Will Scotus Marriage Decision Affect Partner Benefits?

Most employers that offer domestic partner benefits to both same-sex and opposite-sex partners say they are not considering dropping it.

In light of the recent Supreme Court decision legalizing same-gender marriage, Mercer surveyed HR and business professionals about their intentions regarding domestic partner coverage. 

Employers that offer domestic partner coverage to same-gender couples only are more likely to drop it than those offering it to all couples, Mercer found. Of those plan sponsors that offer domestic partner coverage to same-gender partners only, 8% have already dropped it in states that legalized same-gender marriage before the ruling. Another 23% say they will drop it for this year’s open-enrollment period, and another 23% will consider dropping it in two to three years.

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Plan sponsors that offer the  benefit to same-gender as well as opposite-gender partners said they are less likely, at 8%, to drop it this year. Just 4% have already done so in states where same-gender marriage was legal. Twenty-six percent will consider dropping the coverage in the next two to three years. The majority (62%) is not considering it.

Key findings from Mercer’s quick poll are:

  • 55% of those polled offer domestic partner coverage to same-gender as well as opposite-gender couples;
  • 19% offer it to same-gender only; and
  • 25% don’t offer the benefit.

“The decision to drop domestic partner coverage would certainly eliminate the administrative problems that come with offering it,” says Tracy Watts, Mercer’s health care reform leader. “When an employer drops domestic partner coverage, couples will essentially be required to marry or lose coverage. For the couples who prefer not to marry—same-sex or opposite-sex—a change in policy could have far-reaching impact. So employers need to weigh attraction and retention needs as well as organizational culture in the decision.”

Mercer polled 153 HR and business leaders about their intentions regarding domestic partner coverage. Survey results and related commentary can be found on Mercer’s health care reform blog.

Measuring Plan Health Can Boost Retirement Readiness

MassMutual publishes book on improving plan outcomes.

MassMutual Financial Services has published an electronic book for plan sponsors and advisers to help them improve retirement plan outcomes. Titled “Precisely, Driving Greater Retirement Readiness through MassMutual’s PlanALYTICS,” it is based on the firm’s two-year-old analytics program to measure retirement readiness at both plan and participant levels.

Through PlanALYTICS examination of year-end 2014 data, MassMutual discovered that 45% of retirement plan participants will not be able to continue their lifestyles in retirement. MassMutual bases its assessment of whether a person is on track for a comfortable retirement on a benchmark of replacing at least 75% of pre-retirement income and retiring at 67, the age at which most people qualify for full Social Security benefits.

Una Morabito, senior vice president, relationship management at MassMutual, says that while 54.4% of plan participants are on target for retirement, that could rise to 69.4% if employers adopt automatic enrollment and automatic deferral increases, and encourage savings by offering an employer match.

MassMutual’s data from March 31, 2013 to December 31, 2014 found that participants at employers who participated in the PlanALYTICS program increased their deferral savings rates by 17.1% compared to 1.1% of those not enrolled in the program. And their retirement savings balances rose by 33.8%, compared to 15% for those not enrolled.

Employers who participated in PlanALYTICS were more likely to adopt automatic enrollment than sponsors who were not in the plan (57% versus 18%) and were also more likely to embrace automatic deferral increases (30% versus 11%). Other improvements they adopted, Morabito says, were incorporating target-date funds, and making use of employee education campaigns through direct mail, email, group seminars and one-on-one education.

“PlanAYLTICS is an important tool for plan sponsors to manage the effectiveness of their retirement plans,” Morabito says. “When you combine the analytical data with prescriptive design enhancements and action steps, retirement plan sponsors and participants can realize real improvements over time. It’s all about retirement readiness.”

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The release of MassMutual’s e-book comes on the heels of a survey by the Defined Contribution Institutional Investment Association that found before using auto enrollment, nearly 50% of plans had 75% or lower participation rates. After auto enrollment, only 20% had 75% or less participation rates.

Sponsors and advisers can download the e-book here.

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