June 2014
Employee Benefit Pros Should Add Medicare and Social Security To Their Knowledge Arsenal - Part 2 (Social Security)
June 23, 2014
In Part I of this two-part series I discussed the importance of understanding Medicare program basics. In Part II, I will discuss how equally important it is for benefit pros to have a good understanding of the Social Security (SS) benefits program.
Unlike with Medicare employees generally don't think they need assistance understanding how Social Security works and when to apply for benefits. The reality is many workers know very little about the SS program. For example, a significant number think that the SS taxes they pay fund their specific benefits. And many do not know their SS full retirement age and that they receive a smaller benefit amount when they elect to receive benefits before normal retirement.
Employers play a large role in financing SS benefits. It is in their best interest to help workers get the maximum SS benefit so they retire when they want, not when they can.
Social Security 101 For Benefit Pros
The federal Social Security program is complicated. There are SS experts with decades of experience that don’t know everything there is to know about SS. No one expects employee benefit pros to know as much as a SS expert dedicated to the field, but the top benefit pros will have a complete understanding of these five basic SS features. Continue Reading...
Comments
Employee Benefit Pros Should Add Medicare and Social Security To Their Knowledge Arsenal - Part 1 (Medicare)
June 20, 2014
Many employee benefit professionals working in the private sector know little about the federal Medicare and Social Security (SS) programs. This is probably true of public sector and not-for-profit pros too... And that's unfortunate because employees have a lot of questions about both programs. They see deductions from their pay for these programs and assume HR can provide answers to their Medicare and SS questions. They quickly learn that they are on their own in navigating these benefit programs that seem an extension of what their employer currently provides.
Of course it is not the employer's job to counsel employees on their Medicare and SS options but why not help provide a basic understanding of the programs. If the concern is legal liability, don't give advice. If the concern is fear of providing the wrong information, make sure you know what you are talking about before you open your mouth and always include a verbal or written disclaimer. And if the concern is that Medicare and SS benefits are not your area of expertise, don't claim that it is and study up.
Medicare 101 For Benefit Pros
Benefit pros don't need to know everything about Medicare, but they should have a very good understanding of these five basic Medicare features. Continue Reading...
Workplace Retirement Plans – Exposing Fees, Finally
June 11, 2014
I have a confession to make. After years and years of discussing retirement plan features with new and old employees, I never once spoke of plan fees. Not during new hire benefits orientations, one-on-one information sessions, or group training sessions. I never even had a conversation about retirement plan fees with an employee benefit colleague, my supervisor, or the Chief Financial Officer (CFO). I did once have a conversation over dinner about plan fees with a third party administrator trying to get our company's business.
I'm making this confession because it wasn't until a few years ago that I realized the poor service I was providing in this area to employees. I considered fees in my own portfolio but I never once in my career thought of incorporating fee information into my discussions with employees. But all of that changed when the U.S. Department of Labor (DOL) passed regulation 408(b)(2) mandating annual fee disclosure notices for employees participating in workplace 401(k)-style retirement plans. And now retirement plan fees are all I want to talk about. For me, it is the biggest game-changer in workplace retirement plan administration and education.
What is Fee Disclosure?
DOL Regulation 408(b)(2) amends the Employee Retirement Income Security Act (ERISA) of 1974. It requires covered service providers (e.g., third party administrators and their subcontractors) to retirement plans to reveal information about their compensation. The goal is to help plan sponsors (e.g., employers) determine if the compensation is reasonable and identify potential conflicts of interest. The regulation went into effect on July 2012. Continue Reading...
The Employee Benefit Office–How Size Can Determine How Much You Grow
June 09, 2014
Does size of the company matter when it comes to choosing an employee benefits job. Choose a small organization and you may find yourself doing everything. Choose a large one and you may find yourself bored stiff. What size benefit office should you choose depends on your likes, dislikes, strengths, weaknesses, and career goals. Both have pros and cons, and it is important to explore them before you say, "yes" to a job offer.
The number of employees an organization has may not always dictate the size of the benefit staff. I worked for two different organizations with about the same number of employees, one had two and a half (2.5) benefit personnel and the other had eight (8). And the one with 8 staff members relied more on outside benefit consultants to assist with compliance than the one with just 2.5 members. However, in general, the smaller the organization you work for, the smaller the benefit staff. In some cases there is no dedicated benefit staff member but rather an HR generalist performing this role along with other duties. Larger organizations usually have several dedicated full-time benefit staff members.
Pros and Cons of Working in a Small Benefits Office
Let's start with the Pros:
- More opportunities to learn all aspects of the employee benefit function
- More opportunities to increase your problem solving, negotiation and communication skills
- More opportunities to be creative
- Fewer personalities (other benefit staff) to deal with
- Fewer layers of review and approval of work
Working With Salary Information Can Drive You Crazy
June 02, 2014
As an employee benefit professional you have access to your organization's salary data. You will use this data to prepare compensation and benefits statements, perform nondiscrimination testing, determine life insurance costs and more. Having this information is an essential part of your job, but knowing it can cause you problems.
Every benefit professional struggles with knowing how much his or her colleagues make. We make judgment calls about who deserves to make a certain salary. And we make these judgments based on what we think we should make in relation to every other employee. You see we benefits professionals usually have at least a Bachelor’s degree and good technical skills. And we think we are as intelligent and capable, if not more, than anyone else. So to see others who we do not consider as bright make so much more than we do, can have a negative effect, if we let it.
How Not To Lose Your Head Over Salaries
Not all benefit professionals lose their minds when evaluating employee salary data. Those who do not, do the following and so should you:
Continue Reading...
Denise Perkins
