PLANSPONSOR - August - September 2022 - 13

determine its goals for vesting: Is it to
retain employees? To protect the company's
money? he says.
Or is it to help attract new employees?
" That's become a much larger part of the
equation in the past year or two, " Sampson
says, citing the tight labor market. " We've
seen many companies go to immediate
or shorter vesting. The thought is, if
people have to wait years to get the [match]
money, it's not necessarily seen as a strong
benefit. "
Sampson points especially to higherlevel
employees in technical or medical
fields, such as pharmaceuticals or biotech,
where " vesting is almost a nonstarter.
They're trying to pull people out of big
employers, so they try to mirror the big
employers' benefits. But
in workforces
such as restaurants, hospitality and retail,
where turnover is high, having a vesting
schedule can make sense to an employer. "
It saves the company money when a
worker leaves quickly and potentially can
motivate people to stay, he says.
TIDBITS
'Well-Being for All'
To retain employees, show them you care, Mercer found in surveying 14,000-plus workers
worldwide. It says, making health care affordable can help all workers feel supported.
Coverage Options for Low-Wage Earners
n Currently in place n Planning/Considering
Plan with no/low deductible, e.g., a copay-based plan
Narrow-/High-performance network plan with low cost-sharing
Salary-banded health plan contributions
Telehealth for workers ineligible for the medical plan
On-site/Near-site health services
A medical plan option free to the worker
A medical plan option free to the worker + children
Source: Mercer, " Health Benefit Strategies for 2023 "
4% 3%
16%
17%
17%
17%
11% 11%
15%
12%
12%
41%
24%
11%
Even given that strategic value, he
says, " The reality is, vesting might be
a dying breed, in this post-COVID-19
workforce we're all experiencing. We live
in an instant-gratification world: People
want it now. "
The Changing Conversation
According to Droblyen, a company's decision
about vesting " boils down to a tradeoff.
You need to pick what you think is
more valuable to your business. "
DeBello says he has read with puzzlement
recent media coverage criticizing
employers that use a vesting schedule.
He
says
he sees
no
unfairness
having multiyear vesting.
" We very rarely see employers that
tout, 'It's free money with no strings
attached.' " Most participants will be able
to see both their total balance and vested
balance on the recordkeeper's participant
website, and group education meetings
in
promoting the idea of an employer match
to employees as " free money, " while also
" We live in
an instantgratification
world:
People
want it now. "
cover
the topic, he observes.
" I don't
subscribe to the idea that this is some
kind of 'bait and switch' or mystery to
employees. "
For
schedule,
employers
the key
is
with
to
a
vesting
communicate
clearly about it with employees and potential
hires, Baker says.
" In employee meetings, we explain
vesting in a way that's simple to understand:
Vesting in the employer money is
based upon an employee's years of service
they have with the company, " she says.
" We don't get much pushback on that. "
-Judy Ward
PLANSPONSOR.COM August - September 2022 13
http://www.PLANSPONSOR.COM
PLANSPONSOR - August - September 2022

Table of Contents for the Digital Edition of PLANSPONSOR - August - September 2022
