Tax-Exempt Retirement Plans Have Varying Focuses

Heather Lavallee from Voya spoke with PLANSPONSOR about the different issues tax-exempt plan sponsors are dealing with and how Voya is especially working with health care retirement plan sponsors.

Heather Lavallee, president of Tax Exempt Markets at Voya Financial in Windsor, Connecticut, has been in financial services for 25 years, most of which was spent in the employee benefits space. She’s been with Voya Financial for nine years, previously working in employee benefits, but now with one year under her belt working in the retirement plan space.

Lavallee spoke with PLANSPONSOR about the needs facing the tax-exempt markets and what Voya specifically is doing for plan sponsors in the health care industry. She notes that Voya has the ability to service governmental, education and health care retirement plan sponsors.

“Each of those markets have different things taking place,” she says. For example, Lavallee recently attended the government conference of the National Association of State Retirement Administrators (NASRA) and saw a focus on pension reform, hybrid plans and how to communicate with participants to help them better prepare for retirement. The conference also addressed cybersecurity and leveraging data to help participants make the most of defined benefit (DB) and defined contribution (DC) retirement plan benefits.

“In the education market, we’ve seen heightened request for proposals (RFP) activity, especially with the litigation going on,” she says. “Plan sponsors are focusing on their investment lineups and fee structures.”

Lavallee notes that one good thing about the health care retirement plan market is it has a smaller decision making chain. They don’t have to go through the same committees and entities that education and governmental plans go through; it is more like in the corporate market. So, they are pushing through on using automatic plan features. In addition, there are parallels about how health care entities do business and how they look at their retirement plans. They are heavily focused on the importance of cybersecurity because it is also an important issue for patient data, for example. And they strive to engage patients to drive better outcomes and lower costs for patients. Similarly, she says, they strive to engage employees, increasingly through digital experiences to drive participation and contribution rates upward to improve outcomes.

Voya is looking to grow its business in the health care plan sponsor market, according to Lavallee. “There is so much focus on merger and acquisition [M&A] activity and consolidation in this space,” she says. “Health care plan sponsors have the same needs around participant savings, but we are wondering how we can help entities when each time they do an M&A it’s like implementing a plan all over again.” Voya offers help with communicating with participants, cybersecurity and compliance.

NEXT: Serving the health care retirement plan market and those with special needs

“We have strategic relationship managers for current clients to help them understand their goals when going through an M&A. We have a dedicated relationship manager [RM] and team working with them,” Lavallee says. “We work with plan sponsors and benefits administrators to pull together retirement plans in a unified fashion with reporting, documents and project management.

A second piece of Voya’s service to health care plan sponsors going through an M&A is leveraging communication specialists. “We have dedicated financial advisers working onsite who partner with plan sponsors to do education,” she says. “We are consultative, but also focused on implementation, participant communication and adviser support. Local advisers communicate with participants one-on-one.”

Lavallee adds, “What I think makes our model unique is having a strategic relationship manager that can look at a plan sponsor’s long-term or quarterly goals, an implementation manager focused on more complex issues, and local advisers onsite at health care facilities who develop long-term relationships with employees and can do more long-term financial planning. We are often told this is a differentiator in the health care retirement plan space.”

Finally, Voya notes that over the last 18 months they have focused on a part of the community they feel is underserviced—those with special needs and caregivers. The firm has launched Voya Cares to address this. According to a white paper about Voya Cares, nine out of 10 parents of children with special needs say they receive little or no financial support beyond their incomes. Many in that group also say that caring for a person with special needs gravely impairs their ability to plan and save for retirement.

At Voya Financial, there is an ongoing effort to examine and modify policies and benefits that support caregivers and employees with special needs. Voya Financial also continues to provide access to information, training, and other resources to help employees and their families prepare for their unique retirement situations as well as find educational resources. In addition, during 2017, Voya plans to offer its informational and caregiver retirement-planning services publicly via a series of pilot programs. 

Voya also supports the Achieving a Better Life Experience (ABLE) Act, which allows a person with disabilities or a legal representative to establish tax-advantaged savings accounts of up to $100,000 without affecting Social Security Supplemental Income (SSI). If SSI is not an issue, limits are generally expanded to between $250,000 and $350,000.