What Plan Sponsors Should Know About Lifetime Income Solutions

What Plan Sponsors Should Know About Lifetime Income Solutions

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The number of U.S. workers who are covered by a defined benefit pension plan dropped by nearly half between 1980 and 2008, from 38 to 20 percent, and continues to steadily decline. More employers have adopted a defined contribution plan, which shifts the responsibility of saving and making investment decisions to their employees. However, many participants underestimate how much they should have in retirement and can deplete their resources much sooner than planned. Thus, in the absence of a pension plan, the need for retirement lifetime income solutions is evident. What should plan sponsors know about adopting and implementing lifetime income solutions in their plan?

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Millennials in Retirement Plans

Encouraging Millennials to Participate in Retirement Plans

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In 2016, millennials became the largest generation in the U.S. labor force with an estimated 56 million workers. Born between 1981 and 1996, millennials now account for more than one out of every three working Americans. Despite its size, this generation is often overlooked by plan sponsors due to their focus on the needs of those participants nearing retirement. Without retirement plans tailored to meet their own barriers, millennial workers struggle to save adequately for retirement. While an obvious roadblock may be lingering student debt, millennial would-be savers face several additional unique obstacles. This multifaceted struggle presents plan sponsors with both a challenge and an opportunity. To attract and retain the largest age group of U.S. workers, employers need to consider the unique needs of this generation in a retirement plan context. Read on to learn how to encourage millennials to participate in your retirement plan.

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The American Student Loan Crisis – Plan Sponsor Solutions

The American Student Loan Crisis – Plan Sponsor Solutions

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At the end of each spring semester, millions of college graduates in the United States celebrate their college diploma in return for their hard work. With the hopes that their degree will bring a successful career, these graduates enter the workforce, often bringing with them tens of thousands of dollars in student loan debt. With 44.7 million Americans currently carrying an estimated $1.5 trillion in student debt, this financial burden will remain with many for decades. And as these graduates become part of the employee population of many companies, employers are now exploring their role on how they can assist with tackling this debt.

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Keys to an Effective Financial Wellness Program

Keys to an Effective Financial Wellness Program

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Financial wellness is a topic receiving a greater amount of attention in recent years, but many plan sponsors are unaware of what that really means for their employees. Financial wellness is vital to ensuring employees feel secure about their financial well-being, helping them meet current, future and ongoing financial obligations. Additionally, financial wellness programs help maximize participation in the company’s retirement plan. While there proves to be many benefits by offering a financial wellness program, it is not yet universal. If it isn’t already, establishing a comprehensive financial wellness program should be a priority for plan sponsors. We review five key components to making your wellness program effective.

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What is a Safe Harbor 401(k) Plan?

What is a Safe Harbor 401(k) Plan?

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There are a few types of 401(k) plans available to plan sponsors: the traditional 401(k), the Roth 401(k), the SIMPLE 401(k), and the Safe Harbor 401(k). Each plan has different benefits and drawbacks, but they all share one common feature: a requirement that the plan sponsor abides by that specific plan’s rules and regulations. Most 401(k) plans face an annual nondiscrimination test defined by the Internal Revenue Service (IRS), which ensures that the plan does not excessively favor highly compensated employees (HCEs) and that their contributions do not exceed the average contributions of non-highly compensated employees (NHCEs) by set limits. Failing to adhere to the IRS’s rules can risk the loss of the 401(k)’s preferable tax status and can be subject to penalties.

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