Improve the employee pension plan experience

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The COVID pandemic has disrupted virtually everything, including the pension plan space, although in many cases for the better. Michael Ingram, Partner and Wealth Advisor at Octavia Wealth Advisors LLC in San Diego, explains how employers are adapting to the latest trends and best practices to improve the employee experience. Octavia is a wealth management company that also manages pension plans for companies.

Katie Kuehner-Hebert: What are the latest trends in pension plans?

Michel Ingram: Now that the job market is so tight, employers are choosing to change the eligibility date for new hires to join their company’s pension plan to better attract employees.

Michael Ingram, Octavia Wealth Advisors

Previously, the eligibility date was one year or six months after hire, but now a number of employers are reducing it to three months or even immediately. This is purely due to the pandemic. Many people enjoyed working from home, and when their employer told them it was time to return to the office, many Baby Boomers likely decided to retire early, creating an even greater demand for workers.

Another trend I see in the market is that of employers wanting to implement financial wellness programs for their employees – budgeting, debt management, life insurance and even how financial stress can impact the health of a person. It is the number one cause of stress in the workplace, so if employers can help relieve stress, they can make people much more productive employees. Financial wellness programs are quite holistic.

Registrars like Transamerica offer financial wellness programs through their platform, but it’s really up to the company’s pension plan financial advisor to encourage workers to use the tools. There are also third-party apps like Well Cents that employers can implement with their staff to help improve engagement.

Another trend is specific to California: next June, employers with more than five employees must set up a pension plan or register their employees in a public plan, or pay a fine.

What’s your advice on how plan sponsors should best communicate with employees?

In addition to offering financial wellness programs, employers should also offer ongoing training seminars after the registration period. I have conducted a number of employee seminars on behalf of clients, covering topics such as Social Security, Medicare, University Planning, Life Insurance, Cryptocurrency and others. alternative investments.

Some employers like it, and some don’t. They don’t want to deprive employees of their working time, and some don’t want to encourage everyone to participate in their pension plan because they don’t want to match contributions. But employers who like it have more foresight because they see it as part of financial well-being that can improve their bottom line as well.

How can plan sponsors improve the employee enrollment process?

One way to improve the process is to implement automatic enrollment. Initially, employees automatically sign up for a certain percentage, then an advisor contacts them to see if they prefer to opt for a more or less aggressive percentage. They can also choose to open a tax-free ROTH IRA. Many people prefer to define it and forget it, but employers can encourage their workers to take a much more active role in their retirement plans.


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