Plan Advisers May Help Boost Employee 401 Participation
Of plan sponsors with full employee participation, 80% work with an adviser to help design and manage their 401 benefit, according to new research from Morgan Stanley at Work.
401 retirement plan sponsors who work with a plan adviser are likely to see better outcomes in employee participation than those without an adviser, according to research released Tuesday from Morgan Stanley at Work.
Of plan sponsors who reported full employee retirement plan participation, 80% work with an adviser, according to research from the investment firms retirement and financial wellness division. Of those companies with less than 25% eligible employees participating in their 401 offering, only 62% reported working with an adviser.
The dynamics of todays economy have changed, with employers and employees alike juggling numerous competing financial needs, Anthony Bunnell, Head of Retirement for Morgan Stanley at Work, said in a release. Its not surprising that plans with financial advisers are associated with more engaged employees, as a financial adviser can play a central role not just in managing the plan, but in helping employees navigate the markets and invest in their future.
The majority of plan sponsors say they pay attention to legislative changes to retirement plansthough only 33% are receiving information about this area from their advisers. Meanwhile, 31% say they are not monitoring the regulatory space, and 7% saying they are sometimes monitoring it.
Workers Want Support From Their Employers
New concerns over economic uncertainty are adding to financial stress for American employees. As a result, more workers are leaning on their employers for financial and saving support from employment benefits like a 401 retirement solution.
Currently, only a little over half of private sector workers in the United States are covered by an employer 401 retirement plan, and few workers save without one.1 As workers continue to understand the importance of retirement savings, this is a great time for employers to reevaluate employee benefits and find a retirement solution to fill this need. In fact, 73% of employees are willing to stay with an organization because of its retirement benefits and 86% of job seekers say a 401 is a must have item when evaluating a job offer.2,3 The costs and resources required to manage a retirement plan can be offset with savings in employee turnover and increased productivity from existing employees.
“For employees and employers alike, the stakes today are high when it comes to ensuring employee financial wellbeing. Amid new challenges like persistently high inflation, many employees are seeking help managing their short- and long-term financial needs. We have seen firsthand that many employers are stepping up to tackle these challenges, yet there remains more work to be done.
Brian McDonald, Head of Morgan Stanley at Work
Accident And Critical Illness Insurance
Accident insurance and critical illness insurance are two plans offered by Unum that provide additional financial security in the event of an accidental injury or a serious illness. The plans pay money directly to you to spend any way youd like. You can use the cash to pay out-of-pocket medical expenses, your mortgage, or even for someone to do your grocery shopping while you recover.
You can choose to enroll yourself and your spouse or domestic partner and children in one or both of these plans as a new employee or during open enrollment. There is no preexisting condition clause, and there are no health questions to answer.
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How Insurance Can Help With Retirement Planning
Does your employer offer a matching contribution to your 401 plan? If so, find out how much you need to save to qualify for that match. The most common match formula is 50 cents for every dollar saved, up to 6% of your pay. Employees in this type of plan need to contribute at least 6% of their salary to the 401 plan to get the maximum possible 401 match.
Saving 6% of your pay in a 401 plan and earning a 3 percent match means you are tucking away an amount equal to 9 percent of your salary each pay period for retirement. For example, a worker earning $75,000 per year, this means an annual 401 contribution of $4,500, plus another $2,250 in employer contributions. This match is a powerful incentiveessentially free money from your companythat will help you get closer to your retirement savings goal.
If your employer does not currently offer a matching contribution, it still makes sense to contribute to your plan on a regular basis for three important reasons:
- There are tax advantages. In a traditional 401, your contributions dont count toward your gross income for the year, lowering your taxable income .
Financial Education And Resources
From unfamiliar terms and abbreviations to complex tax rules, theres a lot to know about managing your money and achieving your long-term objectives.
Visit the financial wellness SharePoint page, and click the tiles to build your financial knowledge.
- Learn about equity: Access educational webinars and recordings to learn more about Rivians equity programsthe employee stock purchase plan , restricted stock units and stock options.
- Meet with a financial advisor: Schedule a free 30-minute virtual meeting with a Morgan Stanley financial advisor, who can answer questions about topics such as:
- Tax and financial strategies for your Rivian equity
- Trust and estate planning
- Achieving financial goals
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Employee Stock Purchase Plan
At the core of our total rewards strategy is the concept of ownership for all, meaning that every employee at Rivianwill haveopportunitiesto share inoursuccessthrough equity programs.
With the ESPP, you can contribute up to 15% of your eligible compensation via convenient payroll deductions to purchase shares of Rivian stock at a discount of at least 15%. For details, visit the .
New Employees Register / Enroll:
You will be directed to your account details where you may start to manage or review as soon as your registration has been successfully completed.
Other helpful links:
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How To Help Maximize Your 401 Plan
One of the simplest and most effective ways to save for retirement is to contribute to your companys 401 plan. A 401 plan allows you to defer a portion of your paycheck to your retirement account each pay period automatically, while potentially reducing your tax bill this year. But are you getting the most out of your 401?
Here are three 401 retirement strategies to consider.
Supplemental Life And Ad& d Insurance
For additional peace of mind and financial security, you can also purchase supplemental life and AD& D insurance for yourself and your family, on top of your company-paid insurance.
You pay 100% of the cost, and you must enroll in coverage for yourself before you can enroll eligible dependents.
As a new hire and during the annual open enrollment period, you can:
- Choose coverage in $10,000 increments for yourself up to the lesser of 5 times your annual salary or $500,000.
- Choose coverage in $10,000 increments for your spouse up to the amount you elect for yourself, with a maximum of $250,000.
- Cover your dependents in $2,500 increments, up to $25,000.
If you elect more than $350,000 for yourself or more than $50,000 for your spouse, you will be required to submit evidence of insurability .
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Employee Benefits May Include The Following:
401k, Pension, Retirement, Retiree, Health Insurance, Medical, Vision, Dental, IRA, Competitive Base Pay, Quarterly Bonus, Paid Time Off, Weekly Pay, Medical, Dental, Vision, Insurance, Health Savings Account, Flexible Spending Accounts, Short-Term and Long-Term Disability, Paid Family Medical Leave, Bereavement, Jury Duty and Parental Leave, Life, Dependent and Accident Insurance, Critical Illness Insurance, Savings Plan 401, Company Paid Retirement Benefit, Employee Stock Purchase Plan, Paid Holidays, Flexible Spending Accounts , Health Savings Account , Time Off and Flexible Days, Group Legal Plan, Group Home Auto Insurance, Pet Insurance, Employee Discounts, Adoption Reimbursement, Tuition Reimbursement and Student Loans, Well-Being Programs, etc
Quick Summary of Benefits:
As of 2019, they have a record of over 70,000 employees in their organization. Their employees may join in a wide selection of benefit programs as soon as they become eligible. They may be eligible to the following benefits once they are qualified:
- Health Insurance
- Diversity Program
- Tuition Assistance
Please note that the full list of benefits available to new employees varies from location to location due to differences in local laws, regulations, and customs and may change at any time.
Please visit the official company website directly to verify all benefit options and details. You may also visit the link provided below for more information and verification.
Financial Wellness Benefits Are ‘gaining Momentum’
Company executives are doing more to provide holistic financial benefits to employees and are spending more money on those benefits, according to McDonald.
“The conversation is more around financial well-being, and that trend is certainly gaining momentum,” he said.
The survey found 60% of employees are paying more attention to reviewing their financial benefits compared to a year ago.
Moreover, 84% of human resources leaders say employees have requested financial benefits their companies do not offer, up from 78% in 2021.
That’s even as the survey found more executives now say their companies are offering quality financial benefits.
Yet 96% of HR leaders said their companies need to do more to help employees better understand how to maximize the financial benefits available to them, up from 93% who said that last year.
Meanwhile, 89% of employees agree, up from 87% in 2021.
When it comes to financial benefits, the top choice cited by employees was access to a financial advisor, with 52% followed by goals-based retirement investment planning, with 48% and access to retirement tools and calculators, 46%.
However, HR leaders cited different priorities, with goals-based retirement investment planning coming in first, with 47% followed by access to retirement planning tools and calculators, with 43% retirement planning workshops, 40% and access to a financial advisor, 40%.
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Its Important To Determine How Much Money You May Need To Save For A Comfortable Retirement Here Are Three 401 Retirement Strategies To Consider
Life expectancy continues to expand, thanks to new advances in medical care and a focus on better health habits. A longer life often means more years in retirement, which could last 30 years or more.
How much money is enough for a comfortable retirement? The IRS suggests youll need up to 80% of your annual income today to help maintain your quality of life once you say goodbye to a regular paycheck.1 And when you consider the average benefit amount paid monthly by the Social Security Administration is $1,177, many of us may need to boost our nest egg.2
Keller Rohrback Investigates Morgan Stanleys $8 Billion 401 Plan
Keller Rohrback L.L.P. is investigating recent reports that Morgan Stanley mismanaged its employees 401 Plan and engaged in illegal self-dealing.
The Morgan Stanley 401 Plan is loaded with high-expense low-return investment options, many of which are proprietary Morgan Stanley mutual funds. As a result, Morgan Stanley profited from the excessive fees it charged its own employees.
Keller Rohrback L.L.P. has experience helping employees and retirement plans fight to recover losses caused by excessive fees. If you invested in a Morgan Stanley employee 401 plan and you would like to learn more about your legal rights, please contact attorney Erin Riley. Call 800.776.6044 or email .
For decades, investors have trusted the attorneys at Keller Rohrback L.L.P. to help them recover losses due to breaches of fiduciary duty. Keller Rohrback L.L.P. has a national reputation for groundbreaking ERISA class action litigation, and serves as lead and co-lead counsel in ERISA and other class actions throughout the country. With offices in Seattle, Phoenix, New York, Ronan, Santa Barbara, and Oakland, our Complex Litigation Group is proud to offer its expertise to clients nationwide. Our trial lawyers have obtained judgments and settlements on behalf of clients in excess of seven billion dollars. Learn more about our Employee Benefits, Retirement Security and Employment Law group.
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Rating A Fund Managers Skill
Using a forward-looking analysis, like the process outlined above, is an important part of selecting target date fund manager or any QDIA fund manager. But its not enough.
Thats why the second part of our process is to qualify the fund manager themselveslooking back at their track record and quantifying the value theyve historically provided their investors.
To do this, we construct a fund or fund family-specific benchmark for each TDF under consideration. Then, we measure each managers value-added against this benchmark, looking at a combination of five factors:
- Asset class inclusion and weighting decisions, for example, a higher-than-average weight to non-U.S. stocks
- Glidepath decisions, such as the timing and degree of risk reduction as investors age
- Tactical asset allocation decisions, meaning short-term, responsive shifts in asset allocation
- Security selection decisions and the interaction between them and asset allocation decisions.
Another Day Another 401 Lawsuit
Morgan Stanley was hit with a class action Friday, filed on behalf of 60,000 workers. The suit claims that the company mismanaged its own employees’ retirement plans by offering poorly performing funds and charging excessive fees.
The suit also alleges that the company used the 401 plan as an opportunity to promote its own business and maximize profits at the expense of its employees.
It offered its own funds, without thoroughly investigating whether funds from other companies would be better for its employees, the lawsuit states. For example, the Morgan Stanley Institutional Small Cap Growth Fund IS Class performed worse than 99% of small cap growth funds in 2014, and worse than 95% of them in 2015.
That same fund carried a fee of .98%, which the suit compared to a similar fund from Vanguard that charges .07%.
Morgan Stanley declined to comment on Friday.
With more than $8 billion in assets, its plan is one of the largest 401 plans in the country and therefore should have “tremendous leverage” in being able to provide “superior” investment products and services, the lawsuits states.
It is seeking class action status on behalf of all plan participants from March 2010 through February 2016.
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Morgan Stanley At Work Retirement Study Shows Plan Sponsors Prioritizing 401 Plan Design Amid Challenging Labor And Economic Conditions
Attracting and retaining talent continue to pose challenges amid a tighter jobs market, changing workforce dynamics, and shifting business needs
Access to a Financial Advisor strongly correlates with employee participation
Not all 401 plans are created equal, and an agile plan design is key
NEW YORK, December 06, 2022—-Morgan Stanley at Work today released new research from its workplace retirement study that highlight retirement plan sponsors are prioritizing 401 plan design amid challenging economic and jobs environment. While the 401 plan continues to be an essential workplace benefit to attract and retain talent, plan sponsors emphasized the need for an attractive plan with a range of features to meet the evolving financial needs of a diverse workforce.
Based on survey results, plan sponsors continue to see the 401 as a leading retirement benefit when it comes to attracting and retaining talenta top priority. As the economic climate becomes more complex, plan design has emerged as a differentiator to help drive employee enrollment and support the companys talent strategy. 401 plans with a Financial Advisor, or that offer features like a Roth or company match, are seen as more attractive with higher enrollment rates, which in turn inform employee satisfaction and support retention. The research also shows an increased need for employee financial education that is engaging, tailored to specific life or financial stages, and digital-friendly.
Analyzing And Ranking Target Date Funds
Allocation is an important determinant of investment resultsresponsible for up to 90% of differentiation in returns.1 Thats why we employ a rigorous, highly analytical process to evaluate and choose TDFs that are appropriate for retirement investors. Heres how we break it down and help make the process simpler as we work with plan sponsors.
First, we look at the asset allocation strategies of various TDF options through the lenses of four different metrics:
- Glidepath Shapehow the fund shifts its equity allocationthe portion thats invested in publicly traded stocksas participants get closer to their target retirement date.
- Goal Attainmentthe probability of the funds success in meeting a target retirement income replacement.
- Lost Decade Riskthe potential impact of long-term adverse events, like the near 0% market returns between 2000 and 2009, caused by the financial crisis.2
- Drawdown Riskthe potential impact of short-term adverse events, like the COVID-19 equity selloffs in February and March of 2020.2
Once we understand participants risk preferences, we can weight these metrics and rank funds relative to your employee demographics or your plans risk preferences.
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Morgan Stanley Becomes Latest Bank To Cut Jobs As Dealmaking Slows
Morgan Stanley is dramatically expanding its benefit programs for employees giving new parents at least 16 weeks off and allowing some employees the ability to buy stock at a 10 percent discount, according to a report.
Under the new benefits program, Morgan Stanley ups their contributions to employees 401 plans and allows employees to take four weeks paid leave to care for family members, Bloomberg reports.
As The Post has previously reported, bonuses on Wall Street are expected to hit records as financial giants like Goldman Sachs and JPMorgan grapple with a dire lack of bankers, even as demand for dealmaking continues to surge.
After winning significant salary bumps this year, Wall Street financiers can now expect a double-digit increase in year-end bonuses a jump not seen since before the Great Recession, according to recent data from compensation consulting firm Johnson Associates.
With a historic tide of mergers, IPOs, spinoffs and other big strategic deals continuing to flow, bonuses for investment bankers will see the steepest jump, with a 30 to 35 percent increase in their bonuses from 2020, according to the firm.
Banks arent just hiking pay theyre also making lifestyle concessions to employees. Recruiters told The Post that Goldman Sachs and JPMorgan will set the expectation that people need to come into the office. But theyll be willing to work around employees they really want to keep or hire.