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Presented by:
Alan Pfeffer, QPA, AIF®
Lisa Jones, Esq., CPC
Best Practices, Trends & Cutting Edge in Retirement P lans
New York
Lunch & Learn 20
19
Financial planning and investment education and advice are offered through Sentinel Pension
Advisors, Inc. (SPA), an SEC registered investment advisor. Investment brokerage services offered
through Sentinel Securities, Inc. (SSI). Member FINRA & SIPC. Sentinel Benefits & Financial Group
is the brand name for the Sentinel family of companies, which includes SPA and SSI.
Best Practices For ERISA P lans Today • Prevalence of 401(k) Plans: 90%, regardless of plan size
• Prevalence of Roth: 72%!
• Prevalence of Profit Sharing Plans: about 20%
• Prevalence of Non Qualified Deferred Compensation Plans: about 7%
(much more prevalent for large companies)
• Prevalence of Defined Benefit Pension Plans: about 2%
(again the bigger the company the more prevalent)
• Safe Harbor Plans: 54% (Match of 4% or 3% Non-Elective)
• Prevalence of loans: 91%
• Percentage if participants that have loans: 13%
• Prevalence of In-Service Distributions: 86% of plans allow for Hardship Distributions
(Source - 2019 Defined Contribution Plan Report) - Plan Design
Best Practices For ERISA P lans Today
• Auto-Enrollment: 73% of plans
• Auto-Increase: 37% of plans
• TDFs as the Default Investment Option: 75%
• Most common default rate for auto-enroll: 3% (40% of plans)
• Most common escalation rate: 1% (70% of plans)
• Average participation rate of employees: 80%
• Average account balance: $102,000 ($5,000/year for 20 years; really ?)
• Average rate of contribution: 6.8%
(Source - 2019 Defined Contribution Plan Report) - Plan Design
Best Practices For ERISA P lans Today
• Prevalence of match: 76%
• Most common match: 100% on 3% (36% of plans) and 50% on 6% (31% of plans)
• When is the match received? 80% of plans immediate eligibility
• Employees that take full advantage of the match: 26%
• Total Employer Contribution: 3%-4% (34% of plans)
• Most common vesting schedule: Immediate on enrollment (36% of plans)
• Most common use of forfeitures: Reduce employer contributions (27%)
(Source - 2019 Defined Contribution Plan Report) - The Match
Best Practices For ERISA P lans Today
• Most common type of investment vehicles: Mutual Funds: 94%
• Prevalence of Target Date Funds: 81% of Plans
• Number of investment options: 25
• Number of investment options held by participants: 5.5
• Semi- annual Plan Committee Meetings/Quarterly Reporting: 62% of plans
• Most common way for Sponsors to help participants manage retirement income - Systematic
withdrawal: 45%, In-plan professional help - 27%
• Percentage of plans that use funds that have Revenue Sharing in funds? 43% unsure, 32% yes,
25% no
• A Fee Equalization Policy : 32% yes; 16% no will develop soon
(Source- 2019 Defined Contribution Plan Report) - Investments
Best Practices For ERISA P lans Today
• ERISA Revenue Recapture Account: 49%, yes
• Who pays the fees? 51% plan participants; 34% Employer; 15% both
• Benchmarking fees: Yes, 46%
• Engage With Investment Fiduciary: 53 % of plans have; 34% unsure
• Investment advice to participants: 80%, yes
• Open-Architecture Fund Platform: Don’t care what the % is must do
• Investment Policy Statement: Don’t care what the % is must do
• Memorialize Meetings: Don’t care what the % is must do
(Source- 2019 Defined Contribution Plan Report) - Investments
Best Practices For ERISA P lans Today
• Investment Committee: Yes, 78% (have to have)
• Investment Policy Statement: Yes, 69%
• IPS that addresses TDFs: Yes, 56% (have to have)
• 3(16) Plan Administrator Services: 53% (wow!)
• Most employees will achieve their retirement goals: 21% (what do we do?)
• Responsibility to improve the “financial wellness” of employees: 60%
• Gauges of success of retirement plan: participation rates 72%; deferral rates 58%; saving to
the match 23%
(Source – 2019 Defined Contribution Plan Report) - Oversight/Governance
Big Topics/ Industry Trends
• “Retirement Readiness” encourages employers to help their employees look at their retirement
account balances and help them determine if they are saving enough for a successful retirement
(we know for the most part that they’re not).
• “Financial Wellness” looks at employee/participants health, not just from the standpoint of their
wealth (which is a one-dimensional look) but from the Health & Welfare needs as well, thus giving
a more complete view of the employee.
• Roth feature: is gaining ground because of low tax rates. There’s been a initiative to help
employees figure out whether they should save on a “pre-tax” or “post-tax” basis. Very important
to know what to do here now that we have both options.
• Annuity Options: as people are living longer and as account balances are lower than they need
to be, Plan Sponsors are looking to provide distribution options that people can’t outlive
• Cybersecurity/Data Security: there are trillions of $’s in retirement plans and data is considered
a “plan asset”. How is this being protected?
• The ERISA litigation environment: is very active and has focused in on Plan Committees for
breach of Fiduciary duty because of issues regarding Share class, Revenue Sharing,
compensation to Record Keepers and other service providers.
ERISA Litigation - Background
• In 2006 and 2007 Schlichter Bogard & Denton filed 18 class action lawsuits
against 18 of the largest U.S. Corporations alleging breach of fiduciary duty.
In 2015 and 2016 at least 20 more cases were filed including suits against
large universities, (Duke, Penn, Emory, Northwestern, Vanderbilt, John
Hopkins, Cornell, USC, MIT, NYU and Yale)
• The suits contained allegations of excessive fees, imprudent investment
options, too many investment options, inadequate participant disclosure,
use of actively managed funds vs index funds, fees exceeding industry
benchmarks, inadequate participant disclosure, failure to properly oversee
and monitor the plans and failure to routinely conduct RFPs
ERISA Litigation - What We Have Learned ?
• Overall the last year was a good year
• No need to have an RFP every 3-5 years. ERISA contains no such
requirements
• ERISA also contains no limit on the number of funds a plan should
have
• If a Sponsor uses outside expertise (a registered investment
advisor), that helps evaluate fees on a regular documented basis
that works
ERISA Litigation - What We Have Learned ?
• Courts are using reasonable judgement and if plan sponsors can
document a prudent process. Sponsor doesn’t have to be perfect or
even right.
• Court found underperformance happens . The court would not
second guess the Plan Sponsor, as long as they could document a
prudent process. The Court said that the investment strategy and
fund information was disclosed and participants had the opportunity
to invest in other funds.
• Disclosure and due diligence protects.
ERISA Litigation - Not Going Away
• It takes one unhappy participant. The attorneys are actively looking
for participants
• Sponsors may be very confident that they are correct but the
decisions aren’t uniform, the results vary from jurisdiction to
jurisdiction, Companies don’t want their executives and committee
members being sued so companies will settle
• Attorneys get 1/3 of the settlement
Big Topics/ Industry Trends - C ol lege Tuition Debt
• College degrees are common place today
• College Tuition Debt is a bubble equal to the “housing crisis”
• Tuition increases are rising faster than inflation
• This debt effects not only Millennial's and “Zs” but the Boomer (the parents)
• This debt is effecting saving rates for the US and retirement Plan savings
• This debt is delaying Millennial's and “Z’s” renting and buying housing
• This debt is creating tremendous financial and emotional stress for all involved
• Retirement accounts contain participant’s largest assets outside of their homes
• Can we incent payment of tuition debt through our retirement plans?
Retirement Plans’ Role In Paying Down Student Debt:
Using Your 401k to help with Student Loan Debt
• The IRS issued a Private Letter Ruling on May 22, 2018 allowing an employer,
believed to be Abbott Labs, to amend their 401k plan to offer a student loan benefit program
which would allow the employer to make a non-elective (NE) PS type contribution for
employees with student loan debt. Technically a PLR only applies to the firm to which it is
issued but it does indicate that the IRS does not have an issue with this idea
• Provisions of the PLR:
– an employee must elect to enroll and may opt out of enrollment on a prospective basis
– an employee participating in the program can still make elective contributions to the plan but would
not receive a match
– If an employee makes a student loan repayment during a pay period equal to at least 2%, the
employer will make a 5% NE contribution, it is not a match for that pay period. The NE contribution
is made whether the employee makes any deferrals during the year
– If the employee does not make a student loan repayment for a pay period equal to at least 2% of the
employee’s eligible compensation, but does make an elective contribution during that pay period
equal to at least 2% of the employee’s eligible compensation for that pay period, then employer will
make a matching contribution equal to 5% of the employee’s eligible compensation for that pay
period
Using 401k to help participants with Student Loan Debt
• A bill has been introduced that would allow all employers to make a
contribution to the 401(k), 403(b) and SIMPLE IRA accounts of employees
that are paying down student loan debt effective in 2020
• What you can do now to help employees?
– You can make the same type of Employer Profit Sharing Contribution
mentioned in the PLR. If you have a new comparability profit sharing formula
that puts all employee participants in their own group. Most of the
participants that have student debt are going to be non-highly compensated
employees. (NHCEs) In a new comparability plan you can decide on a
different contribution for each employee as long as you can pass discrimination
testing. Additional contributions for NHCEs are not going to cause you to fail
discrimination testing
Questions?
Thank you for joining us!
Speaker Bios
Alan Pfeffer Senior Vice President
Tel: 516.414.8311 | [email protected]
Alan has been an Employee Benefits Consultant for both profit and not-for-profit businesses for more than
thirty years. He joined Sentinel Benefits & Financial Group in 2011 as part of the merger with Geller Group,
where he acted as Managing Director.
Alan’s area of focus has been in the design, implementation, communication, and administration of qualified and
non-qualified retirement plans. His expertise also includes evaluating the effectiveness of retirement plan
investments, and he is a senior member of the Sentinel Pension Advisors RIA team.
He has obtained the designation of Accredited Investment Fiduciary (AIF®), the Qualified Pension
Administrator (QPA) from the American Society of Pension Professionals & Actuaries. and FINRA Series 6, 63
and 65 securities licenses.
Speaker Bios
Lisa Jones, Esq., CPC, QPA Senior Vice President,
Tel: 516.414.8338 | [email protected]
Lisa’s new role involves using her technical knowledge to help retirement plan sponsors minimize their
fiduciary risk through better plan investments and improved retirement plan recordkeeping/TPA
services. Prior to April 1, 2019 Lisa was in charge of our ERISA Consulting Group and was responsible
for internal and external technical support and compliance regarding ERISA and the Internal Revenue Code.
Her department helped clients resolve operational and document errors before they were discovered on
audit through use of the IRS and DOL correction programs, and helped clients with IRS and DOL plan audits.
In addition, her group was responsible for retirement plan documents for both qualified and nonqualified plans.
She regularly makes presentations internally and to clients and conducts continuing education workshops for
industry professionals on employee benefit related topics
Presented by:
Gregory Feigenbaum,
VP & Senior Benefits Consultant
From A to (Gen) Z
Managing a multi-generational workforce
New York
Lunch & Learn 20
19
Agenda
The Different Generations
Workforce Statistics
The Obstacles They Present
Who They Are
The Benefits
Tips
The Generations
The Silent Generation
1928 – 1945
Baby Boomers
1946 – 1964
Gen X
1965 – 1980
Millennials (Gen Y)
1981 – 1998
Gen Z
1998+
Workforce Presence :
5% 25% 33% 35% 2%
Statistics In the Workforce
• 56 Million Millennials
• 53 Million Gen X
• 41 Million boomers
• 9 Million Gen Z
• 3 Million Silent Generation Millennials
35%
Gen X 33%
Boomers 25%
Silent 5%
Gen Z 2%
In 2019, the youngest Boomers are 55
and the oldest Boomers are 70!
Benefit Obstacles
• Company culture
• Communication styles
• Negative stereotypes
• Loss of knowledge and experience
• Delivery Issues
• Cultural expectations
C onfusion between “generation” and “life-stage”
“Differences can be masked as age-related, so something that
might seem age-related isn't necessarily. A lot of the age issues
aren't with a company being uncomfortable with a particular age-
group, but with particular people in an age-group not being
comfortable with the company.”
— Kabir Shahani, Appature
IN THEIR
LIFETIMES
WHAT THEY’RE
LOOKING FOR
TECHNOLOGY
GRADE
HOW TO SPOT
THEM
PREFERRED
COMMUNICATIO
N CHANNELS
BENEFIT
CONCERNS
• WWII
• Great Depression
• Advent of rock n’
roll, TV, kitchen
appliannces
• Mass production
(automobiles)
Ways to stay active
in retirement
Lived through massive
advancements in
communication
Household budgets,
family mementos
• Face-to-Face
• Landline telephone
• Written
correspondence
• Medicare
• Retirement
continuation
• LTC
• The Cold War
• Post-War Boom
• Woodstock
• Apollo Moon
Landings
• Civil Rights
Movement
A profitable ‘first’
semi-retirement
Early information
technology adopters
Television, AM/FM
radio, physical
newspaper and
magazines
• Landline telephone
• Mobile phones
• Looking for rich
retirement plans
• Medicare
discussion
• Caring for
parents
• College expenses
• End of Cold War
• Fall of Berlin Wall
• Dot com Boom (and
bust)
• Integration of mobile
phones into everyday
life
Work-life balance Digital immigrants
Personal computer,
‘old school’ video
games, wearable health
tech, satellite radio
• Retirement
planning
• College funding
• Family focus
• Caring for
parents
• 9/11 attacks
• Rise of
Playstation/Xbox
• Birth of social media
• Reality TV
• Google Earth
Freedom and
flexibility
Digital natives; mobile
phone and social
media’s earliest
enthusiasts
High end mobile
devices for
personal/professional
use, jeans and sneakers
in the workplace
• SMS
• Instant message
• Mobile phone calls
• College debt
• Modest
retirement
planning
• HDHP medical
plans
• Touchscreen mobile
devices
• Energy, economic,
environmental crisis
• Social media
• Cloud computing
A bright future
Technophiles raised
in wireless, social, and
always connected
world
Smartphones, digital
school work,
Artificial intelligence
(Alexa),
Wearable tech (Google
Glass)
• SMS
• Social media
• Wearable tech
• Getting hired
• College debt
• Little medical
Concerns (on
parents’ plans)
The Silent
Generation
Baby
Boomers
Gen
X
Millennials
(Gen Y)
Gen
Z
The Newest Generation in the Workforce: Gen Z
Work-Life Balance Structured Flextime
Telecommuting
Health Prioritization
High Touch, High Tech Communication through
face-to-face meetings
Supportive Leadership
Technology as a necessity, not a bonus
Embracing a Multi-Generational Workforce
• A multi-generational workforce can create a vibrant company culture
– Each generation has varying upbringings, values, and interests that bring something different to the
workplace
• Many companies see a multi-generational mix as an opportunity to benefit from a
diversity of attitudes and skill sets
– Baby Boomers bring deep experience, creditability and wisdom
– Baby Boomers have traditional business skills, these include having exceptional interpersonal skills
and perform well in environments where traditional in-person communication is used.
– Gen X brings versatility and has the ability to bridge the gap between Baby Boomers and Millennials
– Gen X and Millennials tend to be better with technology and can offer insight into what products or
services your customers may want or need
– Millennials bring fresh ideas and a perspective not clouded by “the way things have always been done”
• Employees themselves can benefit from working with people of varying ages.
Employees are forced to step out of their comfort zones and begin to collaborate
with colleagues from all stages of life.
No one-size-benefit style f its al l
Leading a multi-generational team means that
you are managing people at different life stages
with different needs and expectations. It’s
important for managers to know and
understand these differences to successfully
manage their team.
The most important thing in a multi-
generational workplace is to make sure every
generation is valued and understood.
Tips on retaining & recruiting employees
Benefits EEs are looking for
Flexible work arrangements
Work From Home programs
Job Sharing
Unlimited PTO Programs
Sabbatical Programs
Career pathing – sharpening the saw
Get to know your employees on a personal level
Flexibility:
A survey by Flexjobs.com show that 82% of Millennials and
81% of Gen X site work life balance as a top factor when
considering a new job.
Creating flexible work arrangements can be helpful to all
generation at their different life stages. Also, having a culture
that truly supports work flex and work life balance.
Companies should consider:
• Flexible work arrangements
• Work From Home programs
• Job Sharing
• Unlimited PTO Programs
• Sabbatical Programs
Companies need to create a workplace that is open and flexible to different
ways of working and work attitudes. Companies should also consider
moving away from a “conventional work hours” module and start focusing
more on the end work product.
C ommunication:
• As different generations bring different
expectations to the office, frequent feedback,
evaluation and encouragement will be increasingly
important for managers to implement as part of
their daily work routines.
• Managers should focus on getting to know their
employee as a whole. Understanding what people
value and what motivates them makes it much
easier to communicate job expectations, offer the
right type of support, or even make adjustments
that will better suit a team's performance.
This is the first time that so many different generations are working side by
side, and it’s important that managers understand the different working
styles, attitudes, and expectations of their employees.
Training:
• Management Training: This is an opportunity to
educate and address the needs of all ages within the
workplace. It’s important for management to
understand the differences and work on being
adaptability to their workforce needs.
• Team-Building Exercises: These are a great way
to bring employees of different generations together
face to face, and can help break down some of the
barriers and miscommunications that might occur
during their daily work routines.
This is an opportunity to coach and train your managers, and break down the
barriers for employees on generational stereotypes.
Development :
• Millennials are likely to value training and new experiences and opportunities
• Gen X’s with young families are more focused on salaries and advancement
• Baby Boomers are less likely interested in new training, but they still value engaging work to keep them motivated
It’s more important than ever for managers to be aware of their employee’s
development needs and desires to make sure they are meeting the needs
for all generations.
Development C ontinued…
• Mentoring Opportunities: Have the more experienced generations of
employees act as career mentors for the younger generation, while at the same
time creating an environment where younger generations can inspire the older
workers with new innovative solutions and ways of working.
• Performance Management: Understanding what people value and what
motivates them makes it much easier to communicate job expectations, offer the
right type of support or even make adjustments that will better suit a team's
performance.
– Annual Performance Management Systems do not help nurture employees. Consider moving
to real-time feedback process. This allows managers to be more in tune with their employee’s
success and needs for support.
Questions?
Speaker Bio
Gregory Feigenbaum Vice President, Senior Employee Benefits Consultant
Tel: 516.414.8584 | [email protected]
Greg joined Sentinel Benefits & Financial Group in 2015. He has over seventeen years of experience working
for/with insurance carriers and agencies and has been a trusted advisor and consultant to clients for all of their
group insurance needs. Greg specializes in the design, implementation, communication and administration of all
types of benefit plans (including medical, dental and other ancillary benefits) and is responsible for developing
custom plans to meet the needs and expectations of his clients and their employees. Greg has also help guide
his clients through the employer requirements the Affordable Care Act and ERISA. He has worked with
employers ranging in size up to 2,000 employees. Leaning on his carrier experience, he brings a unique
approach to find benefit solutions for his clients.