HSA Administrators, Clarity Benefit Solutions, Discusses Retirement Plan Trends

NEW YORK, March 26, 2018 /PRNewswire-iReach/ -- HSA administrators, Clarity Benefit Solutions, discusses retirement plan trends.

Health Savings Accounts (HSAs) are increasingly being used as retirement vehicles. Healthcare costs typically rise in retirement, and HSAs offer a triple tax advantage, so employees can set aside pre-tax monies for retirement. There is a possibility that deferral limits may increase, and retirement plan sponsors have started to offer HSA products that emulate 401(k) investment offerings, which allow employees to receive the complete package.

Innovative retirement plan sponsors are also presenting more Socially Responsible Investing (SRI) information to employees—which are of particular interest to millennials. They are seeking knowledge about SRI factors as they pertain to their 401(k) plan investment options.

The incorporation of behavioral finance elements into 401(k) plan designs is on the rise. Behavioral finance combines both behavioral and cognitive psychological theory with finance and economic conditions to determine why people may make irrational financial decisions. These elements are utilizing adverse participant behaviors to benefit employees preparing for retirement—including automatic enrollment of new hires at higher initial contribution percentages as well as automatically escalating them to increased ongoing contribution percentages. At this time, not many participants opt out of these elections. This results in higher account balances that better help them prepare for retirement.

In the same vein, progressive retirement plan sponsors re-enroll non-participating employees into their 401(k) plans each year to achieve a higher plan participation rate. Again, employees are likely to not opt out.

Another retirement planning trend is that employers are stretching their matching contributions in the hopes that employees will contribute more to their plans—thus receiving the full match. Typically, this match is 50 percent of the first 6 percent, but cutting-edge employers will move to 25 percent of 12 percent in. Then, employees must contribute 12 percent to receive the maximum matching contribution of 3 percent.

About Clarity Benefit Solutions: Clarity Benefit Solutions provides technology that makes the health insurance plan selection process fast, easy, and straightforward. For over two decades, we have provided clients with industry-leading technology, compliance, and exceptional customer service. Our offering is designed to save time and lower the costs of managing benefits while also promoting employee self-service and automated ACA compliance.

Media Contact: Calvin Clark, Clarity Benefit Solutions, 7324288282, cclark@claritybenefitsolutions.com

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SOURCE Clarity Benefit Solutions