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
Updated to reflect IRS guidance issued in July 2016 on the modified determination letter program.
Updated to reflect the Department of Labor's final ERISA fiduciary rule.
The US Department of Labor has released its Final Fiduciary Rule under the Employee Retirement Income Security Act (ERISA). The Final Rule streamlines many of the more burdensome aspects of the proposed rule and stresses the importance of eliminating any potential conflicts of interests.
Updated to include 2016 foreign housing-cost exclusion limitation and base housing amount.
A federal court has denied an employer's motion to dismiss a proposed class action lawsuit, Marin v. Dave & Buster's, Inc. The lawsuit alleges that the employer violated the Employee Retirement Income Security Act (ERISA) by reducing workers' hours in anticipation of higher costs under the Affordable Care Act (ACA).
A downward trend in the size of settlements reversed last year, as plaintiffs figure out ways to work around a Supreme Court ruling that made it more difficult for plaintiffs to prove commonality to bring a class action.
President Barack Obama signed into law the Bipartisan Budget Act of 2015, which repeals the automatic enrollment requirement mandated by the Affordable Care Act (ACA), increases OSHA penalties and addresses employer premiums with respect to pensions.
The Quick Reference chart, Annual Retirement Plan COLAs and Fringe Benefit Limitations, has been updated with the 2016 Fringe Benefit Inflation Adjustments.