風(fēng)暴后的退休計劃設(shè)計

AftertheStorm…PlanRedesign101Washington,D.C.TonyaB.Manning,FSAVicePresidentAonConsultingDonaldJ.Segal,FSASeniorVicePresidentTheSegalCompanyAftertheStorm1AftertheStorm…PlanRedesign101WhatWillBeDiscussed:ReasonsforSponsoringaDefinedBenefitPlanEmployer/EmployeeFactorstoConsiderinRedesignDesignAlternativesTransitionIssuesCommunicationMeasurement2AftertheStorm…PlanRedesign101First...3AftertheStorm…PlanRedesign101AFlashBacktothe70s4AftertheStorm…PlanRedesign101Fashion5AftertheStorm…PlanRedesign101TV6AftertheStorm…PlanRedesign101Music7AftertheStorm…PlanRedesign101Movies8AftertheStorm…PlanRedesign101Comedy9AftertheStorm…PlanRedesign101RetirementDefinedBenefitPlans10AftertheStorm…PlanRedesign101WhyWereDBPlansPopularinthe70s?FewrulesregardingDBplansProfitsharingplansnotyetcaughtfireNo401(k)StockmarketrelativelyquietFixedincomeinvestmentspopularRiskERISA11AftertheStorm…PlanRedesign101WhyEmployersTodayChoosetoSponsoraRetirementProgramCompetitionforpersonnelIncreasing“popularity”ofDCplansEmployeedemandPaternalismFavorabletaxtreatmentDBplancanserveasatoolforHR(ERWs)12AftertheStorm…PlanRedesign101WhyPlanSponsorsAreLookingtoRedesignTheirProgramsDBplanwoes:CashfundingrequirementsEffectonincomestatementandbalancesheetVolatility13AftertheStorm…PlanRedesign101WhyPlanSponsorsAreLookingtoRedesignTheirProgramsHistoricalExpenseforPensionPlan14AftertheStorm…PlanRedesign101WhyPlanSponsorsAreLookingtoRedesignTheirProgramsPerceivedlackofappreciationbyemployeesPressuretogrowshareholdervalueCompany’sshorttermvs.longtermoutlook‘Trendy’15AftertheStorm…PlanRedesign101WhyPlanSponsorsAreLookingtoRedesignTheirProgramsDeclineinDCequitybalancesEmployeesarenotsaving(oraresavingless)Employees/recruitsareagingNeedto‘phaseout’olderemployeesvs.Needto‘phasein’olderemployeesEmployeesmoremobile/lessloyal16AftertheStorm…PlanRedesign101FactorstoConsiderintheRedesignProcessFinanceperspectiveCashrequirementEffectonfinancialstatementsAdministrativeexpensesVolatilityRiskCostobjectivesMoreCostneutralSavingsAffordability17AftertheStorm…PlanRedesign101FactorstoConsiderintheRedesignProcessHRperspectiveGoalsofprogramHowtouseyour401(k)planasatrueemployeemotivationdeviceBySuzanneThompson,ChFCEmployeemoraleCompetitorsAttraction/RetentionFuture(desired)structureofworkforce18AftertheStorm…PlanRedesign101FactorstoConsiderintheRedesignProcessPaternalismEmployees’savingsrate(currentandpotential)AdequacyofprogramWho‘deserves’fullretirementbenefits19AftertheStorm…PlanRedesign101FactorstoConsiderintheRedesignProcessOrphanismAdministrationpressingtowardpersonalaccountabilitywithproposedsavingsaccountsIndividualSocialSecurityaccountsagainbeingdiscussed20AftertheStorm…PlanRedesign101FactorstoConsiderintheRedesignProcessDemographicsAgeofworkforcepopulationAverageyearsofservice(actualanddesired)NumberofemployeesnearretirementIncreasedlongevityInvestmentsavvyofemployeesCompensationlevelofemployeesLow-paidlesslikelytosave?High-paidneedsupplementalbenefit?21AftertheStorm…PlanRedesign101FactorstoConsiderintheRedesignProcessTimingHealthofthecompanyHealthofeconomy/jobmarketSimultaneousbenefitimprovements/cutbacksAnyCo.StockPrice22AftertheStorm…PlanRedesign101FactorstoConsiderintheRedesignProcessQuestionsRegardingSocialSecurityConsideritinadequacyassessment?(Willitsurvive?)Whatwillitbe?Shouldbenefitsbeintegrated?23AftertheStorm…PlanRedesign101DesignAlternativesNoProgramDBonlyFinalAveragePayCurrentPayUnitAccrual(‘careeraverage’)Hybridplan(cashbalance,PEP,etc.)AdvantagesofeachdesignRegulatoryuncertainty24AftertheStorm…PlanRedesign101DesignAlternativesDCOnlyTargetProfitsharingcontributionSetpercentageDiscretionaryMoneypurchaseplan(why?)25AftertheStorm…PlanRedesign101DesignAlternativesDCOnly(continued)SavingswithoutmatchSavingsandmatchFlatmatchformulaMatchvarieswithageand/orserviceMatchvarieswithplansponsor’sperformanceSafeharbordesignAdvantagesanddisadvantages26AftertheStorm…PlanRedesign101DesignAlternativesBothDBandDCVarytypeofplanofferedbasedontypeofjobOfferbothtypestoallemployeesDBplanissecondary(usedasasafety-net)DCplanissecondary(tosupplementDBplan)27AftertheStorm…PlanRedesign101TransitionIssues-PhasingOutDBPlanHowtodoitCloseparticipationFreezeaccrualAllparticipants/partialparticipantsServiceonlyTerminateChoice 28AftertheStorm…PlanRedesign101TransitionIssues-PhasingOutDBPlanPossibledoubleuponcostGrandfatheringClosingparticipationAdministrationMultipleplansComplextransitionsNondiscriminationtestingRemovehighlycompensatedAddbacknonhighlycompensatedDBDC29AftertheStorm…PlanRedesign101TransitionIssues-PhasingOutDBPlanGrandfatherCostHowtodoit(continueinDBorgetthebetterofthetwo)LegalissuesLawsuitpotential‘Haves’and‘HaveNots’dichotomyofworkforceEncouragingsavings(especiallyifnotpreviouslyrequired)30AftertheStorm…PlanRedesign101TransitionIssues-PhasingOutDBPlanCOMMUNICATIONCrucialAdditionalitemsnowrequiredMorechangesmeansgreaterneedforEFFECTIVEcommunicationChoiceisDEPENDENToneffectivenessofcommunication