Compliance June 21, 2016

EEOC Provides Sample Notice for Wellness Programs

Under final wellness program rules, employees must receive a notice describing what information will be collected as part of the wellness program, who will receive it, how it will be used, and how it will be kept confidential.
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The U.S. Equal Employment Opportunity Commission (EEOC) has posted on its website a sample notice that will help employers that have wellness programs comply with their obligations under a recently issued Americans with Disabilities Act (ADA) rule.

The rule says employer wellness programs that ask employees about their medical conditions or that ask employees to take medical examinations (such as tests to detect high blood pressure, high cholesterol or diabetes) must ensure that these programs are reasonably designed to promote health and prevent disease, that they are voluntary, and that employee medical information is kept confidential.

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Limited financial and other incentives are permitted as part of voluntary wellness programs under the rule. However, employers may not require employees to participate in a wellness program; may not deny or limit their health coverage for non-participation; may not retaliate against or interfere with any employee who does not want to participate; and may not coerce, threaten, intimidate or harass anyone into participating.

Employees also must receive a notice describing what information will be collected as part of the wellness program, who will receive it, how it will be used, and how it will be kept confidential. If the wellness program provides the notice, the employer must still ensure that their employees receive it.

The obligation to provide the notice goes into effect on the first day of the plan year that begins on or after January 1, 2017, for the plan that an employer uses to calculate the incentive limit.

The notice is available at https://www.eeoc.gov/laws/regulations/ada-wellness-notice.cfm, and a brief question-and-answer document describing the notice requirement and how to use the sample notice is available at https://www.eeoc.gov/laws/regulations/qanda-ada-wellness-notice.cfm.
Data and Research June 21, 2016

Women Need More Savings for a Dignified Retirement

Aon Hewitt projects that women will need 11.5 times their final pay to be able to live a dignified retirement, compared to 10.6 times final pay for men.
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When it comes to participating in a 401(k) plan, 79% of both men and women do so. However, when it comes to saving enough, both men and women fall down on this point, though the outlook for women is bleaker.

An analysis of 3.5 million participants by Aon Hewitt found 83% of women are not saving enough for retirement, compared to 74% of men. Aon Hewitt projects that women will need 11.5 times their final pay to be able to live a dignified retirement, compared to 10.6 times final pay for men. Aon Hewitt discovered a 3.3 times pay gap for women in order to retire at age 65, but a 2.0 times pay gap for men. This means that women will have to work until age 69 in order to have enough to retire adequately.

Women are saving an average of 7.5% of their salary, compared to 8.7% for men. Women have an average account balance of $71,060, compared to $119,150 for men.

Aon Hewitt suggests employers take steps to help people better prepare themselves for retirement, starting with education about budgeting and debt management, so that they have more money available to set aside. The firm also suggests that employers adopt target-date funds or managed accounts and pair that with professional advice. Finally, the firm recommends using automatic enrollment and escalation at higher rates than what is currently the norm, such as automatically enrolling people at 6% of their salary.

“Women face significant stumbling blocks when it comes to saving enough for retirement, including longer lifespans, lower salaries and a greater likelihood of taking hardship withdrawals from their 401(k)s,” says Virginia Maguire, director or retirement products and solutions at Aon Hewitt. “Making retirement and financial wellbeing a priority is paramount for overcoming those challenges.”When it comes to participating in a 401(k) plan, 79% of both men and women do so. However, when it comes to saving enough, both men and women fall down on this point, though the outlook for women is bleaker.
An analysis of 3.5 million participants by Aon Hewitt found 83% of women are not saving enough for retirement, compared to 74% of men. Aon Hewitt projects that women will need 11.5 times their final pay to be able to live a dignified retirement, compared to 10.6 times final pay for men. Aon Hewitt discovered a 3.3 times pay gap for women in order to retire at age 65, but a 2.0 times pay gap for men. This means that women will have to work until age 69 in order to have enough to retire adequately.

Women are saving an average of 7.5% of their salary, compared to 8.7% for men. Women have an average account balance of $71,060, compared to $119,150 for men.

Aon Hewitt suggests employers take steps to help people better prepare themselves for retirement, starting with education about budgeting and debt management, so that they have more money available to set aside. The firm also suggests that employers adopt target-date funds or managed accounts and pair that with professional advice. Finally, the firm recommends using automatic enrollment and escalation at higher rates than what is currently the norm, such as automatically enrolling people at 6% of their salary.

“Women face significant stumbling blocks when it comes to saving enough for retirement, including longer lifespans, lower salaries and a greater likelihood of taking hardship withdrawals from their 401(k)s,” says Virginia Maguire, director or retirement products and solutions at Aon Hewitt. “Making retirement and financial wellbeing a priority is paramount for overcoming those challenges.”

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