COMPENSATION, RETIREMENT AND BENEFITS TRENDS REPORT · 2018-01-25 · COMPENSATION, RETIREMENT AND BENEFITS TRENDS REPORT Troy Thomas, Senior Relationship Manager Rena Somersan,

For Financial Professional Educational Use Only

COMPENSATION,

RETIREMENT AND BENEFITS

TRENDS REPORT

Troy Thomas, Senior Relationship Manager

Rena Somersan, Managing Principal, Compensation Consulting Services

2017/2018 EDITION

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Agenda

CRB Survey Demographics

Compensation Practices

Retirement Plans

Health and Welfare Benefits

Questions

Wrap-up

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DEMOGRAPHICS

2017/2018 Compensation, Retirement and Benefit Trends Report

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Demographics

Key Definitions

Northeast New England: Connecticut, Maine, Massachusetts,

New Hampshire, Rhode Island, and Vermont

Middle Atlantic: New Jersey, New York, and

Pennsylvania

Midwest East North Central: Illinois, Indiana, Michigan, Ohio,

and Wisconsin

West North Central: Iowa, Kansas, Minnesota,

Missouri, Nebraska, North Dakota, and South Dakota

South South Atlantic: Delaware, District of Columbia,

Florida, Georgia, Maryland, North Carolina,

South Carolina, Virginia, and West Virginia

East South Central: Alabama, Kentucky, Mississippi,

and Tennessee

West South Central: Arkansas, Louisiana, Oklahoma,

and Texas

West Mountain: Arizona, Colorado, Idaho, Montana,

Nevada, New Mexico, Utah, and Wyoming

Pacific: Alaska, California, Hawaii, Oregon,

and Washington

Note: Not all respondents provided demographic information.

35%

27%

17%

6%

15%

Full-Time Equivalent (FTE's)

<100

101-250

251-750

751-1500

>1500

18%

55%31%

27%

Location

Northeast

Midwest

South

West

N=297

N=289

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7%

2% 2% 2%

10%

2%

11%

5%

16% 16%

7%

2%

4%

3%

1%

11%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Organizations by Industry

Demographics

N=295

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COMPENSATION

PRACTICES


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Total Compensation Philosophy

11%

19%

33%

25%

79%

57%

62%

67%

5%

6%

1%

1%

5%

19%

4%

7%

0% 20% 40% 60% 80% 100%

Base Salary

Incentive Compensation

Health & Welfare Benefits

Retirement Benefits

Position above market Position at market Position below market No formal philosophy

QUESTION: What is your organization’s total compensation philosophy

When considering which areas of the Total Compensation philosophy to differentiate, the greatest emphasis is placed on Health &

Welfare Benefits or Retirement Benefits to be at levels above the market.

N=164

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Salary Structure

QUESTION: Do you have a formal salary structure (i.e.,

ranges with a minimum and maximum) to manage

compensation across levels within the organization?

A slight majority of organizations utilize a formal salary

structure with grades (minimums, midpoints and

maximums) to manage compensation. The Healthcare

and Not-for-Profit industry sectors are far more likely than

other industry groups to have a formal salary structure to

manage their compensation investment, as are larger

organizations with more than 1500 employees.

N=299

57%

43%

Yes No

QUESTION: Do you have a formal salary structure (i.e., ranges with a minimum and maximum) to manage compensation

across levels within the organization?

Overall 100 or Fewer 101-250 251-750 751-1,500 1,500 or More

Yes 57% 37% 54% 76% 61% 84%

No 43% 63% 46% 24% 39% 16%

Base 299 100 79 49 18 43

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RETIREMENT PLANS


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Outside Advisor Involvement

QUESTION: How long have you been working with

the same outside advisor?

Over 55% of respondents have been working with the

same advisor for more than five years, with only 4%

reporting they do not work with an outside advisor.

55%

26%

6%

4%10%

More than five years

Between one and five years

One year or less

We don't work with an outside advisor

Don't know

N=299

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78%

71%

65%

17%

19%

53%

68%

2%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Plan Design

Fee Analysis and Benchmarking

Investment advisor - co-fiduciary (ERISA 3(21))

Investment advisor with full decision making authority (ERISA 3(38))

Investment advisor who is not a fiduciary

Vendor Review and Monitoring

Participant Education

Other

Retirement Services with Outside Advisors

QUESTION: Please select the types of retirement plan services for which you engage an outside advisor. (Select all that apply)

In 2017, plan sponsors were relying most on assistance from third-party advisors for plan design, fee analysis and benchmarking

and for participant education.

N=234

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Evaluating Retirement Plan Services

QUESTION: Which of the following factors is MOST important in evaluating retirement plan offerings? (Please rate by level of

importance, with 1 being the most important and 6 being the least important)

In 2017, one-third of employers focused most on the level and quality of services offered. The cost of investments follow close

behind in importance to employers.

23%

16%

33%

5%

17%

11%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Cost of Investments

Cost of Service

Level/Quality of Service

Number of Investment Options

Reputation of the Provider

Recommendation of Advisor

Note: can have multiple factors as "MOST" important.N=296

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16%

2%

5%

28%

49%

0% 10% 20% 30% 40% 50%

Yes, already use provider for 3(16) administrative fiduciary services

Yes, considering this for next year

Yes, considering this for future

No, and not considering for the future

Don't know

3(16) Administrative Fiduciary

QUESTION: Would the services of 3(16) administrative fiduciary be of interest to you?

In 2017, plan sponsors used a provider for 3(16) services in 16 percent of organizations with 5 percent considering for the future.

N=276

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91%

11%

2%

3%

10%

3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Defined Contribution

Defined Benefit - Traditional

Defined Benefit - Hybrid

ESOP - Employee Contribution

ESOP - No Employee Contribution

Simple

Retirement Plan Options

QUESTION: What type of qualified retirement plan(s) do you offer?

The results of the 2017-2018 survey are consistent with past findings, showing the large majority (91%) of employers offer a defined

contribution plan.

N=285

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Retirement Plan Automatic Enrollment

QUESTION: Does your plan have an automatic enrollment feature?

Close to half (49 percent) reported that their plan currently has an automatic enrollment feature, with an additional 17 percent of

those not currently utilizing automatic enrollment either planning to add the feature next year, or considering it for the future.

49%

1%

16%

33%

0% 10% 20% 30% 40% 50% 60%

Yes

No, but planning to next year

No, but considering for the future


N=299

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Retirement Plan Automatic Enrollment by Industry

QUESTION: Does your plan have an automatic enrollment feature?

Overall

Manufacturing,

Distribution,

Utilities,

Technology, &

Transportation

Not-for-Profit,

Education, &

Government

Construction &

Real Estate

Other Services,

Professional

Services,

Restaurant, &

Retail

Finance,

Banking, &

Insurance Healthcare

Yes 49% 55% 43% 64% 40% 49% 64%

No, but planning to

next year1% 3% 2% 0% 0% 0% 0%

No, but considering for

the future16% 20% 28% 0% 13% 14% 9%

No, and not considering

for the future33% 22% 27% 36% 47% 37% 27%

Base 299 69 60 22 68 43 33

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Retirement Plan Automatic Escalation

QUESTION: If you have or are planning to add an automatic enrollment feature, will your auto enrollment include an automatic

escalation feature?

Slightly over one-third of respondents whose plans have an automatic enrollment feature, also have an automatic escalation feature

(38 percent) with over 22 percent considering for the future.

38%

1%

22%

41%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Plan has automatic escalation

No, but planning to add next year


No, not considering for the future

N=200

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Retirement Plan Automatic Enrollment

and Escalation Benefits

QUESTION: If "yes" for automatic enrollment and/or

automatic escalation, how effective have these features been

in increasing participation and savings?

When evaluating the benefits of automatic enrollment and

escalation approximately 90% of organizations found those

actions to benefit participation and savings.

60%

30%

5%

4%

Highly Somewhat

Not Very Not at all

N=73

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Retirement Plan Matching Contributions

QUESTION: Does your company offer matching contributions?

Over three-quarters of organizations currently offer matching contributions. An additional 3 percent reported they are considering

adding one in the future.

77%

9%

0%

3%

17%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Yes, qualified

Yes, non-qualified

No, but planning to next year



N=289

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Retirement Plan Contribution

QUESTION: How does the projected retirement plan contribution compare to last year? (Please select one)

The large majority (80%) of employers project their retirement plan contribution will remain the same as the previous year. Across

all sizes of organizations and industries though, approximately 14% of employers expect to increase their contribution as compared

to the previous year.

80%

14%

2%

0%

3%

1%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Staying the Same

Increasing

Decreasing

Suspending

Do not match

Do not have a plan

N=287

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33%

67%

Yes No

Non-Qualified Deferred

Compensation Plans

QUESTION: Do you offer a Non-Qualified Deferred

Compensation, Non-Qualified Benefit, or other Key

Person benefit plan?

One-third (33%) currently offer a non-qualified

deferred compensation or benefit program to their

employees. This is a significant increase over last

year when only 24% of companies where offering

non-qualified plans.

Note that use increases significantly and percentages

essentially reverse as organization size grows, with

prevalence at 72% when size exceeds 1,500 FTE’s.

This increase in percentage is consistent with our

non-qualified survey which indicates that 92% of

Fortune 1,500 caliber companies offer deferred

compensation plans.

N=299

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HEALTH AND

WELFARE BENEFITS


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Financial Wellness Programs

QUESTION: Has your company implemented "financial wellness" (financial literacy and education) programs to help employees

prepare for current and future financial needs—whether separately or as part of the overall health and wellness program?

Approximately one-third of organizations (44 percent) have implemented a financial wellness program to help employees prepare for

current and future financial needs with another 26 percent planning to implement financial wellness programs.

44%

26%

29%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Yes, have already implemented

No, but planning to implement

No, no plans to implement

N=289

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QUESTION: Do you offer targeted communications and support for participants by age or life stage? (Select all that apply)

Targeted Communications by Life Stage by FTE’s

Overall 100 or Fewer 101-250 251-750 751-1,500 1,500 or More

Starting out (20-30) 24% 15% 22% 28% 24% 44%

Mid-Career (30-50) 24% 15% 22% 30% 24% 47%

Nearing Retirement (50+) 25% 13% 24% 30% 29% 53%

In Retirement (60+) 13% 9% 13% 13% 24% 23%

We don't offer targeted communication

and support by age or life stage. 72% 84% 74% 68% 71% 44%

Base 289 96 76 47 17 43

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Financial Wellness Program Communication Methods

QUESTION: What is the most effective way to communicate to your employees? (Select all that apply)

While there are a wide variety of methods utilized, the most popular method to communicate and educate on financial wellness has

been onsite meetings with 68 percent and personalized electronic materials for 41 percent.

68%

38%

29%

41%

34%

40%

0%

10%

20%

30%

40%

50%

60%

70%

Onsite groupmeetings

Onsite one on onemeetings

Personalized printmaterials

Personalizedelectronic materials

Generic electronicmaterials

Web-basedinformation

N=289

Questions?

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COMPENSATION, RETIREMENT AND BENEFITS TRENDS REPORT · 2018-01-25 · COMPENSATION, RETIREMENT AND BENEFITS TRENDS REPORT Troy Thomas, Senior Relationship Manager Rena Somersan,