The Defined Contribution Institutional Investment Association (DCIIA) and the Society of Professional Asset Managers and Recordkeepers (SPARK) Institute surveyed members in early April with regard to how they were coping with the coronavirus pandemic, Tim Rouse, executive director of the SPARK Institute, tells PLANADVISER.
“We found that the industry is holding steady on staffing,” Rouse says.
What was rather remarkable, he says, is that in January, less than 20% of members’ workers were regularly working from home. That jumped to more than 98% in April.
“The transition to working from home was very seamless because our industry already had experience, but there was an increased focus on implementing new staff management procedures, maintaining cybersecurity and tracking web traffic,” Rouse says.
With participants seeking more loans and hardship withdrawals, recordkeepers are encouraging participants to continue to think about the long term, Rouse says. For their part, some plan sponsors are cutting their employer contributions, he says.
One firm that has received a lot of attention in the past week is TIAA, after news stories emerged suggesting it is offering buyouts to 75% of its employees. While true in a sense, in reality, the firm estimates that only 5% to 7% of eligible employees will participate, a TIAA spokesperson tells PLANADVISER.
“As we navigate through these unprecedented times, we are exploring a variety of measures to reduce costs while managing our business and continuing to serve our clients,” the spokesperson says. “As part of that process, we have introduced a voluntary separation program for our employees. We remain committed to protecting our clients’ long-term interests and maintaining excellent service levels. Therefore, some employee groups in critical client-support roles are not eligible to participate in the program. These include certain process and technology roles.”
TIAA is offering those who are participating in the buyouts 45 to 91 weeks’ salary, depending on their length of service and salary. The firm is also giving them 100% of last year’s cash bonus. They will receive up to 18 months of TIAA-subsidized medical coverage under COBRA and six months of outplacement assistance.
The spokesperson says U.S. employees have until mid-July to make their election. “After the program election period ends, senior leadership will review the collective results to ensure that the business can continue to operate effectively,” the spokesperson says. “Final decisions will be communicated by August 3.”