The new tax reform law is fueling changes to corporate America’s employee benefits programs – with expanding personal financial planning and boosting 401(k) contributions topping the list, according to a new employer survey by Willis Towers Watson.
Two-thirds of those (66%) surveyed are planning or considering making changes to their benefit programs or have already taken action. The most common changes that organizations have already made or are considering making include:
- expanding personal financial planning (34%);
- increasing 401(k) contributions (26%); and
- increasing or accelerating pension plan contributions (19%).
The survey of 333 large and midsize employers reveals nearly half (49%) of the respondents are considering making a change to at least one of these programs this year or in 2019. Indeed, a number of employers have already announced those changes, including Honeywell, Visa, Nationwide, Aflac, Starbucks and SunTrust Bank.
Other potential changes cited by survey respondents include increasing the employer health care subsidy, reducing or holding flat the employee payroll deduction, and adding a new paid family leave program in accordance with the Family Medical and Leave Act's tax credit available for paid leave for certain employees.
Nearly two-thirds (64%) of employers are planning or considering taking action on their broad-based compensation programs, or have already taken action. The most common changes organizations that have made or are planning or considering include:
- conducting a review of their compensation philosophy (43%);
- addressing pay-gap issues (36%); and
- introducing a profit-sharing or one-time bonus payout to all employees (21%).
About 4 in 10 companies (41%) are either planning or considering changes to their executive pay programs or have already taken action. The most common changes employers have made or are planning or considering including spending more time and analysis on this year’s incentive target (33%) and increasing the use of discretion in 2018 incentive plans (19%).
Willis Towers Watson surveyed 333 large and midsize U.S. companies to determine their plans to invest savings resulting from the change in the corporate tax rate under the tax reform law. The survey was conducted Jan. 10-17.
