Workplace Financial Wellness Programs Increase Employee Retention
John Hancock’s newest 2022 annual report, “Retirement Stress, Finances, and Well-Being,” found that financial wellness programs can encourage employees to stay with an employer.
The opportunity for employers to help their workforce secure their financial future is a potential mitigating factor for the Great Resignation (precipitated by COVID) and a means to improve recruitment and retention strategies.
The study also found:
- 74% of respondents said financial wellness tools reduce stress.
- 89% say it is important for employers to provide financial wellness programs.
- 66% said having access to financial wellness programs would make them more likely to stay with an employer.
Workers also want ongoing help from employers with recommendations on Social Security strategies, help forecasting retirement income, access to expertise on estate planning, opening an emergency savings account, and education savings tools.
What can plan sponsors do to help?
- Contact your recordkeeper about their existing financial wellness programs and ways to promote them.
- Partner with your financial advisor to educate employees.
- Communicate regularly with employees about their financial needs.
If you’d like more ideas about helping to address participant concerns, reach out to your SRC account representative.
–Chris Oneal, President, Stones River Consulting
DOL AND LEGISLATIVE CORNER
SECURE Act 2.0 is waiting in the wings for 2022
The Securing a Strong Retirement Act (also known as the SECURE Act 2.0 has been in the works for two years (by the House Ways and Means Committee) and is awaiting approval in the Senate.
The SECURE Act 2.0 retains most of the provisions outlined in the original SECURE Act (The Setting Every Community Up for Retirement Enhancement Act passed in 2019), yet there are some pending notable provisions, including:
- Requiring all new defined contribution plans (e.g., 401(k), 403(b), and SIMPLE plans, etc.) to automatically enroll participants with at least a 3% contribution rate and increase the rate by 1% per year to at least 10%, but no more than 15%.
- Providing tax incentives to small businesses to encourage them to offer plans to their employees.
- Creating a national online database to monitor lost retirement accounts.
The mandate of automatic enrollment is significant, and while it remains widely supported by Congress, it will have real implications for small businesses.
Stones River Consulting will closely watch the movement of this legislation and keep you informed.
Important Deadlines to Remember
- 31: Forms 1099-R (Distribution for Pension, Annuities, Retirement or Profit Sharing Plans, IRAs, Insurance Contracts, etc.) must be mailed to participants to report distributions and federal income tax withholding during the prior calendar year. (Recordkeeper)
- 31: Form 945 (reporting federal income tax withholding during the prior calendar year) must be filed with the IRS. However, if all withheld tax has been deposited in a timely manner to the IRS, the deadline is extended to February 10. (Recordkeeper)
- 15: Deadline to submit census to Stones River Consulting. (Plan Sponsor)
- 28: Forms 1099-R must be filed with the IRS. (Recordkeeper)
- 15: IRS deadline for processing corrective distributions due to a failed Actual Deferral Percentage (ADP) or Actual Contribution Percentage (ACP) test without the 10% excise tax. (TPA, Plan Sponsor, Recordkeeper)
- 15: For S Corps or Partnerships (with no tax return extension), employer contributions must be remitted in order to take tax deduction. (TPA, Plan Sponsor)
- 15: Deadline to adopt a profit sharing plan for 2021 for S Corps or Partnerships with no tax return extension. (TPA, Plan Sponsor)
7 Signs Your Retirement Plan Needs an Upgrade
Retirement plans can be very complex if plan sponsors don’t have the right partner by their side to help navigate the ins and outs.
Stones River Consulting created a new guide titled, 7 Signs Your Retirement Plan Needs an Upgrade, that helps plan sponsors understand:
- What the four critical areas of a retirement plan are that need to be properly managed to maintain a successful retirement plan.
- Warning signs that a plan may be in danger of falling outside of compliance.
- How to get help to maintain a compliant retirement plan that benefits both the plan sponsor and its employees.
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