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May 16, 2012

You Will Want to Check This Out!

Filed under: Benefits,Compensation,Retirement — Tags: 2:40 pm

Every now and then you run across something that is just so good you have to share it.  That is the case of what happened to me yesterday as I was reading through my email inbox of HR newsletters.  Surprising to me, this useful tool happens to be from the Social Security Administration.  Usually we don’t expect to find “helpful” items from the government, but it seems the trend has been turning in that direction.

You may recall those paper statements you receive in the mail annually estimating your retirement benefits.  Those mailings were suspended last year and are currently only being sent to workers 60 and older who aren’t already receiving benefits.  So the only way you have going forward (until you turn 60) to receive this information is to use this tool I stumbled across.

Effective May 1, you may access your retirement benefit information on Social Security’s website,  This website allows you to view an online version of your earnings, along with estimates for retirement, disability and survivors benefits.

The process of logging in is actually pretty simple.  You will be asked a few questions for security reasons, which of course is essential.  And after you set up your user name and password, you are good to go.  There are even some additional calculations you can request for various retirement scenarios.

Hopefully when you log in you will see some numbers that bring a smile to your face.  If not, check out the popular baby names that also appears on the home page.  Another fun link I found along the way!


March 28, 2012

EAPs – A Benefit You May Want to Check Out

Monday’s blog alluded to the reality of the high cost of providing health insurance benefits to employees.  As a result, many medical insurance plans are being redesigned to include higher deductibles and copays to counteract the increase in premiums.  Employers still want to provide a well-rounded offering of benefits to employees, but it is becoming increasingly difficult to do so without affecting the overall budget.

A benefit worth checking out is EAPs – Employee Assistance Programs.  EAPs have been around for decades, but have generally been used as a resource to help workers with substance-abuse issues on a confidential basis.  That is no longer the case.  EAPs are getting a makeover, partly as a result of employers concern about everyday stress in employee’s lives.  According to Stella Antonakis, senior associate of total health management at Mercer, “It’s everything under the umbrella of behavioral and mental health.”

So how can an EAP help?  Below are a few of the services they provide:

  • Find affordable child care or elder care
  • Financial services, such as refinancing a mortgage
  • Sort through health care costs
  • Referral for tax accountant
  • Legal services
  • Planning a wedding
  • Health and wellness services
  • Management training

The reason EAPs are so attractive as an “add-on” benefit is that they are relatively cheap for employers, costing about $1 to $3 per month.  However, the utilization of services is only 2% – 6% of the employee population.

As an employer, if you have an EAP, it may be a good time to re-educate your employee population about the vast array of services that can be provided.  Many mental and behavioral issues in an employee’s life affect their worklife and productivity.  If you don’t have an EAP, it may be time to explore adding one as an additional inexpensive benefit which could provide valuable services to your employee population.  For more information, click here.

EAPs Modernize, But Employees Are Slow to Catch On


March 7, 2012

How Does My Organization’s 401(k) Plan Compare to Others?

Filed under: Benefits,Management Practices,Retirement — Tags: , 7:00 am

One of the biggest challenges in HR’s is in the area of benefits.  For many organizations, benefits may be the deciding factor for a prospective employee in responding “yes” or “no” to a job offer.  It is important for organizations to know where they stand in comparison to their peers in terms of competitiveness of benefits.  Recently, the IRS posted an Interim Report of their findings from the 401(k) Compliance Check Questionnaire.  This questionnaire was sent out in 2010 to a representative sample of 401(k) sponsors of all sizes, with a response rate of 98% of the 1,200 surveys completed.

The IRS website states that there are more than 500,000 Section 401(k) plans covering more than 60 million Americans.  The purpose of the survey was to understand compliance issues and check the operation of these plans since they affect so many Americans.

The Interim Report lists the highlights of the findings, including items pertaining to plan type, employee contributions, and employer contributions.  Because of the broad sampling, this report is a valuable resource for 401(k) plan sponsors to compare their plan to survey results.  Additionally, the questionnaire is available for organizations to complete as an internal control tool to review your plan for compliance issues.  In the event you find areas that need corrections, there is a 401(k) Fix-It Guide to help correct them along with a “correcting plan errors” Web page.

The final report, highlighting the differences found between large and small plans, will be released by the end of 2012.  In the meantime, resources are plentiful as indicated by the links above.


September 23, 2011

HR Fact Friday: 25% of Credit Unions Do Not Have Succession Plan

Filed under: Retirement,Succession Planning11:30 am

Succession planning at its very essence is a process to ensure that the right people are in the right places at the right time. A main goal of succession planning is to, as much as possible, fill vacancies with internal candidates that know and understand the culture of the organization and whom the board has a true understanding of character, performance history and work ethics.

CUNA’s 2010-2011 Complete Credit Union Staff Salary Survey Report shows 58% of Credit Union’s have a CEO succession plan, 16% plan to by year’s end, but 25% don’t have one at all. 25%! Add to this another sobering statistic—by 2016, 60% of the credit union CEOs will be retiring and the supply of leadership candidates will not meet the demand.

And this is just an example of one small vertical industry. The trends are the same in many industries as baby boomers reach retirement age.  

At the risk of oversimplification, the five steps in developing a meaningful succession plan are:

  1. Identify positions and estimate timeframe of projected transitions
  2. Identify succession candidates
  3. Implement development plans for candidates to acquire and enhance required skill sets
  4. Assign mentors and periodically evaluate readiness of candidates
  5. Continually review plan with CEO and Board

It’s no wonder talent management vendors are hopping on the bandwagon and scrambling to provide succession planning services. HRN has been providing succession planning consulting and plan development services for over 10 years.


May 11, 2011

Weekly Wednesday Acronym – EPCU

Filed under: Compliance,Retirement — Tags: , 2:52 pm

This week’s acronym is most likely one that not many of us are familiar with, but a very important acronym for us to be aware of.  Read on, and you will learn why.

The Employee Plans Compliance Unit (EPCU), a dvision of the IRS, develops compliance projects and performs data analysis to focus on areas of potential non-compliance. Taxpayers are contacted by correspondence, telephone and/or other media (not e-mail) and most issues are resolved without an on-site examination of the books and records of the plan.

As part of a larger IRS compliance initiative, the current featured project of the EPCU are 403(b) plans that colleges and universities sponsor.  If you are a plan fiduciary, take note.  According to a press release issued by the IRS, over 300 large, small, public, and private higher education institutions will receive a 21-item questionnaire from the IRS. 

Make sure to respond!!  Failing to respond will almost guarantee a follow-up by the IRS and result in a formal IRS audit.  As the IRS warns “failure to provide the information could result in further action or examination of your plan.”  What appears to be a major focal point of the plan inquiry is whether the plan offers all employees an “effective” opportunity to participate…the “universal availibility” requirement. 

If we are to learn anything from other recent audits, such as the most recent 401(k) plan audit initiative, it is to respond timely to hopefully eliminate the need for further action or examination of your plan.


March 30, 2011

How Much Money Do Employees Need for Retirement?

Filed under: Retirement3:51 pm

Estimates for how much an individual needs to save for retirement are all over the map and vary widely depending upon someone’s lifestyle and specific situation.  The consulting firm, Hewitt Associates, has released a study, Retirement Income Adequacy at Large Companies, the Real Deal 2010 which examines the issue. The study looked at organizations of 1,000 or more employees and worked from the premise that employees would stay with their firms for at least 30 years.  Employees at large and medium organizations tend to receive the richest retirement benefits while those at small companies often have no retirement program at all.


Hewitt has determined that employees who retire at age 65 will require resources that total at least 15.7 times their annual pay at retirement to continue living in the manner to which they’ve grown accustomed.  Resources include: defined contribution plans (e.g., 401ks), defined benefit plans (e.g., pensions), Social Security, and other assets.   The study found that employees at these large firms that have defined contribution and defined benefit plans, would, on average, have 91% of what is needed for retirement.


Unfortunately, few organizations still have pension plans.  It’s estimated that employees with only a defined contribution plan (401k) will reach 74% of what’s required.  Men appear better prepared, with 88% of their retirement assets covered, while women on average meet only 81% of resources needed.  Obviously, employees who work longer have a better chance of retiring with a sufficient asset mix.  Those retiring at 62 typically have 65% of what’s needed, while those who wait until 67 have 98%.   Individuals who live longer are at greater risk of running out of money, with those who live longer than average, to the 80th percentile (women 93 and men age 91), meeting just 72% of their requirements.



December 27, 2010

2011 Retirement Plan Adjustments

Filed under: Retirement2:49 pm

The IRS recently announced that there will be no adjustments to retirement plan dollar limits  for Tax Year 2011 (see IR 2010-108).  The limitations will remain the same as the 2010 limits.

For example, the limitation on annual salary deferrals to a 401(k) plan will stay at $16,500 and the “catch-up” at $5,500.  The Social Security Taxable Wage Base also is unchanged and remains at $106,800.


April 30, 2010

HR Fact Friday: Employers Allowing Larger 401(k) Contributions

Filed under: Retirement — Tags: , , 8:32 am

Sixty-eight percent of employers report that their company allows employees to contribute 25% or more of their earnings into their 401(k) plan, according to a recent survey of 401(k) practices by BLR.

This is a significant increase over the 58% of organizations that allowed such 401(k) contribution levels in BLR’s Survey of Employee Benefits in late 2006.

While 22% of responding employers do not match employee 401(k) contributions, 32% match between 2% and 4% of salary, and 33% match up to 6%. Of those organizations that match 401(k) contributions, most (59%) match at least 50 cents on each dollar contributed.

The survey, conducted by BLR’s HR Daily Advisor in November 2009, received over 1,000 responses, of which 75% originated from companies with fewer than 500 employees. The responses were evenly divided geographically within the United States.

For detailed survey results, see the 401(k) Practices Survey Results.



March 12, 2010

HR Fact Friday: Nearly 25% of Workers Put Retirement Plans on Hold

Filed under: Benefits,Retirement — Tags: , , , 8:46 am

Almost one in four workers in an Employee Benefit Research Institute survey postponed plans to retire this year, with 29% of those citing the poor economy as the reason.

The key other reasons cited by the 24% who put off retirement plans included a change in employment status, 22%; inadequate finances, 16%; and the need to make up stock market losses, 12%, according to EBRI’s 2010 Retirement Confidence Survey, released Tuesday, March 9.  Also, only 69% of workers and their spouses this year reported having saved for retirement, down from 75% in last year’s survey.

Still, 16% of workers said they were very confident about having enough money for a comfortable retirement this year, up from 13% during the previous year. Twenty-seven percent this year said the total value of their savings and investments in general, excluding the value of their primary home and any defined-benefit plan, were less than $1,000, and 54% said the total value was less than $25,000. Annuities or other guaranteed-income product were purchased by 14% of retirees, and 11% of workers said they were very likely to do so.

“Americans’ attitudes toward retirement have clearly tracked the economy the last couple of years, and that seems to be the case in 2010,” said Jack VanDerhei, EBRI research director and a co-author of the survey, in a news release. “Unfortunately, while their attitudes are stabilizing, their preparation for retirement is not. A distressing number of people have no savings at all.”

The survey, based on telephone interviews in January with a total of 1,153 workers and retirees age 25 and older, was conducted by EBRI and research firm Mathew Greenwald & Associates.

Source:, Doug Halonen of Pensions & Investments, a sister publication of Workforce Management.


November 6, 2009

HR Fact Friday: Survey Finds Service Requirements for Joining 401(k) Easing

Employers are improving access to their 401(k) plans, according to a survey released Wednesday, November 4.

The Hewitt Associates Inc. survey of 300 midsize to large employers found that 74 percent of 401(k) plans do not have a service requirement, up from 61 percent in a comparable survey Hewitt conducted in 2007.

In addition, looking at plans with employer matching contributions, 56 percent of plans in 2009 did not have any service requirements for participants to receive the match, up from 44 percent in 2007.

On the other hand, 10 percent of employers have suspended their matching contributions during the past two years, the survey found.

Employers continue to move away from investing matching contributions exclusively in company stock. Just 17 percent of employers do so, down from 23 percent in 2007 and 45 percent in 2001.

That downward trend coincided with the collapse of one-time energy giant Enron Corp.

Enron matched employees’ deferrals exclusively with company stock and barred employees until age 50 from divesting those shares, leaving thousands to watch helplessly as the value of their shares plunged to virtually nothing.

The survey found a big increase in the number of employers offering an automatic enrollment feature.

Such programs are geared to those employees—typically new hires—who don’t indicate whether they want to enroll in their employer’s 401(k) plan. With automatic enrollment, those employees are enrolled unless they specifically object.

In 2009, 58 percent of employers offered automatic enrollment, up from 34 percent in 2007 and 19 percent in 2005. Of those employers using automatic enrollment, 69 percent default employees into a target-date fund, up from 50 percent in 2007.

The funds are so named because the investment mix is adjusted over time, with a more aggressive allocation for funds with retirement target dates further in the future and more conservative asset allocations for retirement dates that are closer.

A summary of the survey, “Trends and Experience in 401(k) Plans,” is available online at
Source: Jerry Geisel of Business Insurance, a sister publication of Workforce Management

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