Data & Research October 28, 2009

Study Finds ESPPs Motivate Employees

Recent research by Computershare and the London School of Economics found employees in employee stock purchase plans (ESPPs) work harder and stay with their employer longer.

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According to the survey results, employees in the U.S., UK, Australia, and South Africa all said the ESPP had a motivational impact on them. Also, U.S. employees participating in an ESPP said they were more likely to work beyond their contractual hours and to monitor a colleague’s work and say something if he or she is not doing a good job.

In the U.S., 57% of members of an ESPP work overtime in a given week, versus 41% of non-members.

In addition, the survey found U.S. workers in an ESPP were 11% less likely to quit their jobs than those not in an ESPP. ESPP participation also decreased the likelihood of quitting among workers in the UK and Ireland.

In Australia and South Africa, plan participation reduced the likelihood of quitting among those making higher monthly contributions.

The percentage of plan members that took an interest in the company’s financial performance on a weekly or more regular basis was:

  • Australia—91% (compared to 70% of non-members);
  • U.S.—89% (compared to 50% of non-members);
  • South Africa—68% (compared to 49% of non-members); and
  • UK and Ireland—45% (compared to 18% of non-members).

The full results can be found at www.thoughtcentric.com under Research & Insights for Employee Equity Plans. A free registration is required.

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Products October 28, 2009

New Partnership Offers a Solution for Missing Participant Accounts

A new partnership aims to help plan sponsors, their advisers, and third-party administrators to “easily manage the accounts of terminated participants, keep their savings invested in retirement, and reduce plan costs”. 

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RolloverSystems, Inc. (RSI), and San Rafael, California-based Pension Benefit Information (PBI) Pension Benefit Information (PBI) have announced a joint venture and a new offering; the Compliance Plus IRA Solution.   

The new offering combines PBI’s missing participant location services with RSI’s terminated participant inventory management and personal retirement counseling and includes: 

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  • missing participant services: a search process to locate missing participants and/or locate their beneficiaries;
  • participant communication: informs participants of their options for continuing their retirement savings and deliver required notifications and disclosures;
  • access to The Retirement Center: with personalized participant support from licensed rollover counselors who provide what the announcement describes as “objective guidance and streamlined rollover processing;”
  • safe harbor IRA: transfers the balances of unlocated and/or unresponsive participants directly to pre-approved safe harbor retirement accounts;
  • stale dated check services: reduces potential uncashed and returned checks by rolling over participants savings, according to the firms; and
  • rollover compliance report: provides documentation of the efforts made to reunite participants with their benefits that the firms said satisfies the fiduciary requirements under ERISA. 

The announcement noted that the Economic Growth and Tax Relief Reconciliation Act (EGTRRA) allows plan sponsors to automatically roll distributions under $5,000 into a safe harbor IRA, instead of being paid out in cash. “By teaming up, we can fulfill the Department of Labor’s complex regulatory guidelines for our clients while looking after the retirement savings of their participants,” said Susan McDonald, president and owner of PBI, in a press release. 

The RSI Retirement Center, staffed with licensed rollover counselors, will provide participants with guidance and access to IRAs, even for accounts with as little as one dollar, according to the firms. If a participant’s savings roll into the automatic rollover IRA, they will have access to all the investment products within the RolloverSystems IRA network, including brands such as Fidelity, Principal, Wachovia, Janus, T-Rowe Price, and Scottrade.

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