Companies are looking for ways to reinvest some of the savings from the corporate rate reduction under Tax Reform back into their employees. The key is finding creative benefits that are most effective in helping employees over the long term.
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 life. To help with this, companies are adding annuity investment options and lifetime income payout options to their plans.
Companies 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 can diminish the likelihood that employees will sufficiently contribute to company retirement plans, and the stress of such debt can result in less productivity1. To combat this problem, companies are realizing the importance of setting up programs to assist employees in managing such debt.
Companies are trying to determine the best actions to take now to avoid the application of the 40% excise tax on high-cost health plans, known as the Cadillac tax that is set to start in 2022. Advance preparation is critical and has already included such steps as scaling back coverage, increasing employee out-of-pocket expenses, and reducing employer HSA contributions.
1PricewaterhouseCoopers April 2017 Employee Financial Wellness Survey.
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