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 the 2019 FICA tax rates and benefit amounts.
President Trump has signed an Executive Order instructing the Department of Labor (DOL) and the Treasury Department to consider regulations to make it easier for small businesses to offer retirement savings plans.
In a private letter ruling, the IRS approved an employer's proposed program to add a student loan benefit to its 401(k) plan by making matching contributions for employees who make student loan repayments.
Updated to reflect information on the status of the fiduciary rule.
Updated to reflect post tax reform cost-of-living adjustments to the HSA dollar limits for tax years 2018 and 2019, and the foreign housing-cost limitation and the base housing amount for tax year 2018.
Updated to reflect the federal tax reform law's effect on family and medical leave benefits, effective January 1, 2018.
Updated to reflect an increase in the Social Security taxable wage base, effective January 1, 2018.
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.