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
Employers seeking to advise employees of any retirement benefits offered to employees as part of their overall benefits package should consider including this model policy statement in their handbook.
The Supreme Court has issued a decision interpreting requirements regarding the administration of an employee stock ownership plan (ESOP) under the Employee Retirement Income Security Act of 1974 (ERISA). In Fifth Third Bancorp v. Dudenhoeffer, the Court eliminated the special presumption of prudence to which ESOP fiduciaries had been entitled.
A unanimous Supreme Court in Fifth Third Bancorp v. Dudenhoeffer has reversed the 6th Circuit Court of Appeals - with ramifications for employers that offer a defined-contribution retirement savings plan with investment options in an "employee stock ownership plan" (ESOP). In its decision, the Supreme Court resolves a split among the federal circuits by eliminating the special presumption of prudence to which ESOP fiduciaries had been entitled.
Despite receiving an unclear request, a benefits plan administrator was liable under ERISA for failing to timely provide requested plan documents. The 6th Circuit has adopted the "clear notice" standard, but ruled that the administrator knew or should have known which documents were requested.
Notice 2014-19, issued by the IRS, provides guidance on how qualified retirement plans should treat same-sex spouses. The notice also requires qualified retirement plans to recognize the same-sex spouse of a participant. and provides plan participants with important rights with respect to certain aspects of a qualified retirement plan.
In-depth review of the spectrum of employment law requirements HR must follow with respect to Retirement Benefits
In-depth review of the spectrum of employment law requirements HR must follow with respect to Compliance, Reporting and Disclosure Requirements
The IRS issued Notice 2014-19 and related Frequently Asked Questions providing guidance on how qualified retirement plans should treat same-sex spouses following the Supreme Court's decision in United States v. Windsor. Employers must take action to ensure that plan documents and operations conform to requirements.
In-depth review of the spectrum of Alabama employment law requirements HR must follow with respect to taxation of employee benefits.
In-depth review of the spectrum of Georgia employment law requirements HR must follow with respect to taxation of employee benefits.