Mark your calendars, pros; there's some don't-miss action going on at Capitol Hill next month regarding target-date funds.
The first date to put in your Outlook is June 18, when the Department of Labor and Securities and Exchange Commission will hold a joint one-day hearing on the issues (read: abysmal '08 performance) surrounding target-date funds.
According to a press release from the agencies, the hearing will "examine the need for additional guidance given the importance of these investments to the retirement savings of investors." By "importance," they mean the large number of participants with savings in these funds. (Last year, 53% of 401(k) plans use target-dates as the default option.)
The hearing will cover topics like "portfolio composition, risk, and disclosure," according to DOL's website. Not very specific, is it? That's why the second don't-miss date is June 10 -- the day the agencies say they'll release the hearing agenda.
The last date to mark is June 5. That's the deadline for written requests to testify at the hearing. Make your voice heard! Send requests to e-ORI@dol.gov, or to Office of Regulations and Interpretations, Employee Benefits Security Administration, 200 Constitution Ave., N.W., Washington, D. C. 20210.
Wednesday, May 27, 2009
Yay or Nay: Is swearing at work okay?
Two surveys find differing opinions on whether it's okay to swear at the workplace, and I want to get your thoughts, pros.
According to a poll by SurePayroll, 80% of respondents believe that even seemingly innocent swearing on the job can be interpreted the wrong way and have negative consequences, even though 40% admit to swearing themselves at least occasionally and 11% actually think swearing can boost employee morale.
Another study from researchers at the University of East Anglia (in Norwich, England) finds that embracing your inner Blago can "reflect solidarity and enhance group cohesiveness, or as a psychological phenomenon to release stress," according to study director Yehuda Baruch.
The study also discovers younger workers are more tolerant of profanity, and that women swear more than you might expect of the fairer sex and execs are less profane than the rank-and-file.
So, is swearing at work okay -- yay or nay?
According to a poll by SurePayroll, 80% of respondents believe that even seemingly innocent swearing on the job can be interpreted the wrong way and have negative consequences, even though 40% admit to swearing themselves at least occasionally and 11% actually think swearing can boost employee morale.
Another study from researchers at the University of East Anglia (in Norwich, England) finds that embracing your inner Blago can "reflect solidarity and enhance group cohesiveness, or as a psychological phenomenon to release stress," according to study director Yehuda Baruch.
The study also discovers younger workers are more tolerant of profanity, and that women swear more than you might expect of the fairer sex and execs are less profane than the rank-and-file.
So, is swearing at work okay -- yay or nay?
Tuesday, May 26, 2009
Tip of the Day: Raise the roof (on HSA limits)
The Internal Revenue Service recently released a notice outlining 2010 minimums and maximums for health savings accounts plans and high-deductible health plans.
For calendar year 2010, the annual HSA contribution limit for an individual with self-only HDHP coverage is $3,050, up $50 from 2009. For an individual with family coverage under a HDHP, the new limit is $6,150, up $200 from 2009.
The 2010 minimum on HDHP deductibles, for self-only HDHP coverage, jumped to $1,200 (up $50 from 2009), and $2,400 (up $100 from 2009) for family coverage. The 2010 maximum on HDHP out-of-pocket expense increased to $5,950 (up $150 from 2009) for self-only HDHP coverage and $11,900 ($300 from 2009) for family HDHP coverage.
Related EBN coverage:
What's in it for me?
Offering answers to 'What's happening to my health plan?'
For calendar year 2010, the annual HSA contribution limit for an individual with self-only HDHP coverage is $3,050, up $50 from 2009. For an individual with family coverage under a HDHP, the new limit is $6,150, up $200 from 2009.
The 2010 minimum on HDHP deductibles, for self-only HDHP coverage, jumped to $1,200 (up $50 from 2009), and $2,400 (up $100 from 2009) for family coverage. The 2010 maximum on HDHP out-of-pocket expense increased to $5,950 (up $150 from 2009) for self-only HDHP coverage and $11,900 ($300 from 2009) for family HDHP coverage.
Related EBN coverage:
What's in it for me?
Offering answers to 'What's happening to my health plan?'
Overheard @: 'We had a $3 billion investment loss'
If the recession drags on, it will be a red-hot summer for the PBGC -- emphasis on "red."
In a report from BenefitNews.com, the Pension Benefit Guaranty Corp. reports that the agency’s underfunded liabilities for its single-employer insurance program hit an all-time high of $33.5 billion, surpassing the former record of $24 billion in 2004.
“The reason that our deficit grew is not because of investment losses, rather because of more plan terminations coming through the agency since the last fiscal year,” Constance Markakis, senior attorney advisor in the legislative and regulatory department at PBGC, said late last week. “We had a $3 billion investment loss on our $63 billion assets portfolio. Also, 70% of our assets are invested in fixed-income.”
Still, the recession and the stock market decline means more defined benefit plans are substantially underfunded, thus seeking distressed terminations. “The $33.5 billion includes both actual terminations and probable terminations, which are terminations that we predict will occur within the next year,” explained Markakis.
PBGC insures the pensions of about 33.8 million workers and retirees in about 28,000 private-sector DB plans under its single-employer insurance program and 10.1 million participants under its multiemployer program in about 1,500 plans, according to the Employee Benefit Research Institute.
In a report from BenefitNews.com, the Pension Benefit Guaranty Corp. reports that the agency’s underfunded liabilities for its single-employer insurance program hit an all-time high of $33.5 billion, surpassing the former record of $24 billion in 2004.
“The reason that our deficit grew is not because of investment losses, rather because of more plan terminations coming through the agency since the last fiscal year,” Constance Markakis, senior attorney advisor in the legislative and regulatory department at PBGC, said late last week. “We had a $3 billion investment loss on our $63 billion assets portfolio. Also, 70% of our assets are invested in fixed-income.”
Still, the recession and the stock market decline means more defined benefit plans are substantially underfunded, thus seeking distressed terminations. “The $33.5 billion includes both actual terminations and probable terminations, which are terminations that we predict will occur within the next year,” explained Markakis.
PBGC insures the pensions of about 33.8 million workers and retirees in about 28,000 private-sector DB plans under its single-employer insurance program and 10.1 million participants under its multiemployer program in about 1,500 plans, according to the Employee Benefit Research Institute.
Friday, May 22, 2009
Tip of the Day: Wait! You forgot your 401(k)!
When an employee leaves, I know you must have your offboarding procedures: take their security card, give them a COBRA application, perhaps conduct an exit interview. But somewhere in those procedures, I beg of you to remind them to take their 401(k)s with them.
New research from Charles Schwab shows 43% of assets held by 401(k) participants who left their jobs in the first quarter of 2008 had not been moved a year later.
And no, there's nothing terribly wrong with that, but participants should be encouraged to be active and engaged about what they do with those savings. “We urge people to educate themselves on their options when they leave a job, especially if they expect to be out of work without access to a savings plan at a new job,” says Rene Kim, Charles Schwab senior vice president.
“In many cases, rolling an old 401(k) into an IRA can be a strategic move, because it is tax free, there is no penalty, and an IRA provides more investment choices,” Kim continues. “A rollover IRA can also keep retirement savings more top of mind. People who leave money in a previous employer’s 401(k) plan often forget the money is even there, which can result in asset allocations falling way off balance based on an individual’s savings objectives and risk tolerance.”
And while rolling savings into a new employer's plan also is a good move, Kim (and every other retirement expert on the planet0 strongly warns against cashing out.
“Unless there is a dire and immediate financial need, cashing out a 401(k) is almost always a bad idea,” Kim says. “Cashing out eliminates the power of compounding savings, and people generally find it very hard to get back on track once they begin tapping retirement savings for shorter term needs.”
New research from Charles Schwab shows 43% of assets held by 401(k) participants who left their jobs in the first quarter of 2008 had not been moved a year later.
And no, there's nothing terribly wrong with that, but participants should be encouraged to be active and engaged about what they do with those savings. “We urge people to educate themselves on their options when they leave a job, especially if they expect to be out of work without access to a savings plan at a new job,” says Rene Kim, Charles Schwab senior vice president.
“In many cases, rolling an old 401(k) into an IRA can be a strategic move, because it is tax free, there is no penalty, and an IRA provides more investment choices,” Kim continues. “A rollover IRA can also keep retirement savings more top of mind. People who leave money in a previous employer’s 401(k) plan often forget the money is even there, which can result in asset allocations falling way off balance based on an individual’s savings objectives and risk tolerance.”
And while rolling savings into a new employer's plan also is a good move, Kim (and every other retirement expert on the planet0 strongly warns against cashing out.
“Unless there is a dire and immediate financial need, cashing out a 401(k) is almost always a bad idea,” Kim says. “Cashing out eliminates the power of compounding savings, and people generally find it very hard to get back on track once they begin tapping retirement savings for shorter term needs.”
Overheard @: HSA enrollees have no regrets
As more employers switch to CDHPs and HSAs to fight the good fight against health care costs, they have greater reassurance that the plans will be well-received by employees, as two new surveys show HSA participants have few regrets about switching to the plans.
In an online survey by OptumHealth, 82% are content with their accounts and 74% would recommend an HSA to a friend. The online survey involved 500 HSA owners and was conducted in February and March.
Further, countering the charge from opponents that HSAs are only for the healthy and wealthy, America’s Health Insurance Plan reports that almost half (49%) of HSA holders live in neighborhoods with median incomes under $50,000, according to 2000 Census data.
AHIP also finds about 8 million Americans are covered by an HSA-eligible insurance plan. The study also reveals that HSA owners are forward thinkers when it comes to financial and physical well-being. For instance, 64% have asked about generic options for medication and 47% have queried their physicians about charges.
HSA accountholders also believe that people need to become more engaged in their health care, with 83% of respondents agreeing that consumers should research and comparison shop their health care options as they would for a new television set. Additionally, 72% said that individuals should be responsible for helping to manage their health care costs.
Related EBN coverage:
Readers sound off on March editorial [on HSAs]
CDHPs praised, ROI panned
In an online survey by OptumHealth, 82% are content with their accounts and 74% would recommend an HSA to a friend. The online survey involved 500 HSA owners and was conducted in February and March.
Further, countering the charge from opponents that HSAs are only for the healthy and wealthy, America’s Health Insurance Plan reports that almost half (49%) of HSA holders live in neighborhoods with median incomes under $50,000, according to 2000 Census data.
AHIP also finds about 8 million Americans are covered by an HSA-eligible insurance plan. The study also reveals that HSA owners are forward thinkers when it comes to financial and physical well-being. For instance, 64% have asked about generic options for medication and 47% have queried their physicians about charges.
HSA accountholders also believe that people need to become more engaged in their health care, with 83% of respondents agreeing that consumers should research and comparison shop their health care options as they would for a new television set. Additionally, 72% said that individuals should be responsible for helping to manage their health care costs.
Related EBN coverage:
Readers sound off on March editorial [on HSAs]
CDHPs praised, ROI panned
Thursday, May 21, 2009
News You Can Use: Republicans reveal health care reform proposal
Us EBNers don't believe in duplicating efforts, so rather than rehash the new Republican-led health care proposal here, I'll just link you to the writeup from Benefits Explained, the blog from EBN sister title Employee Benefit Adviser.
The key buzzterms you'll want to note, though, are: tax credits, health insurance exchanges and no mandates. And no, you didn't miss anything; the plan does seem to remove employers' tax exemption for providing health benefits. Let the debate begin!
The key buzzterms you'll want to note, though, are: tax credits, health insurance exchanges and no mandates. And no, you didn't miss anything; the plan does seem to remove employers' tax exemption for providing health benefits. Let the debate begin!
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