At my last SHRM chapter meeting, I found myself engaged in conversation with several HR managers who were responsible for managing their companies’ retirement plans. I was surprised to discover that none of the professionals at my table were aware of how dramatically employee benefit plans have changed over the past 50 years.
Back in 1974, the Employee Retirement Income Security Act (ERISA) established reforms to protect employee pensions in the United States.
But employee benefit plans have changed dramatically since then. Unless you know how to navigate the small print, ERISA rules can actually limit retirement plan options. My table mates were surprised to hear about some of the changes.
“I’m not going to suggest that anyone else here is over 50,” I joked diplomatically, “but trust me; changes happen! Here’s what’s happened in the world of retirement planning:”
- Social Security and retirement plans now account for 66% of pre-tax income at retirement.
- By 2023 over 67% of private industry workers had access to defined contribution plans (e.g. 401K)—four times more than pension plans.
- 85% of workers have access to a retirement plan in companies of over 500 employees. But that drops to 52% for companies with less than 50 employees.
- Only 37% percent of the lowest wage workers have access to a retirement plan
Playing the new game by the old rules can lead to penalties, problems, and missed opportunities.
Why not ask the experts at Concierge Retirement Planning Consultants to create a custom plan that follows the rules, protects you and your employees, and maximizes opportunity?