PSNC 2016: How the ‘Gig’ Economy Affects Employer-Sponsored Benefit Plans

With Millennials wanting more freedom and older workers wanting to stay in the workforce in some way, how will this impact employee benefits?

The Millennial generation wants more freedom and flexibility for their careers, and older workers either don’t want to or can’t retire, and desire to stay in the workforce in some way, which is creating more freelance, part-time and independent contractor employees.

Speaking at the 2016 PLANSPONSOR National Conference in Washington, D.C., Will Hansen, SVP of Retirement at the ERISA Industry Committee (ERIC), noted that as of May 2016, 15 million workers were self-employed; at the same time, a 2014 study found 53 million workers were freelancing, and it is estimated that by 2020, 60 million workers (40%) will be contingent employees.

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As an example of what “gig” employment looks like, Hansen noted that car-sharing companies such as Uber and Lyft are leading forces. “How to manage these types of workers and provide benefits is an evolving issue. We don’t have the answers yet,” he said.

Tami Simon, global practice leader, Knowledge Resource Center, Buck Consultants, a Xerox company, noted that lower salary and benefit costs is one reason employers like short-term contracts with employees. In addition, they may have project work that doesn’t require a permanent employee and they can be “global without being global.”

Also, as for older workers, with 10,000 people turning age 65 each day, employers are experiencing a brain drain, Simon pointed out. Using freelance or consulting older employees can help them tap into knowledge.

NEXT: How ‘gig’ workers may affect benefit offerings

“How can employers create a benefit package for a workforce that is creating its own ladder?” Hansen queried. Instead of moving up in a company, there will be many lateral moves to different companies. And, Simon noted, many employers question why they should spend money on employees that will not stick around. “But, if they don’t provide benefits for these workers, the country will end up in a big mess,” she said.

“The higher the percentage of contingent workers grows, the offering of traditional benefits may become minimal,” Simon said. She speculated that perhaps these “gig” workers will unionize or use associations to create and participate in retirement plans.

Hansen noted that recent regulations address retirement savings for a gig economy. The Department of Labor (DOL) announced plans to extend opportunities for open multiple employer plans (MEPs), and also proposed guidance for state-run plans for private-sector employees.

As for health benefits, the Patient Protection and Affordable Care Act (ACA) created a public exchange for purchasing health insurance. Hansen speculated that employers may just point workers to the public exchange.

However it plays out, Simon told conference attendees to get ready for the gig economy. “Use analytics for workforce planning. Decide what employees are needed to meet corporate goals, then create a policy to comply with all laws,” she said, adding that the policy should be nimble because it is unsure what the workforce will look like from year to year.

Retirement Industry People Moves

The Segal Group announces new president and CEO; USI Consulting names vice president and actuary; Merrill Lynch staffs new financial wellness role, and more.

The Segal Group Announces New President and CEO

The board of directors of The Segal Group announced that David Blumenstein has been named president and CEO, effective October 1.

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Blumenstein will succeed Joseph A. LoCicero, who has been president and since 2006. LoCicero will continue with the firm as chairman, and Howard Fluhr, president and CEO before LoCicero, and currently chairman, will transition to chairman emeritus, a role also held by another former president and CEO, Robert D. Krinsky.

“David has served in various leadership roles at The Segal Group and greatly contributed to the firm’s success. He has a strong understanding of our business needs in all markets going forward,” said Fluhr.

Blumenstein has more than 27 years’ experience at Segal. He is currently the national director of multiemployer consulting, where he has overseen growth of much of Segal’s business and consulted with multiemployer funds including health plans, defined benefit (DB) pension plans and defined contribution (DC) plans. He also serves on the board of directors.

Blumenstein graduated magna cum laude from the University of Michigan with a Bachelor of Arts in philosophy and subsequently took courses of study at Harvard University and the Center for Creative Leadership. He is a frequent speaker at benefits conferences and other industry forums and a published author on both health care and retirement benefit topics.

The Segal Group is a private, employee-owned consulting firm.

NEXT: USI Consulting Names Vice President and Actuary

David Woodmansee Jr., EA, FCA, MAAA, joined USI Consulting Group as vice president and actuary in the firm’s defined benefit (DB) practice.

Woodmansee has worked for nearly 30 years in the actuarial and defined benefits field and has broad experience in pension consulting—including cash balance transition, early retirement windows, creation of nonqualified plans and helping to develop liability-driven investing (LDI) strategies. Prior to joining USI Consulting, he worked for 16 years as an enrolled actuary at a major insurance company.

Woodmansee is also a regular presenter at the annual Enrolled Actuaries Conference in Washington D.C., a member of the American Academy of Actuaries, a member of the American Society of Pension Professionals and Actuaries, and a fellow in the Conference of Consulting Actuaries.

NEXT: Hyas Group Hires Senior Consultant

The Hyas Group added Ned Taylor as a senior consultant to its institutional plan consulting team. Taylor will be based in Portland, Oregon, and will be responsible for growing and servicing the Hyas Group’s corporate, governmental and not-for-profit plan clientele.

Taylor has experience working with plan sponsor decisionmakers on enhancements in retirement plan participation, deferral increases and strategic education. “Looking at retirement plans from the perspective of optimizing outcomes for participants has been his focus for over a decade and something we are excited about Ned building on at the Hyas Group,” said Jayson Davidson, citing Taylor’s “commitment to client service, his integrity and his expertise.”

Taylor has more than 18 years of experience in the investment and plan design consulting areas. He worked the past 10 years at The Standard and, before that, more than five at Columbia Funds.

He earned a bachelor’s degree from Willamette University in Salem, Oregon, and currently sits on the board of the Portland Chapter of the Western Pension & Benefits Council.

The Hyas Group is a specialized consulting firm, focusing on institutional investment consulting clients.

NEXT: Merrill Lynch Staffs New Financial Wellness Role

Matt Leckrone joined Merrill Lynch‘s retirement and personal wealth solutions group in the newly created role of workplace relationship executive.

As the financial wellness of employees is an increasing focus for companies, Leckrone will partner with Bank of America’s global corporate banking and its clients to build relationships with human resources (HR) executives to deliver a holistic range of benefits, financial planning programs and wealth and banking services, as part of a comprehensive financial wellness program. He will report to Kevin Crain, head of institutional retirement and business solutions.

Previously, Leckrone served as global benefits executive for Bank of America, leading the 401(k), deferred compensation and defined benefit (DB) programs, as well as managing the recognition and reward strategies. Before joining Bank of America, he was a senior consultant at Mercer, where he focused on executive benefits and was the national thought leader in deferred compensation and executive benefits and compensation program design.

Leckrone received a bachelor’s degree from Indiana University – Bloomington. He is an investment actuary and a member of Bank of America’s Retirement Client Advisory Council.

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