Check The Fine Print

As the saying goes, an oral agreement is as good as the paper it’s written on. However, once it’s in writing, it might as well be written in stone. Such is the case with labor contracts.

Closing the Coverage Gap

During this one hour webinar, you’ll hear more about the challenges facing employers today and practical solutions to help close this coverage gap.

The EEOC’s New Wellness Regulations: Another Layer of Confusion

The EEOC recently issued two final rules governing how the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) apply to employee wellness programs.

Proposed Rule on Expatriate Health Plans, Excepted Benefits, and Essential Health Benefits

In a tri-agency proposed rule, the Department of Labor (DOL), Department of Health and Human Services (HHS), and Department of Treasury (Treasury) have published guidance discussing expatriate health plans (expat plans), excepted benefits, and essential health benefits (EHBs).

Proposed Rule on Expatriate Health Plans, Excepted Benefits, and Essential Health Benefits

In a tri-agency proposed rule, the Department of Labor (DOL), Department of Health and Human Services (HHS), and Department of Treasury (Treasury) have published guidance discussing expatriate health plans (expat plans), excepted benefits, and essential health benefits (EHBs).

Are Your Employees Prepared for Retirement?

A career in K-12 education is much different than one in the corporate world, particularly when it comes to retirement planning. Too often, school district employees have many choices for their retirement of which they may not be taking advantage.

Research shows only around 30% of K-12 employees participate in their school-sponsored 403(b) plans while about 70% of corporate employees participate in their company’s 401(k) plan.

This discrepancy may be the result of many factors, including:

  • Complicated enrollment processes;
  • Autoenrollment confusion; and
  • Lack of education regarding the importance of saving for retirement.

By implementing a few changes, school administrators can potentially increase the rate of enrollment for retirement plans and, ultimately, save themselves money.

Lack of Enrollment

As financial professionals, we understand how overwhelming the world of retirement savings and investing can be. We also understand that school district employees can not rely on their pension or other minimal savings alone. School district employees need to start planning for retirement earlier and rely on more than Social Security.

The Impact on Teachers, Schools, and District Budgets

Not promoting retirement plans and the necessity of saving early affects school employees, administrators, districts, and students. When a school teacher or other employee doesn’t save enough for retirement, they may be forced to stay at their job much longer than they would like. Some people call this the “quit and stay,” where a teacher stays at a job, but has mentally quit.

When teachers “quit and stay,” school administrators pay for their salary, which is higher than a newer teacher. This is no small cost when, according to the National Center for Education Statistics, 80% of education expenditures are for salaries and benefits for staff.

Conversely, when school district employees start saving for retirement early and efficiently, they are more likely to be able to retire on schedule. This means that school administrators can hire newer teachers at lower salaries. If school officials set up a supplemental retirement plan that’s simple to enroll in and actively endorse autoenrollment, they can help more employees save for retirement.

What You Can Do

There are five steps that your administration can take to help set their employees on the right track:

  1. Consider consolidating the number of vendors available for 403(b) or 457 plans. When faced with too many options, school employees can feel overwhelmed and might not take action. Research shows that, on average, every additional 10 investment choices cuts participation rates by 2%.
  2. Take the time to compare investment options and fees. Some plans are starting to offer more competitive and lower cost investment options, including auto-diversified options.
  3. Help employees choose auto-enroll or auto-increase, but don’t force them. Some vendors allow participants to start with a minimal contribution and increase it over time. Lay out these options to those employees who feel like they don’t make enough money to save.
  4. Don’t be afraid to endorse and explain a plan. Choose a plan, educate your employees on that plan, and seek professional financial help to find the plan that is best for your employees.
  5. Work with a firm specializing in retirement plans for schools. At Arista Financial Group, we have been working with school districts for decades, implementing an Invest-N-U program designed to help reduce costs and increase participation rates.

By educating employees on their retirement savings options, schools can potentially reduce this budget and spend more on other expenses, such as curriculum, education tools, and younger staff.

At Arista Financial Group, we strive to help schools implement and maintain a state-of-the-art, smartly designed, and successful employee retirement plan for the future. To learn more about how we can help you and your employees with a dynamic 403(b) or 457 plan, contact us today for a complimentary consultation.

This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.

“Stressed” Is “Desserts” Spelled Backward

Stress eating, sometimes called emotional eating, is where a person feels the need to eat (usually in large amounts) some type of “junk” or “comfort food” in response to an emotional situation rather than due to feelings of being hungry.