Data & Research February 6, 2012

Majority of Employees Find Benefit Counseling Valuable

Ninety-six percent of workers who take part in individual benefits counseling sessions say they better understand their benefits as a result. 
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According to the survey by the Colonial Life & Accident Insurance Company, 47% of employees say attending benefits counseling sessions significantly improved their understanding. Ninety-eight percent of employees believe having annual one-to-one benefits counseling sessions is important, with 63% saying it’s very important.

Employers spend a lot of money providing benefits for their employees, yet research shows the vast majority of them don’t think their employees really understand their benefits packages. Colonial Life said less than 19% of employers think their employees have a very good understanding of their benefits. And nearly 5% think their employees know nothing at all about their benefits.

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Results from the survey are based on an online post-enrollment poll of more than 15,000 employees conducted by Colonial Life & Accident Insurance Company since January 2010.

Compliance February 6, 2012

IRS Issues Guidance About Annuities in Retirement Plans

The Internal Revenue Service (IRS)  issued two pieces of guidance to clarify how certain rules apply when a retirement plan offers an annuity to participants.
 
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Revenue Ruling 2012-3 describes how the qualified joint and survivor annuity (QJSA) and the qualified preretirement survivor annuity (QPSA) rules, described in §§ 401(a)(11) and 417 of the Internal Revenue Code, apply when a deferred annuity contract is purchased under a profit-sharing plan.
 
Revenue Ruling 2012-4 describes whether a qualified defined benefit pension plan that accepts a direct rollover of an eligible rollover distribution from a qualified defined contribution plan maintained by the same employer satisfies §§ 411 and 415 of the Internal Revenue Code in a case in which the defined benefit plan provides an annuity resulting from the direct rollover.  

Both rulings will appear in IRB 2012-8 dated February 21, 2012. 

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The IRS announced a guidance package which builds on comments received in response to the Treasury and Labor Department’s joint request for information on the desirability and availability of lifetime income alternatives in retirement plans. The guidance is designed to make it easier for retirees to choose to receive their benefits as a stream of income in regular payments for as long as they live (see “U.S. Treasury Proposal to Reduce Regulatory Burdens for Retirees“).

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