MullinTBG/PlanSponsor Survey: communication and education key to executive benefits engagement
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"Executive benefits don't accomplish their stated goals without participant engagement," said
The survey, the longest-running of its kind, received 232 usable responses from plan sponsors who shared insights about their executive benefits offerings. As in previous years, the survey revealed a large majority of responding companies (84 percent) offer nonqualified deferred compensation plans (NQDCP) to their highly compensated employees, making it the most common executive benefit surveyed. And for those companies surveyed that offer these plans, 75 percent of them rely exclusively on a third-party record keeper to administer the plan and rank "quality of service team," "consultative in NQDCP" and "online user experience" as the top three factors they use to choose a record keeper.
"As more companies offer and improve their nonqualified programs, record keepers need to understand each plan sponsor's needs and help ensure the plans are designed in a way that keep participants engaged and increase deferral rates," says
Informal funding continues to be a popular strategy for managing NQDCP asset-to-liabilities and increased in prevalence this year to 62 percent from 57.2 percent in 2013.
Companies are primarily using corporate-owned life insurance (54 percent) as compared to taxable securities (42 percent) or cash (19 percent) as their informal funding vehicle of choice.
41 percent of respondents offer a company match, which is predominantly calculated according to a fixed percent.
74 percent of responding plan sponsors rate their plan as either "effective" or "extremely effective" as opposed to 70 percent in last year's survey.
Significant uptick in the percentage of respondents that reported that their NQDCP was offered "to provide a vehicle for retirement savings" in 2014-up to 85 percent from 77.8 percent in 2013.
58 percent of respondents that provide financial planning benefits provide them at no cost to the participant.
Prudential Retirement delivers retirement plan solutions for public, private, and nonprofit organizations. Services include defined contribution, defined benefit and non-qualified deferred compensation record keeping, administrative services, investment management, comprehensive employee education and communications, and trustee services, as well as a variety of products and strategies, including institutional investment and income products, pension risk transfer solutions and structured settlement services. With over 85 years of retirement experience, Prudential Retirement helps meet the needs of 4.0 million participants and annuitants. Prudential Retirement has
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