Products August 12, 2016

Everything Benefits Launches 401(k) Integration Solution

EverythingBenefits has released a new platform that automates key aspects of 401(k) administration, including payroll-data management.
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EverythingBenefits has launched a new 401(k) integration platform that automates tasks such as communicating payroll data and deferrals, monitoring employee demographics, and managing contributions.

The platform is designed to increase productivity in 401(k) administration, while enhancing compliance by reducing the room for error, according to the firm. Further, all data that needs to be sent to a 401(k) provider can be automatically and securely delivered in the required format.

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According to the United States Department of Labor (DOL), the Employee Benefits Security Administration (EBSA) recovered $696.3 million in 2015 for direct payment to plans, participants and beneficiaries. It also closed 2,441 civil investigations, with 67.2% or 1,640 of those cases resulting in monetary results for plans or other corrective action. The firm says these are clear indications of the need for skillful integration and management of compliance-sensitive tasks.

“With such crucial compliance issues at stake for businesses, manually transmitting 401(k) data and files is quickly becoming a thing of the past,” explains Rachel Lyubovitzky, CEO of EverythingBenefits. “Our 401(k) integrations are yet another way that we will help the more than 70 payroll companies we integrate with, and their small- to mid-sized business clients spend less time, money, and resources on benefits administration, and more time focusing on what’s important—enhancing their core business.”

More information is available on the firm’s website. 

Data & Research August 12, 2016

DC Participant Withdrawal Activity Down in Q1 2016

Participants with outstanding loans is also down from a year ago, according to ICI data.
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DC plan participants’ withdrawal activity during the first quarter of 2016 was similar to activity observed during the first quarter of the prior year, data from the Investment Company Institute (ICI) shows.

In the first quarter, 1.1% of DC plan participants took withdrawals from their DC plan accounts, down from 1.3% in Q1 2015, and 0.4% took hardship withdrawals, the same percentage as in the first quarter last year. Seventeen percent of DC participants had loans outstanding in the first quarter of this year, compared to 17.4% in the first quarter of last year.

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ICI says two factors appear to influence DC plan participants’ loan activity: reaction to financial stresses and a seasonal pattern. Likely responding to financial stresses, the percentage of DC plan participants with loans outstanding rose from the end of 2008 (15.3%) through 2011 (18.5%). This pattern of activity is similar to that observed in the wake of the bear market and recession earlier in the decade. The share of DC plan participants with loans outstanding then leveled out in 2012 through 2015, perhaps reflecting loans supporting consumer spending or home purchases.

ICI’s recordkeeper data shows only 1.1% of DC plan participants stopped contributing in Q1 2016, compared to 1% in Q1 2015. ICI notes it is possible that some of these participants stopped contributing simply because they reached the annual contribution limit.

The survey of recordkeeping firms also gathered information about asset allocation changes in DC account balances or contributions. During the first three months of the year, 4.3% of DC plan participants changed the asset allocation of their account balances, the same share as in the same period in 2015. Reallocation activity regarding contributions was higher in Q1 2016 than the level observed in recent periods: 5.2% of DC plan participants changed the asset allocation of their contributions in Q1 2016, compared with 4.2% in Q1 2015, 4.5% in Q1 2014, and 4.8% in Q1 2013.

ICI’s report of DC plan participant activity in the first quarter of 2016 is here.

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