PLANSPONSOR - August/September 2018 - 36

2018 PLANSPONSOR NATIONAL CONFERENCE
For this reason, all plan sponsors should
consider the adequacy of coverage and get
as much of a coverage limit as they can.
Fleckner concluded that plan sponsors
should always make plan changes
they think are better for participants; that
is the ERISA standard. " If you are taking
steps just due to litigation fears, you are
breaching your fiduciary duty because
you must be looking at the best interest
of participants, " he said. -Rebecca Moore
Health Meets Wealth
Nathan Voris, managing director for business
strategy at Schwab Retirement Plan
Services, and Michael Kane, managing
director of Plan Sponsor Consultants, said
one purpose for offering holistic benefits,
and education that helps employees
see the link between health and wealth
concerns, is that it prevents the 401(k)
plan from being used as a checkbook.
" There are numerous academic
studies demonstrating the various ways
financial stress impacts productivity and
absenteeism, leading to delayed retirements, "
Kane said. " Just take the prevalence
of 401(k) plan loans for people with
under $60,000 per year in income-it's
about 60% or more. The statistics show
the [financial] wellness need is huge. "
Voris and Kane noted that retirement
plan recordkeepers and advisers can each
help their sponsor clients build a plan to
AUDIENCE POLL
What is your company's position on enabling emergency
savings accounts?
n We have not considered adding an
emergency savings account option
n I'm planning to learn more about adding an
emergency savings account option
n My company offers an emergency savings
account option
link health and wealth topics.
" A big part of this effort will be
building out a marketing plan, " Kane
suggested. " We have seen plan sponsors
have success getting participants to
go through education modules or take
specific actions by using a gift card [from
a] giveaway [program], for example. But
what is the most effective thing you can
do? Have your CEO write a letter directly to
employees and explain why this is important
and that their physical and financial
health is valued. If this is tied to a digital
rollout, it can be incredibly powerful. "
" Picking goals and metrics for
measuring the performance of any new
programming will be very important, "
Voris added. " When it comes to setting
goals and designing a strategy, I always
recommend starting with the data and
bringing together the stakeholders. This
will include the recordkeeper, the health
76.3%
20.6%
3.1%
care provider, and maybe even your insurance
providers, as well. The goals, strategy
and time frame are different for everyone,
so getting the objectives set and mapping
out the required data is key. "
Kane concluded that the use of an
adviser or coach is especially important
here. " In our experience, the adviser
will be critical in getting these programs
created and actually rolled out, " he said.
-John Manganaro
Factors Affecting
DB Funding Strategies
The average funding ratio of corporate
defined benefit (DB) plans has gone up
over time: from 78.8% in 2012 to 89.4%
this year, but there is still some room for
improvement, said Robin M. Solomon, a
partner at Ivins, Phillips & Barker.
With funding relief starting in 2008
and extending through 2020, there is
still much flexibility in setting actuarial
assumptions for determining funded
status.
She contended that Pension Benefit
(FROM LEFT, on stage:) Alison Cooke Mintzer moderates " Employee Wellness: Health Meets Wealth "
with Nathan Voris of Schwab Retirement Plan Services and Michael Kane of Plan Sponsor Consultants.
Guaranty Corporation (PBGC) premiums
have become a tax on using funding
relief. Premiums keep growing, costing
plans more for unfunded benefits. Since
2012, flat PBGC premiums and variable
premiums have been increased by legislation
and are now about double what
they were. Next year, plans will pay an
$80-per-person flat rate. In addition, plan
sponsors have been looking at persistently
low interest rates, which drive up
plan liabilities; further, new mortality
tables for 2018/2019 increase liabilities by
36 PLANSPONSOR.com August-September 2018

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