to retirement savings accounts by changing the treatment of retirement savings in three ways: Continue reading “The Proposed Retirement Security Project: Could Retirement Plan Deductions Get Cut?”
