BCG Blog - Sponsors

Major changes to student loans could be coming to an employee near you. While payment options may be reduced for borrowers, plan sponsors looking for avenues to help those participants still have many options.

Employers know that a strong benefits lineup attracts and retains quality employees. They also know those employees are the best asset their company has. But they might not know what they don’t know: how those costs and fees compare to their competition. It can be hard to know what points to look at when comparing plans. Yet benchmarking is essential to plan management.

The prevailing wind when it comes to encouraging employees to invest their HSA funds is to increase education. But that does not mean sponsors have to sail into it. Instead, they may want to factor in sharp rises in health care spending and continuing needs for emergency funds when drafting internal communications.

Lately we’ve noted an uptick in the word recession. It isn’t the frequency of its use that concerns us, it’s the placement. Lately, the use of the word recession has been popping up more in the general media. While we know that talk of recession is a strong indicator of investor confidence concerns, it’s a complicated topic. Getting it right is important.

New research indicates a gap between how well retirees perceive that they are doing against how well they actually are financially. In the past survey responses of retirees showed high satisfaction even though objective measures told a different story. Plan sponsors may want to increase participant education programming to help with the gap areas identified in new research.

The Department of Labor (DOL’s) beleaguered fiduciary duty rule lingers on in federal court litigation, but there are signs that the dispute (as well as the Rule) may not be around for long.

There are several levels to the news on ESG. For plan sponsors not all of the forthcoming information is necessarily news to use. We suggest focusing on the news about lawsuits on fiduciary duties and ESG rules for plan sponsors.

Instead of taking changes at the DOL as single item issues, it might be more useful to see how all the changes interact. Often, legislators and regulators want changes to interact like a puzzle; each piece interlocking to form a larger picture. But sometimes when many policies are changed at the same time, conflicts emerge that can put those supposed to be following them into the proverbial spot between a rock and a hard place.

Many plan sponsors report lags in enrollment and retirement activity among plan participants. While some statistics show that new tricks and tips have impacted participation in retirement plans, enrollment may still lag. It is possible that the way employees think about retirement in general could be behind the lag in active retirement investing.

Sponsors looking for more definitive guidelines following the Supreme Court’s Hughes decision may be waiting awhile. New court decisions haven’t stemmed the influx of cases, and further FINRA notices may indicate that Sponsors need to tighten their compliance efforts.

The Supreme Court’s recent case concerning plan fees has opened a pandora’s box of options for plaintiffs. Plan Sponsors may want to monitor recent developments and consider expanding their benchmarking plans.