Data and Research January 22, 2021

Employees Want More Help From Employers on Retirement

More than half of participants surveyed said a guaranteed retirement benefit would best meet their needs.

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The Willis Towers Watson “Global Benefits Attitudes Survey” found that U.S. employees want more help from their employers to save for retirement. They’re also seeking more help balancing their work and life issues and getting the most value from their employee benefits.

Fifty-three percent said saving for retirement was the area in which they most wanted help from their employers. When asked what would best meet their needs to save for retirement, 53% said they want a guaranteed retirement benefit, 42% want more generous retirement benefits in exchange for lower pay, 41% want medical benefits in retirement and 29% would like access to other savings and investment products.

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Thirty-seven percent cited reducing benefit costs as their top benefits priority for 2021. That was followed by 26% wanting to receive greater benefits security from their employer, 19% wanting more benefit choices and 18% wanting flexible work schedules that also permit them to decide where they want to work.

Additionally, 45% would like their employer to help them get the most value from their benefits, and 59% would like all their benefits to be displayed on a single website. Fifty-three percent want tools to help them understand their choices, and 49% want the ability to speak with a benefits specialist when making decisions.

“The pandemic and its economic impact have strengthened Americans’ desire for greater financial security as well as flexibility, and many are looking to their employers for help,” says Steve Nyce, senior economist at Willis Towers Watson. “At the same time, benefit costs have become a sensitive issue. Employees are paying more for benefits, which, in turn, is squeezing their take-home pay, and they need to find ways to lower or stabilize their costs.”

Jill Knoke, health and benefits outsourcing leader at Willis Towers Watson, adds: “Many employees have concerns about the cost of benefits and are looking for assistance from their employers. While providing meaningful choices and decision support tools are not new solutions, they’re a good place for employers to start. By reinvesting in benefit technology and communication, employers can move the needle and help employees better understand their benefit choices, manage costs and, ultimately, optimize the value of their benefits.”

Willis Towers Watson conducted the survey of 4,898 U.S. workers in the first half of October.

Compliance January 22, 2021

DOL Has a Bone to Pick With DST Systems ERISA Lawsuit Settlements

Secretary of Labor Eugene Scalia is fighting his own lawsuit about the matter and objects to a provision in the settlements that would bar him from litigation.

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Settlements to resolve two lawsuits alleging mismanagement of investments in the DST Systems Inc. profit sharing and 401(k) plans were recently presented to a federal court.

The plans included investments in the Sequoia Fund, distributed and advised by Ruane, Cunniff & Goldfarb & Co. The lawsuit alleged that the defendants in the suit failed to diversify the Sequoia Fund and, rather than minimize the risk of large losses, allowed the fund to hold large amounts of Valeant Pharmaceuticals stock.

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But Judge Andrew L. Carter Jr. of the U.S. District Court for the Southern District of New York is also presiding over a lawsuit filed by Secretary of Labor Eugene Scalia against Ruane, Cunniff & Goldfarb, and Scalia takes issue with a condition in two of the settlement agreements.

According to a letter to Carter from attorneys in the Scalia case, the proposed preliminary approval orders from the parties in the DST cases include the following provision: “The court preliminarily enjoins and bars … the secretary … from bringing or prosecuting in any forum any claim that arises from, relates to or is connected with … the conduct alleged in a complaint or demand filed in any related proceeding and any subsequent pleading or legal memorandum filed in any related proceeding; [and] … the plan (including, without limitation, the selection, retention and monitoring PSP [profit sharing portion of the plan] investments, the performance, fees, and any other characteristic of the PSP).”

Citing case law, the attorneys say, “The ERISA [Employee Retirement Income Security Act] enforcement scheme, carefully constructed by Congress, is undermined if private litigants can sue ERISA violators first, reach a settlement, and bar the secretary’s action.” The letter says Scalia “writes to strongly object to any attempt to bind the secretary through the injunctive provisions in the proposed settlement agreements and related proposed orders filed in the above-captioned cases.”

The attorneys point out that Scalia is not a party in the two cases or to the proposed settlement agreements, and he has not communicated any endorsement of the proposed settlements. “Nevertheless, the parties have improperly conditioned their proposed class action settlement agreements on enjoining the secretary from litigating his claims in his related case.”

The letter reminds the judge that the secretary of labor has “primary enforcement and regulatory authority for the fiduciary responsibility provisions in Title I of ERISA.” The attorneys are asking that Carter reject the injunctive provisions in the settlement agreements.

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