Employers need more flexibility and simplicity in providing retirement and other benefits, officials with the American Benefits Council said Tuesday as they unveiled a strategic plan for where employee benefits should be in 2020.
“The era of one-size-fits-all approaches to health and retirement benefits policy is over,” said Janet Boyd, director of government relations, tax and benefits for Dow Chemical Co. and chairwoman of the council's board of directors.
To help improve retirement readiness, the council called for higher contribution limits and lowering the eligibility age to 45 for “catch-up” contributions to defined contribution plans. They also recommend higher default contribution and escalation rates, and a good-faith presumption that would allow employers to use new technology to communicate benefit information without having to wait for regulatory changes.
A key part of the plan is creating “a new regulatory paradigm” that targets employers with poor performance related to benefit regulations, “rather than imposing all the burdens on everyone in the system,” said council President James A. Klein, who called for exceptions for large employers, instead of ones currently available for small employers.
“We have to adopt an exceptions-based approach,” said Michael Kiely, senior vice president for federal government affairs for United Parcel Service Inc. “We have to spend more time and energy on simplifying all the rules and regulations.”
Five years from now, council leaders expect more integration of health and financial well-being objectives among employers, and more pressure on benefit plan design from global competitiveness.