Employees Happier with Retirement Plans
Employees' satisfaction with their employer-sponsored retirement plans has increased at > about the same rate that their happiness with their group-health benefits has diminished, finds a report from New York-based Towers Watson.
In the consultancy's 2013/2014 Global Benefit Attitudes Survey, 67 percent of 5,070 workers of non-government organizations with 1,000 or more employees said they were generally satisfied with their retirement benefits in 2013, a jump of four percentage points compared to results reported in 2010.
Conversely, 59 percent of employees said they were satisfied with their group-healthcare benefits, versus 64 percent of employees who said the same in 2010. Satisfaction was lowest among employees enrolled in high-deductible health plans when measured against other plan types, with 48 percent of this group indicating they were satisfied with their health benefits in 2013.
PRC Issues Fact Sheet
The Washington-headquartered Pension Rights Center has issued an online fact sheet in an effort to explain funding issues in multi-employer pension plans, the retirement plans negotiated by a union with a group of employers typically in the same industry.
According to the Pension Rights Center, the fact sheet is designed to address questions about the funding of multi-employer pension plans, what happens when multi-employer plans run out of money, how to determine if a multi-employer plan is underfunded, how Pension Benefit Guaranty Corp. multi-employee guarantee levels are calculated and how underfunded plans can be preserved for the long-term, for example. The fact sheet also provides links to online calculators to be used to gauge the impact that possible benefit cuts or guarantee limits set by the Pension Benefit Guaranty Corp. could have on a multi-employer-plan pension.
Keeping Plans Simple
A new study from New York-based MetLife finds simplicity surpasses flexibility and choice as the leading philosophy behind retirement-plan design.
In the 2014 MetLife Qualified Retirement Plan Barometer, which polled 152 Fortune 1000 companies, 89 percent of companies offering broad access to defined-benefit and defined-contribution plans and 77 percent of defined-contribution-only plan sponsors said they strive to "keep it simple and avoid over-complication" in terms of retirement-plan design.
The study also found a majority of companies offering a defined-contribution plan saying they communicate to all or most of their participants about key topics related to retirement income, including the effects of longevity (56 percent) and communications about retirement income throughout the participant's tenure in the plan (52 percent).
"Since the advent of the modern DC plan, plan sponsors have focused on how effectively the plan provided choice and flexibility to participants in investment selections. The shift toward simplicity is a potentially significant change in how plan sponsors view their role," said Cynthia Mallett, vice president of industry strategies and public policy for MetLife's corporate benefit funding group, in a statement.
"This new perspective," she added, may signal a movement to a more balanced division of responsibility in DC plans, which is in line with DC plans' emerging role as the primary retirement plan chassis of the future."
Roth IRA Balances Growing
An analysis by the Employee Benefit Research Institute, an organization based in Washington, finds Roth IRA balances grew < at > more than double the rate of traditional individual retirement accounts among a consistent set of IRA owners over the three-year period that spanned 2010 to 2012.
Based on the latest results from the EBRI IRA Database, the median increase for these consistent owners of Roth IRAs was 16.6 percent from 2010 to 2012, compared to 7.9 percent for consistent owners of traditional IRAs.
Looking < at individuals who maintained an IRA account in the database over the three-year period, the overall average balance increased each year, going from $95,431 in 2010 to $95,547 in 2011 and to $106,205 in 2012.