Priddy offered those observations at the opening session of the 19th Annual Forum of the PENJERDEL Employee Benefits & Compensation Association, noting that as a consequence of the falling stock market plan participants are seeing a fall in their 401(k) plan values for the first time.
This is particularly troubling for employees in their fifties and sixties, since 1999 data shows that, on average, the former group had 69% of their account invested in stocks, while the latter had 58%.
Health costs a top priority
Also discussed were spiraling health costs. The Deloitte & Touche and International Society of Certified Employee Benefits Specialists, Top 5 Benefit Priorities survey found that more than 70% of human resources professionals rank “controlling health benefit costs’ as their number one priority.
The Health Research and Educational Trust and Kaiser Family Foundation Employer Health Benefits 2000 Annual Survey reported that health insurance premiums were up by 8.3%, between 1999 and 2000, compared with an increase of just below 5% in the previous year.
This represents a 7.1% increase for self-insured plans and an almost 10% increase for insured plans. In real terms this translates to an increase of $156 for individual coverage and an increase of $609 for family coverage, while estimates for cost increases in 2001 range from 9 to 12%
Implementing regulatory changes
Patterson pointed out that at the close of the 2001 plan year, several regulatory changes that have been released over the last five years must be implemented. These may include:
- amending the retirement plan document, by the start of the 2002 plan year,
- deciding whether to use 401(k) testing safe harbors, or
- deciding on what data to use for 401(k) nondiscrimination tests,
- and select other options available under these laws
In addition, human resources professional will need to:
- adopt ERISA benefit claims processing and appeals deadlines ? shorter than under previous rules
- decide whether to allow participants to change their benefit elections during the year.
- provide more detailed information on summary plan descriptions
- revise health plans to eliminate the use of “actively at work’ and “nonconfinement’ clauses.