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Topical Benefits Issues & Analysis

“Crisis” Management: Uncertainty and the Workplace

This August 2014 Issue Brief summarizes EBRI’s 74th policy forum held in Washington, DC, on May 15, 2014. The symposium featured experts who examined the current and projected future of retirement readiness, employment-based healthcare, and the role that approaches like financial wellness can play in alleviating the strains of uncertainty.

2012 Bank of America Merrill Lynch Workplace Benefits Report

This first quarter 2012 survey of 1000 employers that offer 401(k) plans and 1000 employees looks at the financial benefits employers provide to employees, including retirement savings plans, health savings accounts and financial advice, noting the intersection of the rising  costs of healthcare with saving for retirement.

2013 Trends in Non-Qualified Deferred Compensation; Spotlight on Plan Participants

This June 2014 research report from The Principal® focuses on participants’ experiences with non-qualified deferred compensation (NQDC) plans. Based on online interviews conducted in late summer 2013, the survey examined factors that drive satisfaction with these plans, how deferral decisions are made and the role of NQDC in retirement readiness for key employees.

2014 Inside Benefits Communication Survey

The 2014 Inside Benefits Communication Survey, a collaborative research effort from the National Business Coalition on Health and Benz Communications, is a national survey that explores how companies are making investments in benefits communications and the return on those efforts.  The survey’s data was collected from more than 300 high-level business professionals and provides greater insight into how companies are planning and implementing benefits communication.

70 Is the New 65

This article by Alicia Munnell of the Center for Retirement Research at Boston College demonstrates age 70 is now the “real” retirement age. The article demonstrates how changes in life expectancy and in Social Security’s Delayed Retirement Credit, the tax treatment of benefits and new, income-adjusted charges for basic Medicare and Part D mean that for many all negatively affect income replacement rates.

A Review of the Workplace Wellness Market

This study of employer-sponsored wellness programs was prepared for the Department of Health and Human Services and the Department of Labor in conjunction with provisions under ACA that expand the use of incentives in nondiscriminatory programs. It is based on a review of the current literature on the topic and summarizes typical program components, the prevalence of wellness programs among employers and their impact, and the use and effect of financial incentives in these programs.

American Benefits Council: A 2020 Vision–Flexibility and the Future of Employee Benefits

The American Benefits Council has introduced its strategic plans for health and retirement policy, providing 46 specific regulatory recommendations for Congress to consider in easing the burdens on employees, employers and government agencies.  The strategy suggests the advocacy group will work to achieve public policy reform that more closely unifies healthcare and retirement outcomes.

An Examination of Controlling Health Care Costs Through Limited Network Insurance Plans

This September 2014 paper from the National Bureau of Economic Research looked at the effect of narrow networks on cost and quality by examining Massachusetts GIC, the insurance plan for state employees, which introduced a major financial incentive to choose limited network plans for one group of enrollees and not another. The report finds that overall spending decreased among those enrolled in narrow networks, although spending for primary care actually rose.

Analysis Shows Upward Trend in U.S. Healthcare Cost Increases in 2014

In 2014, U.S. companies and their employees saw a slight uptick in the rate of U.S. healthcare cost increases, according to an analysis by Aon Hewitt.  The summary includes costs by plan type from 2010-2014, comments on managing dependent eligibility and subsidies and private health exchanges.

Are Private Health Insurance Exchanges the Wave of the Future?

This EBRI Issue Brief examines the growing interest among employers in private health insurance exchanges as an alternative to the traditional model of employer-sponsored healthcare benefits. The article provides a good explanation of how private exchanges might operate.

Building Enduring Retirement Income Systems

This initiative from the American Academy of Actuaries recommends principles for retirement plan design that the organization believes will lead to a better functioning U.S. retirement system. It urges policymakers to re-examine current regulations and practices in light of the prevalence of defined contribution plans as the primary retirement savings vehicle available to U.S. workers. Among the issues this initiative raises is redefining the role of the employer.

DB to DC Plan Shift Slowly Stabilizing

A September 2014  analysis by Towers Watson of retirement plan offerings at Fortune 500 companies suggests the shift from defined benefit (DB) plans to defined contribution (DC) plans may be slowly stabilizing, with fewer companies actively moving away from DB plans and establishing new DC plans for salaried employees than at any other point over the last decade.

Delays in Retirement Among Some Workers

This TowersWatson article, based on the firm’s 2013/2014 Global Benefit Attitudes Survey, examines changing retirement patterns of workers in the U. S. and elsewhere. Noting the tendency to delay retirement and increased participation in the workforce of older workers, the article also highlights those employees who are the most likely to postpone retirement.

Due Diligence for Target Date Funds Goes Beyond Examining the Glide Path

This White Paper by Vanguard argues that looking solely at the glide path of target date funds-how its asset allocation changes over time– is an incomplete approach to the due diligence plan sponsors should perform on these widely used defined contribution investments.  The paper identifies other areas that deserve scrutiny as part of any due diligence effort.  These include glide path stability, sub-asset allocation and cost.

Eighth Annual Study of Employee Benefits: Today & Beyond

Findings from Prudential Insurance’s 8th Annual Study of Employee Benefits: Today & Beyond show that  employers are taking a multichannel approach to meet the needs and preferences of their employees.   Some of the more traditional methods are still reporting in the top five, but there has also been a jump in employers reporting great success with newer communication vehicles.   The survey was conducted online  in August, 2013, and included three distinct groups:  employers, employees and benefits consultants and brokers.

Engaging Consumers in Changing Health Behaviors

This article from Buck Consultants summarizes relevant concepts and findings from the fields of psychology, decision research, and social marketing and identifies best practices in developing consumer engagement to aid employers  in creating health care programs and tools to control costs and improve workforce health and productivity.

Ensuring Good Plan Governance

This short article by attorney firm Morgan Lewis & Bockius LLP lists housekeeping actions to streamline plan administration and minimize exposure to breach of fiduciary duty claims and potential litigation.

Explanation of the Affordable Care Act’s December 2013 and January 2014 FAQs

This Aon Hewitt Bulletin discusses the provisions in the December 19, 2013, and January 9, 2014 FAQs released by HHS, DOL and Treasury in connection with implementation of the Affordable Care Act.  Topics covered include cost sharing, wellness, preventive services and the transitional reinsurance fee.

Frequently Asked Questions About 401(k) Plans

This September 2014 report from the Investment Company Institute answers frequently asked questions about 401(k) plans, including what percentage of U.S. retirement assets they represent, what the average balance is, and how participants have allocated their investments.

Gallup and Healthways Redefine ‘Wellness’

A February 4, 2015 article in Gallup’s Business Journal highlights a new approach to wellness advocated by Gallup and its partner, Healthways. The two have coined the term “well-being” to supplant wellness and have broadened the definition to encompass five measureable, interdependent elements.

Healthcare Cost Variations – A Comparison of 24 U.S. Urban Areas

This August 2013 study by the Benefits Services Group and HCTrends examined the cost-per-episode of providing care in 22 different medical practice areas across 24 urban areas in the United States and also looked at the efficacy of treatment. The differences among the cities highlight how difficult it is to make generalizations about costs and effectiveness of medical treatment.

Hobby Lobby Decision Breaks New Ground

This alert from Nixon Peabody covers the Supreme Court’s controversial ruling in the Hobby Lobby case.  Read background on the case, the ruling and the far reaching effects for the future.

How Much Should People Save for Retirement?

A July 2014 report from the Center for Retirement Research reveals that, according to  its National Retirement Risk Index (NRRI),  half of today’s working families are “at risk” of not being able to maintain their standard of living once they retire.  This report   examines how much households need to save  to maintain pre-retirement living standards by probing these questions :  What is the average amount of saving that will come from retirement savings plans?  What is the average required saving rate to produce adequate retirement income?  Given current saving patterns, how much would households have to save?

HSA Savings: Potential Accumulations

A July 2014 analysis in EBRI’s Notes shows that a person contributing for 40 years to an HSA could save up to $360,000 if the rate of return was 2.5 percent, $600,000 if the rate of return was 5 percent, and nearly $1.1 million if the rate of return was 7.5 percent, and if there were no withdrawals.

Impact of ACA’s 90-Day Enrollment Waiting Period Rules

This March 2013 commentary from Aon Hewitt discusses the ACA’s proposed regulations limiting enrollment waiting periods for group health plans to no more than 90 days. The article also highlights the fact that after 2014 there will no longer be a need to issue HIPAA Creditable Coverage Certificates.

Implications of DC Plan Participants’ Retirement Distributions

A December 2013 research paper by Vanguard discusses the implications of the behavior of retirement-age DC plan participants who sever employment. The study finds that most have preserved their retirement savings in a tax-deferred account for five years.

Incentives to Shape Health Behaviors

This February 2014 article published in the Journal of Workplace Behavioral Health examines the use of incentives to shape health behavior and looks at the differences between “patient-centered” and “person-centered” approaches. The authors conclude that while it isn’t possible to create incentives that will be appealing to everyone, a person-centered approach would  allow individuals to self-match to incentives and engage them in the decision-making process. This could lead to better outcomes.

Is a Permanent Lump Sum Window Distribution a Viable Pension De-Risking Strategy?

This posting by Jeffrey Keminar on Milliman’s Retirement Townhall blog poses the question of whether plan sponsors should consider a permanent window that would allow terminated vested defined benefit participants to take a lump sum distribution. Advantages cited include no longer have to pay PBGC premiums for participants who take the lump sum and alleviating concern at a future date about trying to locate a participant.  The posting also highlights potential downsides as well as plan administration and compliance responsibilities associated with this strategy.

Millennial, Gen X, and Baby Boomer Workers and Retirees: Retirement Saving & Spending Study

T. Rowe Price’s June, 2015 Retirement Saving & Spending Study revealed that across groups of 401(k) savers, millennials are following better financial habits than those of baby boomers. The slide presentation uncovers how different generational workers are saving and spending, and identify the statistics that differentiate these populations.

PPACA’s Out-of-Pocket Maximums and Preventive Services

This analysis from Towers Watson examines the implications of the 20 questions included in the DOL’s Frequently Asked Questions #15.  The analysis focuses on out-of-pocket limits for 2014, preventive services without cost sharing and changes that may be necessary for most plans in order to be compliant.

Private Exchanges and the Rise of Retail Health Coverage

This report from PricewaterhouseCooper’s Health Research Institute is based on data from the organization’s 2014 Health and Well-Being Touchstone Survey. (A link to the full survey is also available on this site under Benefits Research & Surveys.)  The report discusses the four types of private exchanges and names the major players in each. It also illustrates factors that influence a company’s interest in moving to a private exchange and touches on the pros and cons of such a move.

Private Insurance Exchanges Continue to Evolve

This article by Carol Harnett appeared in the April 9, 2014, edition of HR Executive Online. The Q&A format makes for a good “primer” on the topic of private exchanges and explores issues that employers should consider before making the jump to this new model for group benefits.

Report on the Economic Well-Being of U.S. Households in 2013

This July 2014 report based on survey conducted by the Federal Reserve Board in September 2013 captures a snapshot of the financial and economic well-being of U.S. households. The survey also examined the issues they face, their recovery from the Great Recession and perceived risks to their financial stability.

Research Examines Retirement Readiness Challenge and What Employers Can Do to Improve 401(k) Plans

This October 2014  report from Transamerica’s 15th Annual Retirement Survey reveals positive news for retirement savings in America, but says that there’s still room for improvement.  The report is based on two separate phone surveys conducted earlier in 2014 with 751 for-profit employers and 4143 workers at for-profit firms.  The surveys explored employers’ views on the economy, whether they offer retirement benefits to employees, and American workers’ retirement readiness and expectations. The report recommends steps employers can take to improve their 401(k) plans based on survey results.

Research Measures DC Plan Participants’ Savings and Investing Behavior

Research from Aon Hewitt, based on the behaviors of 3.5 million eligible employees in 141 defined contribution plans, provides a tool for plan sponsors to gauge how their own plan participants’ behavior stacks up. The report also makes recommendations for improving outcomes through plan structure and communication.

Results of 401(k) Wellness Scorecard Reports Positive Trends in Participant Behavior and Plan Design

Bank of America Merrill Lynch’s 401(k) Wellness Scorecard results for the first half of 2014 indicate that saving for retirement and health care expenses was a priority for employees of all ages.  It also suggests that increased mobile access, 401(k) auto features, and more personalized advice have made employee benefit plans more valuable and easier to use for the typical participant.

Retirement Income Adequacy

This 2012 research from Aon/Hewitt looks at retirement income adequacy at large companies and concludes that employees should target 11 times final annual pay to ensure adequate income in retirement.

Retirement Planning in a Post-Crisis Economy

This is the first in a three-part series of reports based on Towers-Watson’s July 2011 survey of current workers about retirement and healthcare benefits. In its fifth consecutive year, the survey encompasses responses from 3074 people about their employer-sponsored retirement and healthcare benefits. The initial report focuses on workers’ attitudes towards their household finances and retirement readiness.

Securing Retirement Income With Annuities

This March 2015 article in USA today discusses QLACs (Qualified Longevity Annuity Contracts) and how they may offer retirees some guarantees that they would not otherwise get in their retirement plans.

Surge in Employees’ Share of Health Costs

An article from the Society of Human Resource Management dissects a 2014 UBA Health Plan Survey and discusses how employers continue to shift more of the financial burden of health coverage to employees through out-of-pocket cost increases and reductions in family benefits.

Survey Highlights: Assessing the New Retiree Experience

An online survey of recent retirees and “near retirees” conducted in February and March 2014 by T. Rowe Price shows many retirees are living adequately on less, while   a majority of near retirees say they will have to adjust their style of living in retirement.

The Fidelity Investments Millennial Money Study: Facts, Figures and Findings

The results of Fidelity’s “Millennial Money Study”, conducted in April 2014, show many Millennials are fully engaged in their financial futures, and some of the results of its study challenge the common stereotypes about how this generation approaches planning for the future.

The Role of Longevity Annuities in Providing Retirement Security

This November 2014 economic study by The Brookings Institution defines and discusses longevity annuities and how they could increase expected financial security for middle- and -upper -income retirees who have substantial financial assets at the time of retirement.

Vanguard’s How America Saves 2013

This annual study looks at Vanguard’s database of plan sponsors and participants and reports on the latest trends in employer-sponsored retirement plans and participant behavior.

White Paper on Women & Retirement Plans

This White Paper from Lincoln Financial Group’s Retirement Power Research Series examines women as a discreet segment within defined contribution plan participants.

“Retirement Vision 2020” Prescribes Successful Savings Strategies to Drive Better Outcomes

A Fidelity white paper, “Retirement Vision 2020″  identifies steps that plan sponsors, advisors, consultants and Washington can take to ensure that as many American workers as possible, across all generations, are prepared for retirement. The paper includes such recommendations as designing a retirement plan for income replacement, accounting for uncovered healthcare costs in retirement and using aggressive defaults for unengaged employees. The paper also advocates personalized help as employees transition into retirement.