Data & Research February 8, 2016

Segal Charts the Multiemployer DC Plan Market

The firm says multiemployer DC plan trustees can benchmark their plans against Segal’s client database.
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The predominant plan design for multiemployer defined contribution (DC) plans is a profit sharing plan, according to Segal Consulting’s Study of Multiemployer Defined Contribution Plans.

Less than one-quarter (24%) of multiemployer DC plans offer a 401(k) feature, and 23% use a money purchase plan design.

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When looking at administration, which excludes contributions because those are always handle by the fund office, 57% of plans are self-administered by the fund office. Nearly one-third (32%) of plans use a service provider such as a recordkeeper or third-party administrator (TPA), and for 11% administration is shared by the fund office and service providers.

For 52% of multiemployer DC plans, investments are trustee-directed, while the remainder (48%) are participant-directed.

Hardship-withdrawal provisions, which Segal says can only be offered by profit-sharing plans, are more common than loan provisions. Fifty-eight percent of plans permit hardship withdrawals, and 35% permit loans.

“Given the increasing importance of defined contribution plans as a supplement to defined benefit plans, trustees have an opportunity to examine the several different DC approaches that can further ensure participants’ retirement readiness,” says Rick Reed, director of defined contribution at Segal Consulting.

Data & Research February 8, 2016

Employees Want Overall Financial Help

The top area giving employees the most financial stress is saving enough to meet retirement goals.
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Three-quarters of employees report they feel impacted by financial stress, according to a survey by workforce communications company GuideSpark.

The areas giving employees the most financial stress include saving enough to meet retirement goals (69%), having enough cash savings to cover the employee and her family if she loses her job (68%), and being financially prepared for expected life-changing events (i.e. marriage, new child, job change) (63%).

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More than three-quarters (78%) of employees say they would choose to join a company that offered financial health benefits over one that didn’t. Eighty-one percent would be less likely to leave a company that was helping them improve their financial standing.

Eighty-seven percent of Millennials say their companies should play a role in helping them prepare for their financial future.

According to employees, the top benefits of a financial wellness program are:

  • Reduce financial stress (81%);
  • Appreciate their company more (76%);
  • Lower their health care costs (65%);
  • Improve their physical health (62%); and
  • Enable them to focus more on their jobs (56%).

“This survey shows that employees in general are under tremendous financial pressure. Employers that relieve some of that pressure, beyond salary, are bound to be rewarded with increased productivity for Gen-X workers, retirement readiness for Baby Boomers and attractiveness for Millennials,” says GuideSpark co-founder Jon Wolff. 

The GuideSpark Financial Wellness survey was conducted in September 2015 among 362 respondents. For a full copy of the GuideSpark survey results, an infographic of the highlights, or to speak with a GuideSpark spokesperson, email guidespark@sparkpr.com.

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