FBMC Helps Companies Navigate 401(K) And Retirement Savings Plans In 2022

Tallahassee, Fla. – As employers continue to look for creative ways to attract and retain talent, FBMC Benefits Management, Inc., a Florida-based healthcare and benefits consulting company with more than 40 years of experience, offers insight into a hot-button topic that is trending in 2022. The world of 401(k) and Retirement Savings plans is changing, and FBMC explains how providing expanded financial wellness benefits can be a powerful tool for both big and small businesses.

“A robust 401(k) benefits package offered by employers demonstrates an interest in employees beyond the workplace, proving that they want their employees to retire comfortably,” explains FBMC Retirement Service Manager Jim Matheu. “Knowing their employers have their best interest in mind helps build employee confidence while they’re in the workforce, ultimately leading to more qualified hires and higher retention rates.”

FBMC unpacks three key trends in 2022 that will help employers develop plans to attract new employees and engage current ones: financial education, personalization, and auto-enrollment.

Driving benefits plan enrollment through education. Driving enrollment of financial benefits is often a major challenge for employers. Employees will feel overwhelmed by the options and uncertain which benefits meet their needs. Through its partnership with a firm that specializes in financial planning, FBMC offers additional Financial Wellness benefits designed to support its clients’ employees. The service is available to all employees and helps each individual customize a plan at no additional cost.

In 2021, the savings expectations for comfortable retirement increased 10 percent. Contributing to savings plans as early as possible is vital, and employers can help drive action with clear lines of communication during enrollment that outline available tools and solutions like FBMC’s Financial Wellness program.

Managed retirement savings accounts offer personalization. Rapidly shifting needs have brought personalization of benefits to the forefront over the last few years. Financial benefits that can shift to accommodate those differences will likely see greater enrollment and engagement.

Managed accounts are one way employers can provide personalization with financial benefits. Assets in the managed account category within defined contribution retirement plans more than doubled between 2012 and 2019, and the concept’s popularity continues to grow. These plans are customized for the individual employee, taking into consideration their needs, goals, and financial circumstances. With a financial expert guiding them, employees feel more empowered to invest, and are likely to get more out of their savings, as well.

Proposed legislation will change auto-enrollment and escalation requirements. The Securing a Strong Retirement Act of 2022, or Secure 2.0, that passed in the House in March 2022 will next head to the Senate. If passed, the bill would require most employers to offer auto-enrollment in retirement savings plans at an initial contribution rate of 3 percent, with an automatic escalation of 1 percent annually up to 10 percent.

Auto-enrollment is a proven method of increasing plan participation. Historically, 90 percent of participants will remain in a retirement savings plan once they are automatically enrolled, while 83 percent say they are comfortable with automatic enrollment at a 6 percent rate. As 49 percent of Americans regret not contributing to their retirement sooner, the Act may help make retirement even more enjoyable.

The world of financial benefits is changing rapidly. FBMC’s team helps companies ensure their employees have access to the benefits needed to succeed both in and out of the workplace. For more information about FBMC Benefits Management, Inc., please visit www.FBMC.com.