benchmarking survey - aronson llc · 2020. 2. 10. · 3rd annual employee benefit plan benchmarking...
TRANSCRIPT
BENCHMARKING SURVEY
HOW DOES YOUR BENEFIT PLAN STACK UP AGAINST OTHERS?
INTRODUCTIONAronson’s Employee Benefit Plan Services Group is proud to announce the results of its 3rd Annual Benefit Plan
Survey. The survey is designed to help employers get a better understanding of the overall benefits landscape. Its
release comes at a critical time for employers. Employers across all industries are struggling to meet the needs of
very different employee populations in an effort to recruit and retain top talent. There is great uncertainty with the
direction of healthcare after several years of significant premium increases and many dollars spent to meet the many
compliance requirements set‐forth by the Affordable Care Act (ACA). With any change in the White House comes
a certain level of caution and this time is no different. New efforts are made every day to come up with innovative
ideas to keep employees happy and productive. The challenge is to balance the cost of these ideas with the benefits
they produce.
Our survey spans the industries that are representative of the Washington, DC Metropolitan marketplace and is
designed to help employers gain a better understanding of some of the benefits being provided by their peers and
the associated challenges in doing so.
The race to keep the best and brightest is highly competitive and no employer wants to be left behind! Although this is primarily a tool for your benchmarking purposes, as you review the information it may give rise to questions. Please feel free to reach out to Aronson for answers and potential solutions.
Aronson’s Employee Benefit Plan Services Group is a team of experienced benefit plan auditors and consultants
who help clients get the most out of their plan in consideration of the current regulatory framework. Whether
you need a benefit plan auditor or somebody to help you design and implement a cost effective plan, we are here
to support your business goals and provide guidance before, during and after the engagement. With a strong
commitment to personal service and attention, Aronson’s Employee Benefit Plan Services Group offers custom
solutions for your unique business. Please call us at 301.231.6200 for more information regarding the survey
results or the services we offer.
3rd Annual Employee Benefit Plan Benchmarking Survey 1
WHAT STATE OR U.S. TERRITORY ARE YOU LOCATED IN?
Respondents were from 22 of the 50 states, plus the District of Columbia and Puerto Rico. Approximately
85% were from the Mid‐Atlantic region, which includes Washington, D.C., Virginia and Maryland.
SURVEY DEMOGRAPHICSWHAT INDUSTRY ARE YOU IN?
Almost 54% of the 247 respondents to the survey indicated they worked in government contracting, with the next
closest industry being nonprofit (approximately 12%). This is not surprising given that the majority of respondents
(85%) were located in the DC/MD/VA area, and these are two of the region’s most prevalent industries. The
majority of the respondents in the "other" category (7%) indicated they worked in education, hospitality, automotive,
manufacturing, retail, and life sciences.
3rd Annual Employee Benefit Plan Benchmarking Survey 2
Majority
1 Response
2 Responses
3 Responses
4 Responses
7 Responses
The survey asked respondents to indicate the size of their organization and retirement plans, based on the number
of employees and plan assets. Where relevant, we have provided survey results separately for respondents with
over 100 employees and those with less than100 employees.
HOW MANY EMPLOYEES DO YOU HAVE?
WHAT IS THE APPROXIMATE SIZE OF YOUR PRIMARY RETIREMENT PLAN?
3rd Annual Employee Benefit Plan Benchmarking Survey 3
UNDER $1M
$25M - $74.9M
9%
24%
$1M - $9.9M
$75M - $199.9M
44%
2%
$10M - $24.9M
OVER $200M
6%
15%
33%1-50
51-100
101-250
251-500
501-1,000
OVER 1,000
15%
23%
14%
5%
10%
WHAT TYPE OF PLAN DO YOU HAVE?
There are two general types of retirement plans: defined benefit and defined contribution. Defined contribution
plans (e.g. 401(k) plans) establish the parameters of the contribution made to the plan. The benefit to the
participant is dependent on the contributions and the growth in the participant’s account. A defined benefit plan
(e.g. pension plan) defines the benefit the participant is entitled to receive upon retirement. The contributions to a
defined benefit plan are determined using actuarial assumptions to ensure the plan has enough funds to pay the
promised benefits.
401(k) plans permit participants to contribute pre‐tax income
to be invested for retirement. These plans typically offer
participants a choice of investments. Taxes are not paid until
funds are withdrawn.
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403(B)
ESOP
DEFINED BENEFIT
SEP/SIMPLE
*Note: Percentages exceed 100% as respondents could select all that apply.
86%
20%
10%
9%
5%
4%
401(k)
PROFIT SHARINGA profit sharing plan typically allows the company to provide
retirement benefits to employees, but does not require the
administrative burden of providing for participant deferral
contributions. Participants are often permitted to choose
their investments.
403(b) plans, which are sponsored by nonprofit organizations,
have similar features to their for‐profit counterpart, the
401(k) plan.
Employee Stock Ownership Plans (ESOPs) use plan sponsor
stock as the primary investment for employer contributions
made to the plan, thereby developing a culture of employee
ownership. ESOPs have an additional layer of complexity
and can be very costly to plan sponsors if they are not
administered properly.
Use of defined benefit plans continues to decline due to costs,
and more and more sponsors are freezing and terminating
these plans. Pension risk management strategies continue to
be at the forefront for sponsors that maintain these plans.
Simplified Employee Pensions (SEPs) and SIMPLE plans are
more basic vehicles with streamlined features that remove
much of the compliance burden found in most qualified plans.
These can be very productive options for employers with
limited administrative resources who do not need all of the
bells and whistles available with other plan types.
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PLAN GOVERNANCE & F IDUCIARY RESPONSIBIL IT IESWHO “INTERNALLY” IS ULTIMATELY RESPONSIBLE FOR THE PLAN?
DO YOU HAVE A 401K COMMITTEE, AND IF SO, HOW OFTEN DO YOU MEET?
AND WE MEET. . .
Annually ‐ 18% Semi‐annually ‐ 20% Quarterly ‐ 44% Monthly ‐ 2% As Needed ‐ 16%
Broaden the responsibility of the plan to multiple
individuals.
Of Committees
PROSOf Committees
There are only so many hours in a day...
This becomes a low priority to plan sponsors.
CONS
HR Staff 7% 24%
37%
7%
24%
1% Other/I don’t know
CEO/Owner
Controller/CFO
HR Director
Accounting Staff
50%YES 50%NO
TREND
LESS CEOS AND OWNERS TAKING RESPONSIBIL ITY OVER THE PRIOR YEAR (DOWN FROM 43%)
TREND
MORE AND MORE PLANS ARE UTIL IZ ING COMMITTEES OVER THE PRIOR YEAR (UP 11%)
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DO YOU USE AN OUTSIDE ADVISOR, AND IF SO, HOW OFTEN DO YOU MEET WITH THEM?
ARE YOU FAMILIAR WITH THE NEW DEPARTMENT OF LABOR PLAN FIDUCIARY RULES?
AND WE MEET. . .
Annually ‐ 23% Semi‐annually ‐ 23% Quarterly ‐ 30% Monthly ‐ 3% As Needed ‐ 21%
You are able to utilize the expertise of an advisor to
make sound financial choices for your employees.
Of Advisors
PROSOf Advisors
Advisors are not free. It is important to do your due
diligence to find the best one at the best price.
CONS
IF YOU ANSWERED "YES" TO THE PREVIOUS QUESTION, WHAT CHANGES ARE YOU MAKING IN YOUR ADVISOR RELATIONSHIP?
No Changes ‐ 82% Modifying Current Services/Structure ‐ 14% Changing Brokers ‐ 4%
78%YES 22%NO
71%YES 29%NO
TREND
CONSISTENT WITH PRIOR YEAR RESULTS, MOST RESPONDENTS USE AN OUTSIDE ADVISOR.
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Over the last several years, the Department of Labor (DOL) has worked to expand the definition of "investment
fiduciary." This is commonly referred to as the DOL Fiduciary Rule (the Rule). The new Rule was scheduled to
begin to go into effect on April 10, 2017. However, the current Administration has delayed its implementation
with the hopes that it is never implemented.
Under the Rule, an advisor making a recommendation or sale, as opposed to simply giving ongoing advice, would
be considered a fiduciary. Previously, only advisors charging a fee for services were deemed to be a plan fiduciary.
Such fees could be hourly or a percentage of assets, but not commissions. As a fiduciary, the DOL requires
advisors to act in the best interests of their clients. All fees must be shown in hard dollars and any conflicts of
interest disclosed. At the heart of the Rule is the fact that a fiduciary must recommend investments that are in the
client’s "best interests," not investments that are merely suitable based on various needs and objectives.
The investment industry and retirement plan sponsors alike have been preparing for these new requirements for
the last several years with many plans having already established a relationship with an advisor that meets the
fiduciary standard.
Survey results showed that just over 70% of respondents were familiar with the new Rule. It is somewhat shocking
that almost 30% of respondents were not. This could mean one of two things, the new Rule ultimately does not
impact their current relationship because their advisor met the standards already or they truly know nothing about
the Rule. The new Rule could greatly impact an employer’s relationship with their advisor, if not force them to
completely change advisors.
Of the respondents that were familiar with the new Rule, roughly 20% were currently in the process of modifying
their current service model or completely changing their advisor. It is likely that most of the other respondents
had already evaluated their advisor relationships within the context of the new Fiduciary Rule and implemented
any appropriate changes.
Regardless of the fate of the DOL’s Fiduciary Rule, all plan sponsors should demand that their advisor adhere to the two basic investment fiduciary tenets that they operate in your best interests and that your fees are properly disclosed.
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PLAN DESIGNIn this year’s survey, we asked again about your plan’s eligibility and enrollment provisions.
TREND
ELIGIBIL ITY
Immediate 45% 7%
8%
2%
22%
16% Other
After 1 Year
After 6 Months
After 1 Month
After 3 Months
If employees are allowed to participate immediately, plan sponsors must make sure
all employees are offered enrollment unless they have specifically been excluded from
participation in the document. Part‐time employees should be allowed to participate
if they meet the eligibility requirements. Be sure to monitor hours and do not just
assume the requirements have not been met just because of their part‐time status!
Failure to offer enrollment to ALL eligible participants can result in costly corrections.
Attractive benefit for new employees. No need to
track a participant’s eligibility period, which can
save administrative time.
To Immediate Eligibility Periods
PROSTo Immediate Eligibility Periods
Plan sponsors with a workforce with high turnover
may end up accumulating small balances for
numerous participants, which can increase cost
and administrative burden.
CONS
Consistent with prior year results, approximately 83% of respondents offer participants the right to contribute
within three months of their hire date, with larger employers offering enrollment earlier than smaller employers.
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In an effort to get more workers to save for retirement, many employers began adding automatic enrollment
provisions to their retirement plans several years ago. 34% of total respondents indicated they have this feature for
their plan, up from 28% in the prior year. Interestingly, the percentage for smaller plans stayed at approximately
22% while the percentage of companies with over 100 employees increased from 34% to 46%.
TREND
Increased participation which generates better
nondiscrimination testing results. Increased
number of individuals saving for retirement as
they did not need to take action to enroll.
To Automatic Enrollment
PROSTo Automatic Enrollment
Concerns that when starting rates are set too low,
participants tend to contribute at these lower rates
for longer than they should, thus not saving enough.
This can be somewhat mitigated by adoption of the
automatic escalation provisions. Increased costs to
the employer, due to higher matching contributions.
Increased administrative burden to administer
the provisions.
CONS
While the majority of respondents with plans that provide for automatic enrollment still do not include an
auto escalation feature, it appears the percentage adding the automatic increase is rising. In the under 100
employee category the percentage with this feature increased slightly from 20% to 22%, while those with over
100 employees reported utilizing this feature increased from 24% to 41%.
AUTO-ENROLLMENTUNDER 100 OVER 100
AUTO ESCALATIONUNDER 100 OVER 100
YES
YES
NO
NO
NOYES
NOYESThe majority of reported
escalation rates were 1% per year, with caps varying from 6%‐15%.
22%
78%
46%
54%
22%
78%
41%
59%
6% ‐ 18%
3% ‐ 43%
5% ‐ 11%
4% ‐ 11%
2% ‐ 7%
Over 6% ‐ 5%
Unknown ‐ 3%
1% ‐ 2%
Starting Rates
3% ‐ 41%
6% ‐ 23%
Unknown ‐ 15%
1% ‐ 9%
4% ‐ 4%
5% ‐ 4%
Over 6% ‐ 4%
Starting Rates
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The following provisions give employers the most trouble when administering auto‐enrollment provisions:
• Who should be auto‐enrolled, new employees or all employees without an enrollment election? Employers often
do not know who their document specifically says must be enrolled.
• When should employees be auto‐enrolled? Some employers struggle to consistently enroll employees in a timely manner.
• Applying the automatic contribution increase often causes difficulties. Employers do not seem to have a good
process for applying auto increases in a consistent, accurate manner.
• Employers must take care to provide a uniform application of auto‐enrollment provisions.
It is important to understand the timing of the step‐up (e.g. same date for all participants,
participant’s anniversary of auto‐enrollment). Errors can result in missed deferral opportunities
and can require corrections that are less costly if certain conditions are met. The new options
were made available in an effort to make auto‐enrollment as a whole more attractive to
plan sponsors.
IS YOUR PLAN A SAFE HARBOR 401(K) PLAN?
No discrimination testing failures while providing
a great benefit to your employees.
PROS
More expensive than a discretionary contribution
plan. Is more challenging to administer, and you
are locked in to that benefit for the year.
CONS
YES 50% NO 36% ? 14%
If you choose to have a safe harbor plan, be aware that if you note such benefit in your proposals
on contracts, you will be locked in for that benefit.
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DO YOU PROVIDE A MATCHING CONTRIBUTION, AND IF SO, WHAT KIND OF MATCH AND AT WHAT FREQUENCY?
An annual contribution versus the rest ‐ An annual contribution provides options. You can add a service
requirement where the participants must be employed as of year‐end in order to receive such contributions;
however participants may feel slighted that they do not receive their match on a pay‐by‐pay basis
like their withholdings.
WHAT IS YOUR MATCH FORMULA? SOME OF THE MOST INTERESTING MATCHES NOTED ARE:
Provides flexibility to your contribution. You have
the ability to reduce the contribution in tough
profitability years.
Of Discretionary Over Fixed
PROSOf Discretionary Over Fixed
Discretionary is seen as less of a benefit by
your employees.
CONS
PAY PERIOD
MONTHLY
QUARTERLY
ANNUALLY
NONE
55%
18%
4%
4%
20%
DISCRETIONARY
FIXED
NONE
25%
55%
20%
• 50%, up to 12% of compensation
contributed garners a lot of participation
among your employees.
• 100%, up to 10% of compensation
contributed garners a lot of participation
and is very expensive.
• 100%, up to $6,000 contributed.
9%
12%
19%
20%
40%
50%, up to 6% of compensation contributed
100%, up to 4% of compensation contributed
100%, up to 3% of compensation contributed
N/A
Other
3rd Annual Employee Benefit Plan Benchmarking Survey 12
DO YOU HAVE A PROFIT SHARING CONTRIBUTION, AND IF SO, WHAT IS THE FORMULA?
DOES YOUR PLAN CONTAIN PROVISIONS FOR PREVAILING WAGE FRINGE BENEFIT CONTRIBUTIONS TO THE PLAN (I.E. SERVICE CONTRACT ACT, DAVIS BACON)?
PROFIT SHARING CONTRIBUTIONS CONTINUE TO BE THE UNPOPULAR CHOICE WITH ONLY 28% OF RESPONDENTS INCLUDING THE CONTRIBUTION IN THEIR PLAN.
IF YOU ANSWERED “YES” TO THE PREVIOUS QUESTION, DID YOU MAKE SUCH CONTRIBUTIONS TO THE PLAN?
YES
NO
A RANGE OF RESPONSES:
• Discretionary, determined by management each year
is the overwhelming response.
• As low as 1% of salary up to 25% of compensation
with the majority of the responses hovering in the
2‐3% range.
YES
NO72%
28%
14%
86%
NO
YES37%
63%
TREND
3rd Annual Employee Benefit Plan Benchmarking Survey 13
Construction contractors and subcontractors working on certain federal contracts must comply with the Davis‐
Bacon Act. This act requires these contractors to pay the laborers and mechanics employed under the contract no
less than the locally prevailing wages and fringe benefits for similar projects in the area, as set by the DOL.
Similarly, government contractors and subcontractors performing services under contracts covered by the
McNamara‐O’Hara Service Contract Act (SCA) must pay service employees in various classes no less than the
wage rates and fringe rates in the area, also set by the DOL.
Test your SCA knowledge with an Aronson blog: http://blogs.aronsonllc.com/fedpoint/2014/03/31/test-service-contract-act-knowledge/
Regardless of whether employers choose to pay cash or use bona fide fringe benefits and a
contribution to the retirement plan to meet the fringe obligation, it is critical to establish controls
over the process to ensure the obligation is properly satisfied. Some of the errors we have
seen over the years are as follows: not using the correct hours to calculate the obligation, not
updating the fringe rate when the contract has been modified to incorporate a new hourly rate,
not updating the cost of the fringe benefit when the insurance was renewed, and applying an
inappropriate fringe benefit to offset the obligation. While it is rare for these errors to result in a
material correction, given the complex nature of the calculation the opportunity for error is great.
Cost savings. The bona fide fringe benefits that
qualify to offset the obligation are often costs that
would likely be incurred regardless of whether or
not the employee is subject to a prevailing wage
obligation. Therefore the employer will not only
retain and attract employees by offering these
benefits, the costs assist in meeting the funding
obligation for prevailing wage employees. Any
excess obligation is deposited into the Plan as a
prevailing wage contribution. Because none of the
obligation was met by paying cash to the employee,
payroll taxes do not apply.
For Making Prevailing Wage Contributions
PROSFor Making Prevailing Wage Contributions
Burdensome administration. Significant time and
effort is required to calculate and administer these
contributions. The majority of our clients that make
prevailing wage contributions to the retirement plan
outsource the calculation of such contributions to
a third party provider that specializes in prevailing
wage contracts to relieve some of the burden.
The typical retirement plan third party provider is
not likely to have the expertise needed to perform
these calculations.
CONS
BONA FIDE BENEFIT Life Insurance, Health Insurance, Pension, Paid Time Off, Sick Leave
THERE IS A SLIGHT INCREASE IN RESPONDENTS THAT HAVE INCORPORATED A PREVAILING WAGE CONTRIBUTION PROVISION. OVER HALF OF THESE RESPONDENTS MAKE A PREVAILING WAGE CONTRIBUTION.
TREND
3rd Annual Employee Benefit Plan Benchmarking Survey 14
WHAT IS YOUR VESTING SCHEDULE?
For those employers that have a vesting schedule, it is important to review the process and
controls in place to ensure the proper vesting is applied to participants, even if the vested
balance is being determined by a third party provider.
Assists in attracting and retaining talented
employees. Helps to meet the condition of a safe
harbor plan.
Of Immediate Vesting Schedules
PROSOf Immediate Vesting Schedules
Costly to employers. No forfeitures available to
offset future contributions or pay plan expenses.
Removes an incentive for employees to stay until
they reach full vesting.
CONS
TRENDOur survey continues to show immediate vesting in employer contributions remains in the forefront
with approximately half of respondents providing immediate vesting to their employees.
2%
49%
15%
11%
9%
9%
5%100% vested immediately
20% per year with full vesting after 5 years
0% first year, and 20% per year with full vesting after 6 years
33% vesting per year with full vesting after 3 years
25% vesting per year with full vesting after 4 years
Cliff vesting reaching 100% vesting after 2 or 3 years
No schedule as no employer contributions allowed
WHAT IS YOUR VESTING YEARS OF SERVICE METHOD?
TRENDThe results showed a large increase in the number of employers using the elapsed time method.
Easy to administer. No requirement to track hours.
For Elapsed Time Methods
PROSFor Elapsed Time Methods
Can be costly for employers with a large
part‐time workforce.
CONS
Credit is given only when employee works
at least 1000 hours.
For Hours Methods
PROSFor Hours Methods
Tracking hours is burdensome. Higher risk
of error due to improper hours.
CONS
OTHER BENEFITSWHAT OTHER TYPE OF SUPPLEMENTAL RETIREMENT/COMPENSATION PROGRAMS DO YOU OFFER?
ANSWER OPTIONS SURVEY RESPONSE
Non‐qualified deferred compensation for upper management
Synthetic equity for selected employees
Stock options
N/A
Other
13%
2%
10%
73%
2%
3rd Annual Employee Benefit Plan Benchmarking Survey 15
Hours
Method
24% 65% 11%
Elapsed
Time Method
N/A As No Employer
Contributions Allowed
3rd Annual Employee Benefit Plan Benchmarking Survey 16
WHAT OTHER TYPES OF BENEFIT PROGRAMS DO YOU OFFER, OTHER THAN HEALTH BENEFITS?
With the economy at almost full employment, virtually all employers are being challenged to keep their best people
regardless of their position in the organization. HR departments are constantly trying to come up with creative
compensation and benefits strategies that serve both themselves and their employees. Designing arrangements
for non‐shareholder, upper management employees is particularly challenging. Our 2017 survey results reflect
an increase in the overall usage of supplemental retirement/compensation vehicles over and above the broad
based qualified plan. These arrangements are specifically designed to compensate upper management. While
the survey reflects only minimal usage of synthetic equity arrangements, we know anecdotally that these are an
ever growing strategy for attracting and retaining the top members of an organization. While our survey shows
an increase in the usage of stock option arrangements, we have generally found that these strategies are being
used less frequently. When crafting executive compensation and benefits arrangements, employers must take
great care in determining their goals. Far too often, employers start in the middle of the process by focusing on
arrangement type, tax consequences, investment product or something similar. This ultimately leads to a solution
that is not in either party’s best interest.
ANSWER OPTIONS SURVEY RESPONSE
Unlimited leave 4%
Long‐term disability insurance 89%
Short‐term disability insurance 83%
Life insurance 95%
Tuition reimbursement 67%
Long‐term care insurance 9%
Wellness program 26%
Gym membership reimbursement 19%
Pet insurance 16%
Various concierge services 8%
Developing benefit arrangements for all employees also keeps HR professionals up at night. Competitive, unique
packages are very important to employees and employers spend a lot of time and resources trying to meet this
requirement. As you can see, most employers are providing the standard benefits. What is most interesting is how
unique benefits (e.g. pet insurance) are becoming more popular. This is both a function of employers trying to
differentiate themselves as well as cater to the ever‐growing millennial workforce. Our survey reflects the wellness
trend that continues the focus on employee health that has been building for the last several years. As the impact
of tuition debt becomes greater and greater, employers and legislators alike are trying to develop employee
friendly avenues to get out from under this burden. The next wave of benefits will likely include tax favored tuition
debt repayment options.
The advent of these new benefit types reflects the extreme pressure on employers to keep their people happy and
avoid the costs associated with turnover.
*Note: Percentages exceed 100% as respondents could select all that apply.
3rd Annual Employee Benefit Plan Benchmarking Survey 17
For most employers, the most costly employee benefit is health insurance and in recent years this cost has
increased significantly. The healthcare landscape has gone through a lot of change over the last several years,
mostly due to the Affordable Care Act. Day after day, we hear about the Act’s shortcomings and negative impact
on virtually everyone involved, but oddly enough, our survey reflected 50% of respondents being in favor of not
repealing the ACA and 50% being in favor of repealing. It is unclear as to why employers would not desire a repeal
when so many healthcare people feel so strongly that it needs significant changes. Of the respondents that desire
change and indicated what type of change, there was a common theme; the administrative burden is too much,
specifically the reporting. It is next to impossible to predict what changes will or will not be made to the ACA, but
some level of reporting relief is likely.
Employers continue to use a variety of health insurance structures to meet their goals. Even so, 92% of respondents
indicated that they provide some form of fully insured benefits and 17% of those respondents do so through a
High Deductible Health Plan (HDHP) combined with a health savings account (HSA). HSAs allow employees
to accumulate tax‐free dollars that grow tax free if used for medical expenses. These plans continue to grow
in popularity as a means for employers to reduce costs and force employees to take greater responsibility for
managing their costs. It is expected that the number of these plans will continue to grow as a means to manage
costs.
In order to pass some of the premium savings on to employees, employers will often make contributions to
employees’ HSAs. Our survey showed that almost 40% of employers sponsoring HDHPs with an HSA feature
contribute greater than $1,500 to their employees’ account.
ANSWER OPTIONS SURVEY RESPONSE
Yes
No
51%
49%
ARE YOU IN FAVOR OF THE AFFORDABLE CARE ACT BEING REPEALED?
WHAT TYPES OF HEALTH INSURANCE ARRANGEMENT(S) DO YOU OFFER?
ANSWER OPTIONS SURVEY RESPONSE
Self‐funded 9%
Self‐funded/partially insured hybrid 7%
High deductible health plan with health savings accounts 16%
Fully insured 34%
Combination of the above 34%
WHAT IS YOUR BIGGEST STRUGGLE IN MANAGING YOUR PLAN(S)?
3rd Annual Employee Benefit Plan Benchmarking Survey 18
IF YOU OFFER A HIGH DEDUCTIBLE HEALTH PLAN COMBINED WITH A HEALTH SAVINGS ACCOUNT, HOW MUCH DOES THE EMPLOYER CONTRIBUTE ANNUALLY TO THE HSA PER EMPLOYEE?
None
Cost
Complexity of Rules/Compliance
Miscellaneous
Time, Resources Admin
Reporting
Employee Education
Vendor Struggles
10%
7%
4%
16%25%
30%
4% 4%
$1 - $500 $501 - $1,000
$1,001 - $1,500 OVER $1,500
13%
17%
32%
38%
Similar to last year’s results, cost containment, compliance complexity, and resource/administrative difficulties are
the primary challenges faced by employers when managing their plans. These issues all increased in popularity
this year, while fewer employers indicated that they did not have any struggles.
• Managing Costs ‐ Healthcare is by far the most costly employee benefit for employers. Premiums continue to
rise, and the time spent keeping up with the rules and reporting requirements has not really stabilized, especially
for smaller organizations. In the retirement plan space, investment fee pressure is immense.
• Complexity of Rules ‐ For years, employers have lamented the confusing nature of retirement plan rules. Even
with the assistance of outside help, employers still find it difficult to fully understand the dos and dont’s of the
typical retirement plan arrangement.
• Time and Resources ‐ As discussed above, the burden for managing these plans and ensuring they are a viable
component of an employer’s benefit strategy can be heavy. The pressure to provide robust, cost effective benefit
arrangements is ever increasing, as is the complexity and government oversight. Employers ask more and
more of their staff not directly linked to revenue generation and it is often met with resistance when additional
resources are requested to help maintain these plans.
The compliance components associated with benefits makes administering plans more difficult than ever, especially given the ACA requirements. Working with legitimate healthcare experts is key to an employer’s healthcare plan success. It is important that your advisor and associated support team have the knowledge to navigate these complexities and bring solutions to the table. Additionally, employers need to be sure they are working with a provider that is the right size for their group, neither too big nor too small.
Plan fiduciaries must constantly be watching the investment fees their employees are paying for the funds in the retirement plan. This creates additional pressure to try and drive administrative costs down, which can in turn lead to being penny wise and pound foolish. Employers almost always have to hire outside advisors to navigate the complex guidelines set-forth by the IRS and DOL. However, merely hiring outside advisors does not absolve employers of their ultimate responsibilities. The most successful plans have a strong commitment to internal procedures and making sure they have the right person in charge with the appropriate level of support.
3rd Annual Employee Benefit Plan Benchmarking Survey 19
3rd Annual Employee Benefit Plan Benchmarking Survey 20
ABOUT ARONSON
Date Founded: 1962 | Total Employees: 250+
Single Office: Rockville, MD
Aronson LLC provides a comprehensive platform of
assurance, tax, and consulting solutions to today’s most
active industry sectors and successful individuals. For
more than 50 years, we have purposefully expanded our
service offerings and deepened our industry specialties
to better serve the needs of our clients, people, and
community. From startup to exit, we help our clients
maximize opportunity, minimize risk, and unlock their full
potential.
WHAT WE DO
• Audit services for approximately 180
benefit plans, including:
• Consulting services
• Trusted advisor on fiduciary matters
‐ 401(k) plans
‐ Profit sharing plans
‐ 403(b) plans
‐ Defined benefit plans
‐ Employee stock ownership plans (ESOPs)
‐ Health and welfare plans
ARONSON’S EMPLOYEE BENEFIT TEAM
Aronson’s benefit plan practice is unique in that they have a full‐time staff dedicated to employee benefit plan
services, something not seen in most other firms.
INTERESTED IN LEARNING MORE ABOUT ARONSON LLC OR OUR SERVICES?Call 301.231.6200 or visit us at www.aronsonllc.com
KATE PETRILLO, PARTNER 301.231.6233 | [email protected]
AMANDA FULLER, PARTNER 301.231.6289 | [email protected]
EMILY SHAPIROMANAGER
Experience: 8 years
MINDY SNYDERSR. ASSOCIATE
Experience: 11+ years
KATIE SCIANDRAMANAGER
Experience: 6+ years
HO-MING FONGMANAGER
Experience: 6+ years
KATHRYN PETRILLOPARTNER
Experience: 28+ years
AMANDA FULLERPARTNER
Experience: 16+ years
MARK FLANAGANDIRECTOR
Experience: 28+ years
KAYLA KANIASR. MANAGER
Experience: 10+ years
JILLIAN GOBBOMANAGER
Experience: 9+ years
CAITLIN LYNCHMANAGER
Experience: 5+ years
MIKE WALSHSR. ASSOCIATE
Experience: 3+ years
ANDREW MAHANSR. ASSOCIATE
Experience: 3+ years
DEREK CASSELLSSR. ASSOCIATE
Experience: 3+ years