Wednesday, December 31, 2008

Tip of the Day: Pass along Fidelity's retirement resolutions

Fidelity has released new year’s retirement savings resolutions for people in three different age brackets— 25-35, 36-54 and those 55 and older, reports EBN sister title Money Management Executive.

As the New York Lottery slogan goes, “You have to be in it to win it,” and this, certainly, is the foremost message for young investors age 25-35: Enroll and contribute to your workplace savings plan. Underscoring how important this is, Fidelty found that only 47% of those polled are investing in their 401(k).

Second, Fidelity calls upon young people to develop a plan to reach their goals. Only 25% of those polled had done so.

Third, Fidelity calls upon people to open and contribute to an IRA (20% of responding workers have done this).

For those age 36 to 54, Fidelity advises monitoring and rebalancing portfolios at least once a year. (Only 25% have done so.) Following this, it’s wise to catch up and/or max out on retirement savings vehicles, particularly as income rises, but only 19% are doing so, the firm reports. In 2009, workers age 50 and older will be able to contribute an additional $5,500 a year to their 401(k) and an additional $1,000 to their IRA.

Third for middle-aged people, Fidelity suggests simplifying and consolidating rollover assets into one IRA, although only 11% of respondents have done this.

Lastly, for those people age 55 and over who are nearing retirement, Fidelity’s first guideline is to plan to wait until at least age 62 to begin taking out Social Security payments and Medicare. This age group also needs to focus on creating a retirement income plan (only 26% have done this) and researching long-term care insurance needs (a mere 15% have).

“Creating an income plan that manages risks, such as longevity, market volatility and rising healthcare costs, is critical, as the median retirement savings of an American household is $22,500 and is on track to replace only 58% of pre-retirement income,” Fidelity said.

“The New Year offers investors an opportunity to take better control of their finances and stay on track throughout 2009,” suggested Fidelity Executive Vice President Carolyn Clancy. “These resolutions offer investors very specific steps to consider that can provide more financial discipline and better prepare them for retirement.”

News You Can Use: Specialty drugs driving Rx cost increases

A report from Haldy McIntosh and Associates for Medco finds 60% of plan sponsors believe that specialty medications are the leading driver of spending growth. This is a sharp increase over last year's survey, where only 25% of respondents shared this view.

To help curb rising costs, plan sponsors are considering programs like pharmacogenomics (personalized medicine, in plain English). Such programs include genetic testing to find how an individual will metabolize a drug to ensure it is prescribed in the right dose.

Other cost-cutting strategies are more conentional, with 65% of organizations offering a wellness management program, 70% a disease management program 46% planning to increase cost sharing over the next 18 months.

Click here to read EBN coverage of how one employer brought specialty pharmacy costs under control.

Tuesday, December 30, 2008

Tip of the Day: Make 'SMART' new year's resolutions

People typically have well-meaning aspirations when it comes to setting their New Year’s resolutions. Actually sticking to those resolutions is of course more difficult. The personal health coaches at Gordian Health Solutions are sharing their tips for keeping 10 common new year’s resolutions. According to Gordian, it is important to make “SMART” resolutions (Specific, Measurable, Achievable, Rewarding, Timely).

Their list for making 10 SMART-er resolutions:

1. “Start working out." Make the action steps more specific, like, “I will walk on the treadmill for 30 minutes, three to four times a week” or “I will wear a pedometer to work.”

2. “Lose weight” or “Lose 30 pounds.” Make your goal more achievable and timely, like “I will lose 5 pounds by the end of the month.” Then come up with action steps involving nutritional changes, exercise, etc.

3. “Eat better.” Change your thinking from, “I’m going on a diet,” to “I’m making lifestyle changes to improve my eating habits.” Consider keeping a food journal to find specific areas you can change. Specific action steps could be limiting sweets and fast food and eating more fruits and vegetables.

4. “Quit smoking.” Set a realistic quit date. Make sure you're not setting yourself up to fail by trying to quit during a stressful time. Talk to your doctor and consider using nicotine replacement therapy such as nicotine patches, gum or medications. Clear your home of all smoking-related paraphernalia (cigarettes, lighters, ashtrays). Set action steps to reduce tobacco intake slowly, like “I will cut back by one cigarette per day over the next week.” Also think about a plan to deal with cravings and challenging situations.

5. “Reduce stress.” Identify and write down your stressors. Identify positive steps you can take when feeling stressed and what sources of support you have. A realistic action step might be something like, “During times of stress, I will practice deep breathing techniques, write in a journal or go for a walk to clear my head.”

6. “Give up fast food.” It is not always possible for some people to give up all fast food, so begin by familiarizing yourself with the healthier options on fast food menus. Try using restaurants’ websites to look up nutrition information, or pick up nutrition pamphlets inside restaurants.

7. “Stop drinking soda.” It may not be realistic to cut out all soda at once. Think about ways to decrease the amount of soda you are drinking. For example, try mixing diet soda into regular to cut the calories, or try substitutions like flavored water, unsweetened tea or green tea.

8. “Drink more water." Set realistic, specific steps like, “I will get a water bottle to carry with me” or “I will replace high-calorie beverages with water or flavored water.”

9. “Get more sleep.” Set a specific bedtime, and stick to a consistent schedule to get your body adjusted. Families with children can especially benefit from having a consistent routine for getting to bed at the same time each night.

10. “Cut back on alcohol.” Quantify how much alcohol you are drinking now. Decide what might be a realistic amount to cut back to. For example, if you typically drink six or eight beers, limiting yourself to two beers might be your goal. If needed, devise a step-by-step plan with action steps like, “I will remove alcohol from my home” or “I will avoid situations where alcohol will be served.” Identify supportive people or join a support group.

News You Can Use: Recession to affect workers more deeply

The ongoing recession already has affected employees, as the number of employers implementing layoffs and hiring and salary freezes has risen sharply in the last two months, according to a new survey from Watson Wyatt, and the cuts likely will continue into next year, the consulting firm finds.

Watson Wyatt reports that 23% of employers plan to make layoffs in the next 12 months, and an additional 18% are planning a hiring freeze over the same period.

“As the economic downturn has both broadened and deepened, companies in almost every industry can no longer stay the course,” says Laura Sejen, global director of strategic rewards consulting at Watson Wyatt. “The need to contain costs has resulted in stronger measures that are ultimately affecting more workers.”

Among the other cost-cutting measures employers have planned over the next 12 months to survive the recession:
* Organization-wide restructuring 21%
* Eliminate/reduce training 18%
* Raise employee contribution to health care premiums 17%
* HR function restructuring 21%
* Salary freeze 19%
* Reduce/eliminate other employee programs 12%
* Salary reductions 6%
* Reduce employer 401(k)/403(b) match 7%

Findings show that almost two-thirds of companies have already taken five or more of the actions above.

“All indications are that 2009 will be a difficult year for both companies and ultimately employees,” said Sejen. “It will be up to employers to find an effective way to manage this challenge by balancing their financial situations with the likely impact on employee engagement.”

Monday, December 29, 2008

Tip of the Day: Get those SSNs to CMS

Effective Jan. 1, employers will be required to submit to the Centers for Medicare and Medicaid Services Social Security numbers for covered workers and dependents to comply with a new federal mandate. You've been hearing about this for months, but if you're like us, there's no time like the last minute! Your health insurance carrier likely has already buzzed you about collecting the information.

Among the 411 you'll need to provide:
Tax ID number
Total number of full-time and part-time employees (even those not enrolled in your health plan)
Social Security Number (SSN) for employees and dependents enrolling in new plans as of Jan. 1, and for all plan members by Jan. 1, 2010

Got questions? Click here for a document that should help. If it doesn't, there's still stime to contact CMS. Click here to submit a question.

News You Can Use: Employers make revamping reitree medical a resolution for 2009

A new survey from ISCEBS and Towers Perrin indicates that employers are considering bold changes in 2009 to rein in retiree medical costs.

With more than 70% of respondents still offering retiree medical benefits to current retirees and some active workers, cost increases -- compounded by the current recession -- are a significant force influencing change in their programs to offload trend risk and begin to distance themselves from plan sponsorship and administration.

For pre-65 retirees, employers continue to wrestle with difficult challenges given the lack of access to affordable individual insurance for this high-cost population. The absence of affordable company-sponsored pre-65 coverage means that many older employees will delay retirement, presenting another significant workforce issue for employers. Although about two-thirds of respondents subsidze between 40% and 80% of plan costs, employers increasing are capping their benefits, with 48% of employers reportung such a cost cap, up from 43% last year.

While only 7% of employers have ceased financial support for pre-65 coverage in the past two years, 42% have either changed or plan to change cost-sharing between company and retiree. As part of this shift, a 34% of employers have introduced, or plan to introduce, HSAs to retirees as a means to promote tax free retiree medical savings.

For post-65 retirees, financial pressures on employers and retirees are similar to those for pre-65 retirees. Many employers (60%) who have capped their subsidy report plan costs in excess of the cap. Almost 40% have or will recast cost-sharing terms with post-65 retirees, and almost 20% have ceased – or plan to cease – providing any post-65 financial support at all.

Click here for extended coverage in the Sept. 1 and November issues of EBN about employers' strategies for retiree medical benefits.

Monday, December 22, 2008

Programming note: Daily Diversion takes holiday hiatus

The Daily Diversion will take a much-needed holiday break Dec. 22-Dec. 26. New posts will resume Monday, Dec. 29. The EBN/DD staff wishes all readers a safe and happy holiday season.

Friday, December 19, 2008

Wish You Were Here: Make your company stand out to new grads

Research from TMP Worldwide has tapped into what new grads want from a job. Despite the recession and a corporate environment where layoffs abound, "just lucky to have a job" is not an attitude young workers appear willing to take. On new grads' list of "never, ever will I ever" job points, according to the survey:

71% won’t compromise on training.
52% won’t accept a job with poor work-life balance.
31% refuse to accept a lower starting salary.
33% would not relocate for a job.

To help your company, benefits package and employee communications attract and retain young workers, see extended coverage in EBN:
- Leveraging Blackberries and buzzwords
- "Five Minutes With ..." podcast with Tim Vigue on Gen Y retention
- EBN Web exclusive: What sets your Gen X and Y employees a-Twitter?
- Young even more restless than imagined

Tip of the Day: Do due diligence on outsourcing locations

New research from Black Book Research and Brown-Wilson Group ranked the safest and most dangerous offshore locations, Workforce Management reports. Employers with international operations and looking to outsource jobs or entire business units will want to do their homework to make sure the location they select is safe for their employees and makes the best business sense.

According to the survey, the most dangerous outsourcing locations are Jerusalem, Israel; Mumbai, India; Rio de Janeiro/Sao Paulo, Brazil; Manila/Cebu/Makati, Philippines; and Delhi/Noida/Gurgaon, India. Singapore; Dublin, Ireland; Santiago, Chile; Krakow/Warsaw, Poland; and Toronto were ranked the safest.

News You Can Use: Obama taps Solis to lead DOL

Rep. Hilda Solis, (D-Calif.), is President-elect in Barack Obama’s pick for Secretary of Labor, he will announce in a news conference today.

"We're thrilled at the prospect of having Representative Hilda Solis as our nation's next labor secretary," John J. Sweeney, president of the AFL-CIO, told the New York Times. "We're confident that she will return to the Labor Department one of its core missions: to defend workers' basic rights in our nation's workplaces. She's proven to be a passionate leader and advocate for all working families."

If approved by Congress, Solis will oversee an agency responsible for regulating nearly 700,000 retirement plans and 2.5 million health plans. However, some in the business community fear that her support for the Employee Free Choice Act and her position on free trade will further impede businesses to compete in a global economy.

Randel K. Johnson, vice-president of labor policy at the U.S. Chamber of Commerce, told the New York Times he is disappointed having "expected Obama to pick someone supported by the A.F.L.-C.I.O. She's not a pick whose philosophy we didn't expect. We will disagree with her on some issues and work with her on some."

News You Can Use: Employers put skilled talent on holiday wish lists

In a recent Watson Wyatt Workforce Planning Survey, almost two thirds (71%) of employers cite scarcity of talent as the biggest challenge impeding their business strategy. Other major concerns include restructuring (42%) and layoffs or hiring freezes (20%).

For employers who are most worried about bringing in new talent, 50% plan to continue replacing talent in all positions, while 33% will scale-back talent replacement across the organization and 21% will hire replacements only for critical jobs. Three percent of employers will not be replacing talent in the near future.

On the other side of the spectrum, attracting talent is equally difficult as 77% of employers report challenges in enticing critical-skill employees and 60% named top performers as a hard commodity to obtain. In terms of retaining their employees, less than half (49%) were having trouble keeping critical-skill employees within the company and 34% had the same problem retaining top performers.

Watson Wyatt’s Workforce Planning Survey was conducted in October 2008 and compiles responses from 129 North America-based employers across a variety of industries.
--Kathleen Koster

Thursday, December 18, 2008

Overheard @: SHRM's Schramm forecasts 2009 trends

Jennifer Schramm, manager of workplace trends and forecasting at the Society for Human Resource Management, offers insights into the top workplace trends, based on SHRM’s survey data. For more complete survey results, read "Seeing around the curve," in this month's EBN.

Tip of the Day: Measure your disease management provider satisfaction

A new survey tool from DMAA allows employers, health plans, disease management companies and other stakeholders to better understand providers' experiences with and attitudes toward population health improvement programs. The organization developed the tool because the "success of disease management, wellness and other population-based interventions can depend on the satisfaction of providers, who play an important role by referring patients and managing and coordinating patient care."

A recent DMAA survey shows that physician engagement was ranked among the three strongest determinants of program success."The better we understand provider attitudes toward population health management, the better able we are to make program changes that enhance that relationship and improve patient care," says DMAA President and CEO Tracey Moorhead. "Health care purchasers value patient and provider satisfaction. Our survey provides a simple, validated tool to measure that."

The tool is available for free at DMAA's Web site. Click here to download it.

News You Can Use: U.S. offers lowest severance worldwide

As the number of layoffs nationwide mounts higher, it seems employees who are terminated aren't walking away with much. According to survey by Right Management, U.S. employers offer the lowest amount of severance regardless of seniority and/or tenure.

Studying 28 countries, Right Management finds even top execs leave with as little as 2.76 weeks of severance per year of service, compared to an average 3.39 weeks per year of service for other countries.

Wednesday, December 17, 2008

Overheard @: Don't be socially awkward

Get LinkedIn on how from Facebook to Sharepoint, social networking has employees all a-Twitter. Learn how to leverage such sites to enhance your benefits communications in a "Five Minutes With ..." podcast with Watson Wyatt's Michael Rudnick.

Also, see the article in this month's EBN.

Tip of the Day: Get a handle on preventing corporate theft

Apparently driven to desperation by the recession, more employees are stealing from the company cookie-jar, according to a recent study by the Institute for Corporate Productivity (i4cp), which found that 15% of employers have noted an increase in office crime spurred by the economic crisis.

In recent months, nearly a quarter (24%) of all company employers and one-third (31%) of officials from large companies saw an increase of theft of office supplies, company products, electronic equipment, food and other company-owned items. Most serious is the 18% of employers overall and 22% of large businesses that have noted an increase in employee-related monetary theft -- such as padding expense reports or disappearing cash.

Employers hope to offset internal criminal activity with employee communication, a strategy utilized by 28% of all study participants and by 38% of large business representatives. Twenty percent are conducting additional audits (25% in large companies), and 19% of companies overall are paying more attention to background checks for prospective new hires.
-- EBN Associate Editor Kathleen Koster

News You Can Use: Employers move away from company stock

In a new research paper, the Bureau of Labor Statistics finds the amount of 401(k) assets employee-investors have in company stock is dwindling and has been steadily for the past two decades.

According to BLS, the "steady increase in the percent of participants who have investment choices for both employee and employer funds, and the steady decrease in the percent who may choose employer stock as one of those options, reflect both changes in law and regulation, concerns based on high-profile plans, and an increase in investment education among employers and employees."

Tuesday, December 16, 2008

Overheard @: The lowdown on the mental health parity law

Kelly Traw, a principal at Mercer, discusses how employers will have to redesign their health benefits to reflect the new Mental Health Parity and Addiction Equity Act.

For more, see an article about the law in the December EBN.

News You Can Use: Merrymaking seems recession-proof

Most companies haven’t lost their holiday spirit in the wake of a difficult financial year. About 71% of employers will continue their plans for a holiday party for employees this year, according to a Hewitt survey of more than 160 employers.

Among the 42% of companies offering holiday bonuses this year, 52% will provide them in cash, spending an average of $863 per employee. Forty-two percent will give gift cards or gift certificates averaging $76 per person, and 16% will give food, Hewitt reports.

Tip of the Day

Add this number to your speedial: 888-657-0440.

That's the toll-free retirement plan helpline recently launched by Bukaty Companies Retirement Plan Services to help plan sponsors understand their fiduciary responsibilities in light of the recession.

"Anyone who has responsibility for managing a qualified retirement plan should be seeking professional advice. The uninformed are at real risk if they are not carefully managing fiduciary obligations," said division Vice President Vince Morris.

Sponsors can call Monday through Friday from 8:00 a.m. to 5:00 p.m., CST, or e-mail questions to

Programming note: SPARK to host 403(b) webcast

The SPARK Institute has scheduled a webcast, “403(b) Information Sharing: Common Remitter Issues,” for Friday, Dec. 19 at 12 p.m. EST. The event will include a presentation and Q&A session with experts who developed the common remitter aspects of the organization's 403(b) Plans Information Sharing Best Practices to help plan sponsors comply with IRS regulations that are effective on January 1, 2009 .

The panel will review the best practices for remitting census data and will answer questions regarding the roles and responsibilities of employers, employer representatives and vendors. The Best Practices were developed 2009.

Speakers include Paul Jackson, Vice President-Institutional Services at AIG Retirement, James Racine, Assistant Vice President, Lincoln Financial Group and Ralph Sanna, Director-Strategic Initiatives for TIAA-CREF. For further details, visit or call 860-658-5058.

News You Can Use: Retirement plan sponsors consider new strategies

In response to the recession, employers are considering changes to their retirement plan strategies, according to a new Mercer survey, "Leading Through Unprecedented Times."

Among the possible shifts, 17% of retirement plan sponsors are considering doing suspending their 401(k) match, 77% plan to review investment and administrative fees, 85% will likely enhance employee education and communication and 75% will revisit fund lineups.

On the defined benefit side, 46% of respondents plan to change investment strategies to reduce risk, although 31% expect to change their funding policies and 24% may reduce or halt accruals.

Monday, December 15, 2008

Overheard @: An insider's take on making Working Mother's Best Companies list

Listen in as Stacey D. Stewart, chief diversity officer and senior officer of community and charitable giving at Fannie Mae, talks about her company's recent recognition as one of Working Mother's 2008 best companies for working moms.

Tip of the Day

Keep up pushing employees toward generics.

The effort is paying off. New study results from IMS Health show total spending on generic medications decreased by 2.7% to $33 billion, the largest decline in a decade. The average price that drug makers charged for generics decreased 8%, and consumer demand for generics increased 5.4%. Even better news, IMS Health predicts the trends will increase through 2012.

News You Can Use (but don't want to hear): Pensions at largest companies post record losses

This past Thanksgiving, it seems DB plan sponsors were just thankful to get through November. New analysis from Mercer shows that pension plans sponsored by the largest U.S. companies suffered their second consecutive month of record losses, with their funded status falling by more than $130 billion in November.

This adds to losses of $110 billion in October and $100 billion in the first three quarters of 2008, turning a surplus of $60 billion at the end of 2007 into a deficit of $280 billion at the end of November.

The study covered plans sponsored by companies in the S&P 1500, and showed the aggregate funded status fell from 104% at the end of 2007 to 97% at the end of September, and dropped further to 80% at the end of November. Mercer’s analysis also shows that without a significant increase in high-quality corporate bond yields -- used by most companies to measure the value of plan liabilities -- the losses would have been worse.

Friday, December 12, 2008

News You Can't Use (but wish you could): Alberta to ring in new year with no health premiums

On Jan. 1, Alberta, Canada will eliminate its annual premiums for individuals and families for all of 2009. Employers who have paid their employees’ premiums can reinvest the savings in other employee benefits or compensation programs, or they can choose to hold on to the savings. The move is being taken because the province is in such good financial shape and is sharing the wealth with employers.

Tip of the Day

Manage your information security risks.

In addition to just being good business practice, securing employment information could be even more important in the current economic environment. A recent survey by Cyber-Ark Software finds that more than half of U.S. respondents (58%) confessed to stealing corporate data and would use the information as leverage to land a new job if they were laid off.

And although customer data was highest on the list of the juiciest info to steal (52%), HR information also ranked highly (28%).

To help HR/benefit pros safeguard company data, IRHIM offers a course on managing information security risks.

News You Can Use: Stressed employees flocking to EAPs

Survey results from the Employee Assistance Society of North America show an 88.2% increase in calls to EAPs for financial services. In addition, requests for help coping with stress were up 82.4%, and calls for legal services were up 41.2%.

Such results don't really surprise us much here at EBN, as financial and emotional worries often go hand in hand. However, what does seem troublesome is that we haven't seen similar surveys that show calls to retirement advice lines have been burning up as well. Are employers not offering retirement/fincancial planning services in as large numbers as they do EAPs? Are EAPs better communicated? Do employees feel more comfortable talking about their finances in the abstract rather than facing hard numbers?

Comment and share your thoughts.

Thursday, December 11, 2008

News You Can Use: Fidelity, AmEx unveil rewards card way better than frequent flier miles

Fidelity and American Express have teamed up to create a rewards credit card that allows customers to transfer purchase rewards to their IRAs, reports EBN sister publication Money Management Executive. The card allows investors to earn two cents for each dollar spent on retail purchases and roll these rewards into a Fidelity IRA account after they spend at least $2,500.

If investors max out their IRA contribution for the year, they can redeem their rewards in a different Fidelity account or redeem them for travel, merchandise or other rewards.

Tip of the Day

Keep an eye on your retirement plan fees.

"It’s easy these days to forget about fees when your fund might have lost 40% or more in the past year,” writes the Baltimore Sun. “But fees matter over the long run, and you can end up with a lot less money, even if you’re paying what seems to be only slightly more for a fund.”

As higher fund fees can siphon even more money from employee-investors who have seen their assets battered by the downturned economy and stock market, such fee increases are something for plan sponsors to watch.

Lipper senior analyst Jeff Tjornehoj told EBN sister publication Money Management Executive that fund fees could rise 10% next year. Added to that, he warned, service providers are likely to increase their fees as well.

News You Can Use: House approves bill to change 401(k) distribution rules

The House last night passed legislation that would temporarily suspend the tax on seniors who fail to take a required minimum distribution from their retirement accounts at age 70 1/2. Under the bill, seniors would not have to tap retirement assets during 2009.

Under current law, seniors must annually withdraw a minimum amount from their retirement accounts, based on their life expectancy and retirement balance from the previous year. Not taking the distribution subjects seniors to a tax penalties.

Among the bill's other provisions are relief for cash-strapped employers who need to make high contributions to pension plans to meet Pension Protection Act requirements, which state that plans must be 92% funded for 2008 and 94% for 2009. Failing to meet that funding mark would force plan sponsors to fully fund plans immediately. The House bill would only force companies to meet the 92% funding level.

Wednesday, December 10, 2008

News You Can Use: Supremes to hear case on crediting pregnacy leave for calculating pension

Today the Supreme Court will hear oral arguments in AT&T v. Hulteen, a case that will address how employers should factor maternity leave into calculating years of service for pension benefits.

The women bringing the suit are retired AT&T employees who took pregnancy-related leave prior to the passage of the Pregnancy Discrimination Act in 1979. Before the law became effective, AT&T limited the amount of pregnancy leave that could be credited as years of service, but did not limit other types of disability leave. As a result, the women received smaller pensions than if they'd been given full credit for pregnancy leave.

The case will address whether the benefits limit is a violation of the Pregnancy Discrimination Act.

Tuesday, December 9, 2008

Tip of the Day

Know the 5500 requirements for Schedule C.

Rather than have us try to explain them all is this space, click here for an alert from ERISA Diagnostics that breaks it all down for you.

News You Can Use: Patients poo-poo quality rankings

When it comes to selecting a doctor or hospital, patients would rather consult friends and family rather than online quality rankings, research finds. According to the Kaiser Family Foundation, less than 15% of Americans rely on quality data to make decisions about health care services.

"Virtually no patients look at them," Dr. Bryan Liang , executive director of the Institute of Health Law Studies at California Western School of Law in San Diego, told The Press-Enterprise. "The basic problem of these kinds of ranking systems is that patients do not choose on the basis of scores. They choose on the basis of personal familiarity and experience with the health care entity or provider."

Monday, December 8, 2008

News You Can Use: 401(k) balances, savings rates drop

A Hewitt Associates analysis of 2.7 million U.S. employees reveals that the average 401(k) plan balance has dropped 14% in 2008 to $68,000, down from $79,000 in 2007. In the past two months alone, employees, on average, have lost nearly 18% of their 401(k) plan savings, and some have lost more than 30%.

In addition, savings rates have dropped marginally, from 8% in 2007 to 7.8% in 2008, while 4% of employees have stopped 401(k) plan contributions altogether.

Tip of the Day

Revisit employee medical confidentiality requirements.

With changes to the ADA and FMLA, and the persistent unknowns of HIPAA, experts at Ogletree Deakins advise employers to brush up on the laws and their provisions for employers regarding maintaining workers' medical privacy. Click here for the firm's advisory.

News You Can Use: AHIP offers tit-for-tat reform proposal

America's Health Insurance Plans (AHIP) last week offered its own health care reform proposal on behalf of the nation's insurers. Although the plan would require a mandate for all Americans to purchase health insurance -- an idea rejected by President-elect Obama -- the industry cedes ground by stating the plan would prohibit insurers to reject individuals based on health status.

Read the full proposal here, then voice your opinions to Obama's health care team.

Friday, December 5, 2008

News You Can't Use: EBRI turns 30

The Employee Benefit Research Institute is all too modest. Not wanting to toot their own horn, we'll do it for them! This week, EBRI, dedicated to the development of sound employee benefit programs and public policy through nonpartisan research and education, celebrated its 30th anniversary.

Although you'll find only a brief mention of it on the group's Web site, EBRI celebrated in style with a Washington, D.C. reception and tribute program that featured the likes of Rep. George Miller (D-Calif.), who called the group "one of the most valuable resources we have to help us understand what is happening" in employee benefits. Sen. Charles Grassley (R-Iowa) said EBRI has "won respect among members on both sides of the aisle."

EBN congratulates EBRI and its president and CEO Dallas Salisbury on this milestone and wishes the organization continued success in the future.

News You Can Use: U.S. health rankings score bragging rights for small states

Congratulations, Vermont, Hawaii and New Hampshire – you’re the top three healthiest states in the nation this year. Sorry, Louisiana, Mississippi and South Carolina – you’re the bottom three states, according to “America’s Health Rankings,” a report from the United Health Foundation.

Curious about where your state falls in the rankings? Find the full list here. The rankings weigh a number of health metrics, such as the infant mortality rate, prevalence of obesity, smoking rate, access to prenatal care, proportion of uninsured residents and prevalence of binge drinking.

Tip of the Day

Consider giving a holiday bonus ... or a ham.

Survey results from HON show 75% of employers provide some sort of holiday incentive, with 54% offering a cash bonus (the most popular), 22% a gift certificate, and 5% a holiday ham.

News You Can Use: 10 benefits on the chopping block

According to U.S. News, employers are making a list and checking it twice -- and not in a good way. This recent article outlines 10 places employers will look to cut costs next year, among them 401(k) matches, employee training and merit increases. Which ones are on your list? Comment and let us know.

News You Can Use: Send Obama your health care suggestions

The website of the President-Elect Barack Obama features a community discussion board to pick the public’s brain on Health Care solutions. Since the discussion went live on Tuesday over 3,500 individuals have commented.

Care to share? Click here to join the conversation.

Thursday, December 4, 2008

News You Can Use: Report details discriminatory, unsanitary practices by CVS

The CVS Caremark Corporation is under fire today about the results of an investigation into practices regarding access to its stores and services, quality control and consumer privacy and safety issues at CVS stores.

The study, conducted by consumer advocacy group Cure CVS over a 14-month period, finds that in the metro New York City area, CVS operates four times as many stores per person in the where the median annual household income is over $80,000, as in the least, where the median annual income is under $40,000. There are twice as many CVS stores per person in the wealthiest areas of Greater Los Angeles as there are in the least wealthy. By contrast, Walgreens and Rite Aid have more stores per person in less affluent areas across the country, the group concludes.

The report also finds that CVS is more likely to place 24-hour stores and in-store medical clinics in majority-white neighborhoods and higher-income communities. The chain also has been taken to task for unsanitary practices. In June , the Attorneys General of New York and California demanded that CVS stop offering expired infant formula and over-the-counter medications.

CVS is the nation’s largest drug store chain, operating 6,800 stores nationwide. CVS Caremark Corporation is the nation’s largest source of prescription drugs.

Tip of the Day

Avoid legal liability during the holiday season.

Even employers with the best of inclusive intentions can get into hot water if holiday celebrations do not follow the letter of the law. Advice from Snell and Wilmer LLP covers religious observances, parties and bonuses.

News You Can Use: Nearly one third of employees may not own a home computer

Nearly all (94.5%) of human resource professionals say that it is important for employees to own a home computer, but as many as one-fourth of professionals say that over 30% of employees don't own computers at home.

"The survey echoes what we have seen as a growing trend -- access to home computers has expanded in recent years, but disparities still exist for those employees trying to acquire these essential, life-enhancing products during these unforgiving economic times," said Elizabeth Halkos, vice president of sales and marketing for Purchasing Power, the Atlanta-based company that conducted the survey.

Having access to benefit information online is the most important reason for employees to have home computers, according to 81.5 % of respondents. Also ranking high (both at 50.6 %) as an important use for a home computer was improving skills of the employee through online education and accessing wellness programs and other health information.

When asked if they have any solutions available for employees without home computers, 57.7 % of respondents said they did not. Of the 42% of respondents who do, 28.5% said they have computer kiosks in the workplace for use on breaks and 27% have loaner laptops for take-home use. Only 16.6 % reported they are offering computer purchase as a voluntary benefit, however.

The random sample survey was conducted during the 21st Annual Benefits Forum & Expo and the Society for Human Resource Management's (SHRM) 60th Annual Conference.

Scone: First, do no harm

A recent study published in the December issue of the journal Pediatrics finds that about half of some 800 pediatricians and family docs surveyed delayed purchasing childhood vaccines because of high vaccine costs compared to low reimbursement rates, and another poll finds that 11% of doctors (just 5% of pediatricians) have seriously considered not providing vaccines at all.

The news is meaningful to employers because as health care costs continue to rise and Americans forego health care for themselves and children for financial reasons, a smaller number of doctors providing vaccines could lead to larger outbreaks of certain diseases -- equaling higher health plan costs and employee absences to care for sick children or themselves.

As employers put a larger focus on primary and preventive care in their wellness efforts, cooperation from physicians, including pediatricians who care for employees' children, is essential.

Here's hoping this is a blip for pediatricians, brought on by the economic pressures we're all facing. Anything more than that, and employers, employees and their families could be physically and financially harmed.

Wednesday, December 3, 2008

Tip of the Day

Revisit the tax treatment of gifts to employees.

'Tis the season, and in this economy, any small token of employers' appreciation will mean a great deal to workers. However, it's important to remember that holiday gifts are treated as supplemental wages, and therefore subject to income taxes. Brush up on this and other tax rules for holiday gifting.

News You Can Use: Benefits accounted for nearly one-fifth of total compensation in 2007

Benefits account for nearly 20% of total compensation spending, states data from the nonpartisan Employee Benefit Research Institutes's 2007 study, published last week in the November issue of EBRI Notes.

Employers spent nearly $8 trillion at year-end 2007, up nearly 35% from the year 2000.

Wages and salaries accounted for the largest share, $6.4 trillion (or 81.4%), while benefits made up the remainder, $1.5 trillion (18.6%).

The largest portion of benefit spending remains in the retirement arena, at 47.7% of total benefits expenditure. Health costs, however, have risen to a close second at 42.8%. "Other benefits," which includes unemployment insurance, life insurance and workers compensation, rounded out the total at just under ten percent.

Tuesday, December 2, 2008

News You Can Use: Avoiding holiday party disasters

While the economy may have curtailed holiday merriment to an extent, many offices are still planning smaller get-togethers as celebrations. Unfortunately, without proper planning, these shindigs can turn into potential HR nightmares as "off the clock" employees exhibit behaviors that are less-than-work appropriate.

This week, we'll bring you a podcast from Kathleen Koster, EBN's newest staffer, on how to stage party planning to ensure maximum fun with minimal issues, but in the meantime, we'll be exploring what may be seen as the darker side of an office get-together.

Like the 12 steps to a holiday party seen in this video, colleague's desires to "get loose" may sometimes show less-than-becoming behaviors.

"When alcohol prompts bad behavior at holiday celebrations, that can indicate something more serious is lurking," said Dr. Harris Stratyner, Ph.D., Regional Vice President of Caron Treatment Centers. "From an unstable economy to technology that bombards us with information, the state of the world today only increases vulnerability to holiday alcohol abuse and longer-term problems."

Nearly 70% of U.S. adults participating in at least one holiday party, states new data from Caron, and 64% report having seen inappropriate behavior by persons under the influence of alcohol.
Other survey findings:

58% observed a coworker drive drunk.
49% spotted a coworker flirting with another coworker or supervisor.
47% heard a coworker using excessive profanity.
44% heard a coworker share inappropriate personal details about themselves or other colleagues.

However, when asked for the acceptable number of alcoholic beverages for a person to consume at a workplace holiday party, one third (34%) of the respondents felt that it was acceptable to consume three or more drinks at a work party.

"Social drinking is so interwoven into the fabric of American society that many people fail to recognize it may be the sign of a chronic illness," said Dr. Stratyner. "During the holidays, people are particularly vulnerable to drinking in excess and others are willing to look the other way to keep the atmosphere festive."

However, Stratyner urges coworkers to instead find impaired coworkers transportation home. Such action "is a kind and possibly life-saving gesture," she says. "However, sending someone home in a cab does not change their behavior and is simply not enough. It's important to assess if there is a behavioral issue that needs to be addressed."

Overheard At/Tip of the Day: Eight great tips to save for retirement

Dean Kohmann, vice president of 401(k)s for Charles Schwab, chatted with us last week to share details about a new survey about retirement habits. He offered eight tips to help employees get on track with their savings regimen. Tune in to the podcast, and find the tips written below in this exclusive "print for your employees" section.

1. Contribute to your company’s retirement plan up to the maximum employer match.

Even if money is tight, Schwab recommends that people contribute at least enough to their 401(k) or similar plan in order to get the full company match. “You are getting paid to save,” asserts Catherine Miller, vice president of investor development for Schwab. “Don’t leave money on the table.” Most 401(k) contributions are deducted from pre-tax income, so people keep more of their earnings each paycheck and savings grow tax-deferred until retirement.

2. Pay off nondeductible, high-interest-rate debt like credit cards.

Eliminating debt will make it much easier to reach your savings goals. To maximize savings, create a budget and look for ways to cut back on non-essential expenses. Use that extra money to make more than the minimum monthly payment on high interest credit cards or loans. You can also try negotiating with credit card companies for a lower interest rate.

3. Create an emergency fund to cover at least three months of essential living expenses.

Without an emergency fund, Americans are at risk of dipping into retirement savings or taking on more debt if they need quick access to cash. You should save enough to cover at least three months of essential living expenses like rent or mortgage, utilities, food and transportation. Keep your emergency fund in an account that’s easy to access like a checking or savings account.

4. Contribute the maximum allowed to tax-advantaged retirement accounts.

Now more than ever, you are responsible for ensuring your own financial security during retirement. The more money you set aside early, the more comfortable your retirement may be. Try to contribute up to the IRS maximum in your 401(k) plan at work (the new maximum will be $16,500 in 2009) and also contribute to a traditional or Roth Individual Retirement Account (IRA), if available to help supplement these savings.

5. Save for a child’s education.

As a general rule, Schwab recommends saving for retirement before your children’s college education. “Your child may be able to get a loan for college, but you can’t get one for retirement,” added Miller. A 529 college savings plan or a Coverdell Education Savings Account can help you take advantage of tax-deferred growth on your investment.

6. Save for the down payment on a home.

Start by estimating how much house you can afford. Typically, your mortgage payment, including principal, interest, taxes and insurance should not be more than 28 percent of your gross income. Make sure you keep your risk tolerance and timing needs in mind when deciding how to save for your down payment. Avoid using tax-deferred retirement accounts to fund this purchase.

7. Pay down tax-deductible, high-interest-rate debt like mortgages.

Reducing high-interest-rate debt from a tax-deductible mortgage, home equity or student loan can significantly enhance your ability to save in other areas over time. After taking care of other savings priorities, Schwab recommends you consider refinancing this kind of debt if interest rates have dropped. You may lower monthly payments in the near term and help save money over time, but make sure to factor in any transaction or closing costs before making a decision.

8. Keep investing.

If you’ve accomplished your other savings priorities, investing for the long term may be a good way to stay ahead of inflation and earn more than traditional savings accounts pay. Start by creating a realistic investing plan and put it into action to begin earning right away. Stay diversified with an asset allocation that matches your risk tolerance and keep long-term goals in mind to stay on track.

News You Can Use: Nearly one-third of workers do holiday shopping online at work

Nearly one-third (29%) of workers do holiday shopping online during work hours, states new data from In addition, only half of employers will monitor Internet use of employees, potentially setting the stage for even more lost productivity in an already-crunched Q4.

"While employers are unlikely to terminate workers for online holiday shopping during the workday, employees should proactively police their personal Internet usage," said Rosemary Haefner, Vice President of Human Resources for "In addition, employees need to be aware of company Internet policies, as more than a quarter of employers surveyed monitor workers' time spent online and sites visited."

Of those who plan to holiday shop online this season while at work, 43% of workers anticipate they will spend more than one hour, 23% said they will spend two hours or more and 13% will spend three hours or more.

According to the survey, workers also use the Internet for the following non-work related purposes:

Research. 61% of workers use the Internet for non-work related research and activities while they are at work. Among these workers, 37% said they spend an average of more than 30 minutes of their workday on non-work related online activities and 18% said they spend an average of an hour or more.

E-mail. 20% of workers send six or more non-work related e-mails per day. Among this group, 22% spend more than 30 minutes during the typical workday doing so.

Blogging. 9% of workers surveyed have a personal blog, and while nearly a quarter (23%) of them spend time blogging at work, only 9% of them spend 15 minutes or more blogging during the typical workday.

Social Networking. 41% of workers surveyed have a MySpace, Facebook or other social networking page. More than one-third (35%) of them spend time on their social networking page during the workday with 8% spending 30 minutes or more.

Instant Messaging: 20% of workers use instant messenger at least once a week.

More than 5,600 U.S. workers and more than 3,000 hiring managers and HR professionals participated in this survey, conducted between August and September.

Tip of the Day: How to fire an employee

Small or large, almost all businesses are feeling the pinch in this economic downturn. If your company is forced to lay off employees, it is critical that proper channels are followed to avoid potentially costly backlash in the future.

This SMB Human Resources Web Exclusive offers must-read tips on how to fire or layoff employees quickly and with a minimum of legal hassle.

Monday, December 1, 2008

Overheard At: How Piggly Wiggly got high-tech

In today's special Web-exclusive podcast, grocery chain Piggly Wiggly discusses how they moved from paper to online enrollment systems. Craig Massey, director of HR, shares the story with EBA Managing Editor McLean Robbins.

Tip of the Day: Get workers to tune in to benefits updates

With open enrollment season in full swing at companies nationwide, employees who miss out on benefits may be simply throwing money away.

Nearly a quarter of workers don't pay attention when new and potentially cost-saving methods are offered, states new data from More than half of employers report that workers are losing more than $250 through poor choices, and 20% report that workers are losing $1000 or more.

"Open enrollment ensures that eligible employees are not missing out on significant amounts of helpful benefits and wallet friendly programs," said Rosemary Haefner, vice president of human resources for "In a challenging economy, many people are being prudent about how they can save money by cutting back on exorbitant personal expenses, but also need to be aware of cost-saving benefits at work that are easily available to them."

Haefner offers the following tips to employees to take advantage of benefits savings:

-- Keep benefits on radar: Workers are already overwhelmed with e-mail, so make each communication count. Use bullets, bold, and consumer marketing techniques to convey benefit changes, especially when cost savings are available.
-- Speak up: Make yourselves available to employees, via telephone or one-on-one meetings.
-- Be proactive: Tell employees about savings available through benefit changes, and highlight information about savings in these communications. And during one-on-one meetings, be sure to take the time to educate employees about other benefit offerings that might be of interest, like transportation reimbursements, or FSA plans.

The survey was conducted among more than 6,100 U.S. workers and more than 3,000 hiring managers and HR professionals between August 21 and September 9, 2008.

News You Can Use: What sets your Gen X and Gen Y employees a-Twitter?

In collaboration with Editor in Chief Kelley Butler's article in the December issue "Leveraging BlackBerries and buzzwords," EBN conducted its own (albeit unscientific) research to figure out how your Gen X and Gen Y employees best communicate.

Following the model set forth in the original study, published by the Employee Benefits Research Institute, we asked a number of employees what terms they most did (and didn't) identify with.

Meaghan Lynch, second year medical student at Boston University

Disciplined: Very
Carefree: Not so much
Family-Oriented: Very
Hard-working: Very
Expensive Taste: Somewhat
Technologically Savvy: Not at all.
Charitable: Very
Optimistic: Very

Other words: Happy, honest, social, motivated, practical

Gina Anderson, researcher at Corporate Executive Board

Disciplined: Yes
Carefree: Somewhat
Family-Oriented: Not very
Hard-working: Yes
Expensive Taste: Somewhat
Technologically Savvy: Yes
Charitable: Somewhat
Optimistic: Extremely

Other words: energetic, intelligent, intellectual, organized, and conscientious

Alison Noelker, field sales representative at Eli Lilly & Co.

Disciplined: Very
Carefree: Not at all
Family-Oriented: Somewhat
Hard-working: Very
Expensive Taste: Somewhat
Technologically Savvy: Very
Charitable: Somewhat
Optimistic: Very

Other words: driven, energetic, determined, go-getter, empathetic, loyal

Molly Bernhart, associate editor at Fierce Markets

Disciplined: Somewhat
Carefree: Very
Hard-working: Very
Expensive Taste: Not at all
Technologically Savvy: Somewhat
Charitable: Somewhat
Optimistic: Very

Other words: poised/tactful, creative, principled

Kristina Libby, U.S. Program Coordinator, Global Entrepreneurship Week

Disciplined: very
Carefree: somewehat
Family-Oriented: not yet
Expensive Taste: relative to my income range
Technologically Savvy: Exceptionally
Charitable: yes
Optimistic: sickeningly so

Other terms: occasionally ambivalent, determined, open minded, fast paced, detail oriented, creative, knowledge hungry, bored with static nine-to-five hours, overachiever

In keeping with the idea that the Gen X and Gen Y audience best respond to messages distributed via Web 2.0 material, EBN has also begun distributing its own messages through social media channels like Twitter, Facebook, and a corporate blog, the Employee Benefit News Daily Diversion. If you're looking to get up to speed with your own employees, we'd suggest developing a familiarity with our own materials through these free and easy-to-use channels.