Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
March 24th, 2015
Benefits & Administration
Tangible Retirement Messaging Drives Better Outcomes
When it comes to workplace retirement planning and inspiring plan participants to improve their outlook, simpler messaging is often the most effective, says Stuart Robertson of ShareBuilder 401k. According to Robertson, just a $500 increase in annual savings can result in an extra $110,000 over a 40-year time horizon. Discussing the savings math with PLANSPONSOR, Robertson noted that a $500 increase matches the Internal Revenue Service (IRS) deferral limit increase scheduled for plan year 2015.Read more >
Empower Finds Four Drivers to Lifetime Income Success
Americans are on track to replace 58% of current income in retirement, and four factors can help increase that number dramatically, according to Empower’s 2015 Lifetime Income Score research. The 58% replacement rate (including Social Security), found in the fifth edition of this research, is a slight dip from last year’s reading of 61%. Although the research covering 4,000 Americans found that lifetime income scores—the trajectory to replace current income in retirement—are driven much more powerfully by savings behavior than by income level, Empower’s research found there were four factors that had the most influence on retirement preparedness.Read more >
CDHP Cost-Saving Not Just a One-Time Event
Health care cost growth among firms offering a consumer-directed health plan (CDHP) is significantly lower in each of the first three years after offer, according to a research paper published by the National Bureau of Economic Research. Using data from 13 million individuals in 54 large U.S. firms, the research results suggest that—at least at large employers—the impact of CDHPs persists and is not just a one-time reduction in spending. However, researchers did find the decrease in spending may be smaller in year three compared to year one post-offer.Read more >
Multiemployer Plans Need Consistent Returns to Fully Rebound
Multiemployer plans have not fully rebounded from the 2008 financial crisis because returns have not kept pace with growth in liabilities, according to Milliman. The overall funding shortfall for all U.S. multiemployer plans increased by $5 billion for the year ending December 31, 2014, while the aggregate funded percentage decreased slightly, from 81% to 80%.Read more >