Ayco’s Jonathan Barber–senior vice president, Tax Policy & Research–is a subject matter specialist in compensation and benefits. These are the top five benefit trends that he is currently observing in Corporate America. Is your company considering these benefit strategies?
- Individual coverage health reimbursement arrangements (ICHRAs)
ICHRAs will allow an employer to reimburse eligible employees for individuals’ health insurance premiums (including Public Exchange coverage or Medicare) rather than offering employer-provided, group health insurance.
- Retirement plan leakage
Final hardship regulations make it easier for an employee to access employer sponsored retirement plan assets through a hardship withdrawal. Implementation of the new provisions is mostly optional on the part of the employer. Given the devastating impact such a withdrawal can have on an employee’s retirement readiness, employers should be evaluating their approach to the new regulations.
- 401(k) annuitization/lifetime income
As defined benefit pension plans disappear, it becomes more important than ever that employees have an effective decumulation strategy to make sure defined contribution plan retirement funds last throughout their lifetime. To help with this, employers are adding planning tools and education programs, installment payment options, specialized investment options focusing on income production during retirement and annuity investment options.
- Improved Roth 401(k) "Designated Roth Account" implementation and education
Employers are proactively offering Roth options and making sure employees understand the benefits and differences of Roth accounts compared to traditional pre-tax 401(k) accounts.
- Student loan and other debt management considerations
Student loan and other debt can diminish the likelihood that employees will sufficiently contribute to employer-sponsored retirement plans. By age 30, those with loans have about 50 percent less in their retirement accounts.1 To combat this problem, companies are realizing the importance of setting up programs to assist employees in managing such debt.
Employers who work with Ayco have regular access to our thought leadership from specialists in benefits, compensation and other areas. Contact us to see how Ayco can help your team.