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 an 18-month extension for full implementation of certain exemptions under the fiduciary rule.
Updated to reflect 2018 FICA tax rates and benefit amounts, including a reduction in the previously announced 2018 Social Security taxable wage base.
Updated to reflect 2018 inflation-adjusted amounts.
The Social Security Administration has issued inflation-adjusted figures for 2018, including the Social Security taxable wage base, the earnings tests for retirees who return to work, and the Social Security benefits quarter-of-coverage requirement and cost of living adjustment (COLA).
A joint resolution that nullifies a Department of Labor, Employee Benefits Security Administration rule advising states on auto-enrollment IRAs is headed to the President's desk.
Congress has voted to overturn the US Department of Labor rule regarding auto-enrollment IRAs. The joint resolution now heads to the President's desk for signature.
The US Department of Labor (DOL) has issued a temporary enforcement policy relating to its recently proposed 60-day extension of the applicability date of the final rule defining who is a "fiduciary" under ERISA.
Updated to reflect IRS final regulations defining 'spouse' for federal tax and benefits purposes.
In the interest of encouraging retirement savings to protect the economic security of older Americans, the Department of Labor's Employee Benefits Security Administration has issued a final rule guiding states on how to design payroll deduction savings initiatives with automatic employee enrollment (auto-IRAs) without being preempted by the Employee Retirement Income Security Act (ERISA). The final rule also provides guidance to the employers that eventually may be required to offer such programs to employees.