A number of factors are increasing the complexity of the concept of retirement. With the recent recession still fresh in many employees’ minds and improvements in overall employee health and longevity, many employees are choosing to stay on the job longer, staggering the age of retirement. Legislation changes have also altered reporting requirements and minimum retirement ages.
While these issues may add difficulty to retirement benefit calculations and reporting, HRIS can help to balance the equation. HRIS can be configured to automate contribution tracking, match payments, and attend to other features as needed for each specific retirement plan so that the burden is not completely left to HR managers.
Why Offer Retirement Options?
Employee expectations are changing as the baby boomer generation eases into retirement faster than the generations beneath shift into the workforce to replace the boomers’ social security contributions, leading employees to rely more heavily on pensions and contribution plans now than in the past. This means that offering great retirement plans can help to give companies a competitive advantage in attracting top talent. While retirement options can be difficult to manage, companies may see clear benefits from offering retirement options as employees perceive a more caring company culture when these options are offered.
Retirement Benefits Enrollment and Education
With the right HRIS and the proper settings, enrollment in retirement benefits can be placed almost entirely in the employees’ hands. Not only can employees enroll in benefit plans online through self-service HRIS, employees can access a variety of information that can help them understand how each plan works, so that informed decisions are made. Using the same self-service options, employees will also have the ability to make changes as needed and view information about existing retirement plans.
To ensure compliance with the portion of the Employee Retirement Income Security Act (ERISA) that requires companies to properly inform employees about all aspects of retirement plans, companies may wish to include a detailed briefing on how to access retirement plan information during orientation. To back up the information that is accessible through HRIS, companies should also assign an in-house expert that can answer employee’s questions or help employees find the information that is being sought in the self-service HRIS.
In addition to helping companies comply with ERISA requirements for accurately informing employees about retirement plan details, HRIS can be used to track investments and contributions with greater accuracy than manual methods, making it much more likely that actual payouts will be accurate and compliant. HRIS can also make it easier for companies to provide reports that may be requested to ensure compliance with legislation.
Third Party Pensions Management
Even if a company utilizes a third party for pension management, an HRIS can help to simplify the process and reduce the need for double data entry. An interface can be established between the HRIS and the third party, so that employees can still have access to all of the information through self-service. The main difference is that employees will rely on the knowledge of the third party consultants instead of an in-house expert when seeking information about retirement plans, which can help to further simplify retirement issues.