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5 Retirement Plan Trends for Your Business

As the year starts to ramp up, it’s time to see what’s making the headlines and garnering the focus of plan sponsors and recordkeepers. Whether you offer a retirement plan as part of a competitive benefits package or simply as a vehicle for employees to save for retirement, these trends are worth following, as they have a way of eventually becoming the norm.

1. Focus on Retaining Retiree Assets

Retiree assets can account for a significant amount of plan assets. With boomers retiring and withdrawing money in record numbers, this can result in negative cash flows. According to Cerulli Associates, in 2014, overall 401(k) distributions exceeded contributions for the first time,1 and the trend is continuing. Losing these assets reduces a plan’s leverage and economies of scale, driving up fees for remaining participants. Depending on individual circumstances, remaining in a qualified plan could be beneficial for a retiree as well due to the many benefits provided by ERISA, creditor protection and generally lower fees than a retail structure such as an IRA.

2. Health Savings Accounts (HSAs)

With high-deductible health plans more the norm, companies can ease the pain by offering an integrated HSA solution. Contributions and withdrawals for medical reasons are tax-free. In addition, HSAs are now being valued for their post-retirement benefits and as another source of comprehensive retirement planning and funding. Unused balances carried into retirement can be used for any purpose penalty- free. However, in order to be both tax-free and penalty-free a distribution must be for qualified medical expenses.

3. Financial Wellness

While this may seem like an old trend, it’s continually taking on new meaning as plenty of research validates the links between financially healthy employees and productivity in the workplace. A 2017 study of 1,600 workers conducted by PricewaterhouseCoopers found that nearly half of employees who are worried about their financial health miss work occasionally and are less productive when they are at work.2 Unfortunately, financial education is not taught at any level, so topics such as learning how to budget may be a first step for some, while paying down debt may be the focus for others.

4. Targeting Non-Participating Employees

Look for plan sponsors to no longer be satisfied with traditional excuses such as “we have a low-paid work force” or “employees are saddled with student loan debt” as employers attempt to help knock down these barriers with creative solutions.

5. Offer Sustainable and Socially Screened Investments (SSI)/Environmental, Social and Corporate Governance (ESG) Screened Strategies

More attention to environmental and societal issues is on everyone’s mind, and younger generations such as millennials note that as a top priority. With millennials the dominant force in the workplace, the investment industry is gearing up for demand, and many money managers have or are developing solutions with this focus of sustainability in mind.

It’s Time to Take Action

Keeping benefits competitive is important for attracting and retaining employees. With these trends above, comprehensive retirement planning has solidified that it is a must for businesses.

Interested in learning more about how you can maximize benefits for your company? Reach out to our skilled team.

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5 Retirement Plan Trends for Your Business

Wipfli Financial Advisors, LLC (“Wipfli Financial”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Wipfli Financial is a proud affiliate of Wipfli LLP, a national accounting and consulting firm. Information pertaining to Wipfli Financial’s management, operations, services and fees is set forth in Wipfli Financial’s current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. Wipfli Financial does not provide tax, accounting or legal services. The views expressed by the author are the author’s alone and do not necessarily represent the views of Wipfli Financial or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Wipfli Financial, and Wipfli Financial does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Wipfli Financial of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.
Linda Coffey
Linda Coffey

Senior Retirement Plan Advisor

Linda Coffey is a Senior Retirement Plan Advisor with Wipfli Financial Advisors, based in the Chicagoland area. Linda specializes in providing investment advice, education and service to employer-sponsored retirement plans. She is passionate and committed to giving proactive, tailored guidance to help plan sponsors offer competitive, compliant retirement plans to their participants.

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5 Retirement Plan Trends for Your Business

time to read: 2 min