PLANSPONSOR - November - December 2023 - 29

September 2023
024 Retirement Plan
dministration
the surviving spouse of an employee
will be " treated like the employee, going
forward for the purpose of the distribution, "
Ellis said. That allows the spouse
to take distributions from the plan, vs. as
a lump sum.
There are also several " optional "
ROADMAP
provisions that, whether plan sponsors
are ready to implement them or not,
should be discussed. These
according to Ellis:
* An emergency savings program
that could allow for saving, after taxes, up
to $2,500 for withdrawal in an emergency.
" It's a linked account; it's treated a little
more like a Roth, " Ellis said. But it is still
unclear how those will be administered,
what the burden may be on the plan sponsors
to administer them and what additional
cost may result if they are built into
or linked to the retirement plan.
* An emergency withdrawal feature
that will enable participants to take up
to $1,000 from retirement savings by
self-certifying that it is for an emergency.
There are no penalties or taxes on
the withdrawal, so long as it is paid back
within three years.
* An increase in the amount participants
may withdraw if leaving the plan.
Currently they may take up to $5,000,
meaning any account with a balance below
that may be removed. In 2024, it increases
to $7,000. This provision can help if small
accounts are a " drag on your overall plan "
if you have a lot of turnover, Ellis said.
* Finally, there is an allowance for
participants who have been a victim of
domestic abuse to make a hardship withdrawal
from their retirement plan without
penalty. -Alex Ortolani
The Financial
Security Journey
While there is no blanket solution for
achieving financial wellness, advisers can
recommend creating a metric for success,
celebrating small wins and offering
consistent communication, experts said
at the livestream.
To identify plan priorities, Jake
include,
Spiegel, a research associate at the
Employee Benefit Research Institute, said
considering participants' wide array of
backgrounds must be part of the solution.
" We all have identities that are as
unique as our own fingerprints, " Spiegel
said. " So there's not going to be a onesize-fits-all
solution. "
He provided the example of a participant
population that might seem homogenous,
such as a tech company, where
everyone is relatively young and highly
compensated. Yet, one worker might
have to care for an elder family member,
another might have huge student debt
and another might have a child with
special needs.
The right benefits to include in a plan
will depend on how a company defines
success, Spiegel said. From his observation,
many employers want to create
financial wellness metrics and use them
to direct more resources toward successful
projects. Measurements might be: " 'Do
people participate in this program?' 'Do
we increase retention this way?' " he said.
" There's a huge appetite for employers to
develop these sorts of metrics and justify
their financial spending. "
Monica De Agostino, manager of benefits,
compensation and human resources
information systems at MRIGlobal, said
" Complexity leads to inertia, and when
we're talking about financial wellness,
we're dealing with human behavior.
Changing behavior is a long-term gig. "
she believes in celebrating the minor wins.
" Complexity leads to inertia, and
when we're talking about financial wellness,
we're dealing with human behavior, "
De Agostino said. " Changing behavior is
a long-term gig. Especially in the beginning,
accomplishments will feel small,
the milestones can fade in and out very
quickly. It can feel like [you] weren't really
making any progress, but you actually are
in creating that conversation. "
Small wins can lead to better
outcomes for employees, De Agostino
continued. In 2021, the MRIGlobal HR
committee met to look at securing retirement
for the firm's 450 employees.
" We had a couple of different
plans, " she said. " We had a matching
and a nonmatching contribution. The
nonmatching contribution was a complicated
formula. I said, 'We have to explain it
in 10 seconds or less, or it loses momentum
again or actually leads to inertia.' That's
how we came up with the 100% dollar-fordollar
formula and focused on the match. "
The committee put its dollars into
the match, rolled the solution out and
immediately saw contributions rise. Older
employees advised the younger to jump in
on the match, and the participation rate
peaked at 98%. Further, the project ended
up being budget-neutral.
" To this day, we have high savings
rates, " she said. " People really enjoy, at
least in our population, the match. "
Jeff Petrone, managing director
at SageView Advisory Group, said the
across-the-board programs that are most
successful have had " champions " such as
De Agostino who drive the initiatives for
their employer.
" [They] want those initiatives to be
successful; [they] spend the time to craft
a communication plan that's not just
once a year but is continually reaching the
employees to make them aware of those
resources, " Petrone said. " They're working
department by department, division by
division, sending things out to employees
throughout the year. " -Natalie Lin
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