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What Keeps Plan Sponsors Up at Night?

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At the Sobel & Co. Employee Benefit Plans Symposium on May 1, 2018, Jamie Greenleaf, Principal at Cafaro Greenleaf; Randy Cherkis, Director, Employee Benefits at North America, Evonik Corporation; and Paul Manion, Regional Directors, DC retirement Solutions, Vanguard, shared their insights on new and re-emerging trends in the retirement plan area by taking a strategic approach to decision making.

“What keeps plan sponsors up at night?” was the first question that was raised. The response was consistent across the panel and throughout the audience: plan sponsors worry that they don’t even know what to worry about!! Their fiduciary responsibilities, the changes in the workforce, the growing complexities driven by advancing technology, new regulations and the demands for more information are all shaping the sector. 

Those with responsibilities for administration of employee benefit plans, including HR professionals, CFOs, plan sponsors and plan administrators all recognize that today’s workplace doesn’t look anything like it did just a few years ago. There are now multiple generations of employees, and with changing demographics needs, values have changed as well.  There is no longer a “one size fits all” formula for ensuring that your employees’ financial needs are being met, or will be met, by their employee benefits package.

The panelists emphasized the importance of assuming a holistic perspective, understanding that life cycles and life stages present vastly different challenges. Some employees are seeking ways to pay for tuition while others are purchasing a home or building their reserve fund.  No one wants to outlive their assets - and yet the average age continues to rise, increasing the anxiety about having appropriate coverage and being prepared for growing medical costs at the same time.

Employee education is one of the best ways to address this broad spectrum of needs within any employee group.  Commitment to financial wellness means being dedicated to building awareness about financial concerns.  This can be accomplished with classes customized for each group, offering pragmatic solutions to each unique situation.  While design changes (including auto enrollment, auto escalation and re-enrollment or annual re-enrollment) continue, sponsors must focus specifically on the impact they are having on their employees’ ability to fulfill their hopes and dreams for a comfortable retirement.

Education combined with transparency enables the employees to gain a clear picture of their situation and a deeper recognition of how they can leverage their assets in spite of market volatility.

The panelists cautioned that those with a fiduciary role face the awesome responsibility of managing and monitoring their employees’ savings. They must be concerned about every aspect of the plan, including the return on investment for the participants. They must also be prudent regarding fees, while seeking the most value for those they represent.  All of this culminates in understanding the role of a fiduciary and the care with which they must approach the task.

The audience had many questions for this panel of experts, including a discussion on how small and mid-size firms can address some of these issues by outsourcing the skills to those who are most qualified. Everyone is breaking new ground, trying to identify the most effective ways to engage employees and remain relevant and meaningful for them all.       

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