A survey of 333 large and mid-size employers by Willis Towers Watson reveals nearly half (49%) are considering making a change to at least one of their benefit or compensation programs this year or next due to tax reform.
Two-thirds of those (66%) surveyed are planning or considering making changes to their benefit programs, or have already taken action. The most common changes organizations have made or are planning or considering include expanding personal financial planning (34%), increasing 401(k) contributions (26%) and increasing or accelerating pension plan contributions (19%).
Other potential changes include increasing the employer health care subsidy, reducing or holding flat the employee payroll deduction, or adding a new paid family leave program in accordance with the Family Medical and Leave Act’s (FMLA) tax credit available for paid leave for certain employees.
Sixty-four percent of employers are planning or considering taking action on their broad-based compensation programs, or have already taken action. The most common changes organizations have made or are planning or considering include conducting a review of their compensation philosophy (43%), addressing pay-gap issues (36%) and introducing a profit-sharing or one-time bonus payout to all employees (21%).
About four in 10 companies (41%) are planning or considering changes to their executive pay programs, or have already taken action. The most common changes employers have made or are planning or considering include spending more time and analysis on this year’s incentive target (33%) and increasing the use of discretion in 2018 incentive plans (19%).“The tax reform law is creating economic opportunity to invest in their people programs,” says John Bremen, managing director, human capital and benefits, Willis Towers Watson. “While a significant number have already announced changes to some of their programs, the majority of employers are proceeding to determine which changes will have the highest impact and generate the greatest value.”