Overview: The days of guaranteed employer-provided pension and health insurance are long gone. These days, employees are primarily responsible for ensuring they can retire comfortably. This is not always easy, since many employees start saving too little too late.
Even though the rules of the game have changed, employers can still serve as a valuable resource to employees when it comes to retirement planning. Employers can be proactive in their efforts to educate employees on the importance of saving for the future; encourage employees to contribute to a retirement plan; explain how investment strategies change based on factors such as age, the number of years left to retirement and individual goals; ensure employees fully understand their retirement plan's periodic benefit statements and other materials available to them including the plan's Summary Plan Description (SPD); and encourage employees to research retirement planning options on their own or with a financial planner.
Employees that receive education and support from their employer have a better understanding of what they need to do in order to prepare for retirement.
Trends: Employers continue to be creative in their efforts to educate employees on the importance of saving for retirement and retirement planning in general. More than likely, auto-enrollment and escalation features will become more prevalent as a means to help employees invest for their future.
Author: Tracy Morley, SPHR, Legal Editor
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Content has been added to help employers understand their rights and responsibilities when it comes to changing an employee benefit offering or contribution.
In-depth review of the spectrum of Alabama employment law requirements HR must follow with respect to taxation of employee benefits.
This Worked Example illustrates how employers should calculate an employee's total FICA withholding for each pay period.
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The IRS has issued the annual pension and fringe benefit plan cost-of-living adjustments (COLAs) for tax-year 2015. Employers must reprogram their computers and payroll systems with these amounts before the first payroll of 2015.