Benefits May 5, 2017

Employers Not Taking Full Advantage of Benefits Technology

Only 22% take advantage of technology for benefits education and communication, according to a survey from LIMRA.
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Nearly half of employers use technology for benefits enrollment, yet few (22%) take advantage of technology for benefits education and communication, LIMRA research finds.

However, 41% of employers who do not have technology for benefits communications say they are interested in adding it in the future.

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The survey finds 47% use technology for annual open enrollment and 42% use it for enrollment of new hires. Thirty percent use it for benefit administration.

According to LIMRA, many factors influence a company’s use of technology, with size being the biggest. Other factors that play a role in the use of technology include:

  • age of workforce,
  • how long the company has been in business,
  • location of the company, and
  • the type of industry.

The study finds satisfaction rates are high for almost every type of human resources technology. Employers are more satisfied with their benefits enrollment or administration technology if it is able to handle all of their benefits on one platform. Additionally, satisfaction seems to increase as companies add more benefits technology functions, including enrollment, administration, and communication.

However, nearly one in four employers are still interested in switching to a new benefits platform. They would be most likely to switch to obtain a better price or improved data security.

LIMRA conducted an online survey in December 2016 of 1,403 private employers with 10 or more employees that offered insurance benefits and have been in business for at least three years.
Compliance May 5, 2017

Dodd-Frank, Fiduciary Rule Repeal Progresses in Congress

A bill that would repeal much of the Dodd-Frank Wall Street Reform Act and block the DOL fiduciary rule has cleared the House Financial Services Committee. 

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The Financial Services Committee has approved the CHOICE Act for consideration by the full House of Representatives, a move considered by some to be the first real step towards Congressional repeal of Dodd-Frank regulations and the Department of Labor (DOL) fiduciary rule.

The legislation is sweeping and would undue or replace much of the Dodd-Frank Wall Street reforms adopted by Democrats when they held significant majorities in the wake of the 2008-09 financial crisis.

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Interestingly, in the executive summary of the CHOICE Act published by the Republican members on the Financial Services Committee, there is only one very brief, single-bullet-point mention of the DOL fiduciary rule—and this bullet point comes at the very end of the document. It is probably too much to read into that symbolic detail, but the CHOICE Act’s impact on the DOL fiduciary rule, and even on particular elements of Dodd-Frank, could potentially be renegotiated by the full House and Senate.

In the actual text of the legislation there is more detail about how the fiduciary rule will be treated. The CHOICE Act seeks to “repeal the DOL’s fiduciary rule and require the Securities and Exchange Commission (SEC), before promulgating any such rule, to report to the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs on whether retail customers are being harmed because broker/dealers are held to a different standard of conduct from that of investment advisers; alternative remedies will reduce any confusion and harm to retail investors due to the different standard of conduct; adoption of a uniform fiduciary standard would adversely impact the commissions of broker/dealers or the availability of certain financial products and transactions; and the adoption of a uniform fiduciary standard would adversely impact retail investors’ access to personalized and cost-effective investment advice or recommendations about securities.”

Additionally, the SEC’s chief economist is “required to support any conclusion in the report with economic analysis.” Finally, it requires the DOL, “if it promulgates a fiduciary rule under ERISA, to substantially conform it to the SEC’s standards.”

NEXT: Financial institutions want CHOICE

Among the advocacy groups and lobbying organizations to commend the progress of the CHOICE Act is the Financial Services Roundtable (FSR), which called the advancement of the legislation “an important first step to improving the regulatory system and promoting economic growth.” FSR signaled it “supports many of the provisions in the Act.”

“Improvements to financial regulations can lead to economic growth, while still protecting taxpayers and consumers,” argues FSR CEO Tim Pawlenty.

In commentary shared with PLANADVISER, Pawlenty explains his group “strongly supports applying a best interest standard to all persons providing personalized investment advice and guidance to all retail investors, not just for advice related employee benefit plans, individual retirement accounts (IRAs) and other entities treated as plans for purposes of the Code—retirement investors.”

However, “for the sake of clarity and transparency,” FSR argues the regulation and oversight of investment advisers, broker/dealers and others engaged in providing personalized investment advice about securities to retirement investors “should be the primary responsibility of the Securities and Exchange Commission.”

Pawlenty further argues the SEC “has the expertise, knowledge and authority to most effectively and efficiently coordinate the myriad of applicable laws and regulations pertaining to such investment activities. State insurance authorities should also take the lead on the regulation of annuities and insurance products, including life insurance companies and their agents or distributors.”

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