In case you missed it: Learn how to navigate open enrollment and help your employees make informed decisions this fall
Fall is now in full swing, though to many companies, it’s been fall for months. Starbucks even started serving its Pumpkin Spice Latte in mid-August, the earliest the drink has ever been offered. Joining the hype came Spam – yes, the meat in the can – when they announced last year that they would be offering a Pumpkin Spice flavor. Although it turned out to be a joke, it makes you wonder what other businesses have in store this season.
But while the rest of the company contemplates options for incorporating more pumpkin spice into their lives, human resources professionals are preparing for a completely different season.
It's open enrollment time and it's the job of the HR department to make sure that employees have the information they need to select the right benefit options. That may include help with choosing a plan for retirement savings.
According to the Social Security Administration, half of the workers in the private sector report having no private pension coverage and 36% report that neither they nor their spouse has saved any money for retirement.
At the same time, modern employees can expect to live even longer, substantially raising the amount of money it will take to support them through retirement.
In 1940, the life expectancy of a 65-year-old was about 14 years; today it is over 20 years and climbing.
HR Help for Retirement Planning
Workers are looking to employers to guide them in how to save, plan and prepare for retirement. Yet, fewer than 2 in 5 employers provide assistance in the form of educational resources, information about distribution options, retirement planning materials or the ability to make systematic withdrawals for retirement savings, according to research by the non-profit TransAmerica Center for Retirement Studies.
The organization's 19th Annual Retirement Survey finds, among other things, that while "most employers (75%) consider their companies to be 'aging friendly' by offering opportunities, work arrangements, and training and tools needed for employees of all ages to be successful,” only 54% of workers agree. This is a greater disparity than last year, which saw 70% of employers and 56% of workers feel that their respective companies were aging friendly.
Tools that employers can provide include quarterly statements of retirement savings, professional advice on how to invest retirement income, and online calculators and tools to project savings and income, including mobile apps, research shows.
But employers can do much more, according to the survey:
- Promote available tax credits: Only 28% of employers are both aware of the Saver’s Credit and actively promoting it to their employees. This tax credit is available for eligible taxpayers saving for retirement in a qualified IRA.
- Offer automatic enrollment in 401(k)s or similar plans: Only about 21% of plan sponsors, including 28% of large, 25% of medium and 15% of small companies, offer the automatic enrollment even though 80% of workers find it appealing.
- Promote both retirement savings and healthy lifestyles: While most employees are not saving enough for medical expenses in retirement, healthy habits can decrease future medical costs.
- Help employees who are caregivers by offering flexible scheduling and PTO policies
- Encourage employees to maintain up-to-date job skills so they can continue working longer. Almost half of workers report interest in phased retirement,
where they can work part-time before full retirement.
Invest in Your Employees by Investing in Human Capital Management Software
At SBS Payroll, our clients have access to comprehensive HR software and expertise that can make the open enrollment process much smoother and efficient. We offer multiple options of payroll plus HR modules that can be customized to include just the services you need, including a fully integrated system for online benefits enrollment.
Our clients have the added advantage of our sister companies: Payroll Tax Management and Time Rack. Together we provide state-of-the-art technology and solutions that span the entire landscape of compensation needs. Click on the link below to learn more about how we can help streamline open enrollment and so much more.