Products June 26, 2017

Nationwide Offers Health Care in Retirement Help

The service will be offered to certain annuity customers.
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Nationwide will offer the Nationwide Care Concierge service to existing and new customers of certain variable annuities at no additional cost beginning July 24. This confidential service allows advisers to provide 24-hour access to guidance on many of the complex questions and issues that can come up in retirement.

“Nationwide is committed to trying new things to help Americans prepare for and live in retirement,” says Eric Henderson, senior vice president of Nationwide’s annuity and life insurance businesses. “We’re proud to offer Care Concierge on select variable annuities as a new, innovative benefit for members.”

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The Care Concierge service will be administered by West’s Health Advocate Solutions, a clinical health care advocacy provider. The firm estimates that Care Concierge will initially be available to 25,000 members, increasing to more than 30,000 members by the end of the first year. In addition to contract owners, the program extends to their spouses, dependent children, parents and parents-in-law.

As part of the program, Nationwide will assist those turning age 65 navigate the Medicare system. The firm will also help clients find doctors and make appointments, research and review medical treatment options, and manage health insurance claims as well as billing issues.

“Health Advocate is an industry leader in health care advocacy serving over 50 million lives,” Henderson says. “We trust them with our own associates as we have a current partnership with them as an associate benefit, and we trust them with our members.”

Data & Research June 26, 2017

Only 53% of Small- to Mid-Sized Businesses Offer Retirement Plans

Cost and oversight are cited as main obstacles.
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Only 53% of small- to mid-sized businesses, those with five to 250 employees, offer a retirement plan, The Pew Charitable Trusts found in a survey.

Ninety-three percent believe their employees would prefer a higher salary or other benefits. Employers are much more likely to offer paid time off (86%) and health care plans (61%) than a retirement plan. In addition, only 45% offer dental or vision insurance and 22% tuition assistance.

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Firms are more likely to offer a retirement plan if they are older and larger. The likelihood of a firm offering a retirement plan is either in its first years or as it approaches 75 employees. “This suggests that businesses may need to reach a point of financial stability before taking on responsibility for a retirement benefits program,” Pew says in its report, “Employer Barriers to and Motivations for Offering Retirement Benefits.”

Asked why they offer plans, employers said it is to help employees save for retirement (96%), to attract and retain employees (89%), to improve employee performance (91%), to give tax advantages to employees (77%) and to give tax advantages to managers (58%).

Most employers offer contributions. However, only 34% automatically enroll participants and only 14% use automatic escalation. Among those that do not automatically enroll participants, 41% said they thought their employees would not like that, and among those that do not automatically escalate deferrals, 40% said the same.

Among industries, professional, production, transportation and material moving companies are more likely to offer a retirement plan than companies in natural resources, construction and maintenance. Pew says that the former set of companies are more likely to have full-time workers.

As to why they do not offer a plan, 37% said because it is too costly and 22% said they do not have the organizational resources to manage a retirement plan. While most employers were at least somewhat familiar with 401(k) plans, far fewer knew about Simplified Employee Pension (SEP) plans, Savings Incentive Match Plan for Employees (SIMPLE) individual retirement accounts (IRAs) or myRAs, which are designed for small firms and individuals, Pew said.

Among the companies that do not have a retirement plan, 67% said that if their business profits rose, they would consider starting a retirement plan. Another 60% pointed to the possibility of an increase in tax credits for companies starting a plan as motivation for them to offer one.

The Pew report can be downloaded here.

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