October 20, 2022

Sarah Bassler Millar Speaks to PLANSPONSOR About Plan Sponsors’ Benefit Changes

In “Plan Sponsors Are Grappling with Economy, Considering Benefits’ Spend,” PLANSPONSOR turned to benefits and executive compensation partner and practice group leader Sarah Bassler Millar for her insight on plan sponsors’ priorities, particularly in light of open enrollment season.

The publication reported that plan sponsors are grappling with changed economic conditions that have affected their businesses and benefits’ spend. Bassler Millar explained that many are taking a “steady approach” to retirement plan design and expenses. “There’s a hesitation to cut benefits at this point, but that is a strategy some companies have deployed historically in the midst of a recession. It is certainly something we’re anticipating could happen,” she added.

Bassler Millar noted that she sees plan sponsors balancing the need to maintain their position in the marketplace and provide robust benefits—to attract and retain quality employees—with possibly having to cut costs.

The article also shared how employers in some industries like health care that have been dealing with higher-than-normal turnover rates may be less likely to make changes. “In the health care industry, we’re continuing to see some nursing shortages generally, and that is an area where due to the pandemic, there’s a fairly high degree of burnout among caregivers, and that is having an impact on the workforce,” said Bassler Millar. She added companies may consider changing health plan designs, increasing deductibles, instituting cost-sharing arrangements and raising maximum out-of-pocket costs.

According to Bassler Millar, employers are required to provide benefit notices during open enrollment before year-end and distribute annual notices to retirement plan participants. “There are numerous notices that need to be distributed, depending on the type of plan, that often have a December 1 deadline so that they’re distributed 30 days in advance of the new plan year.”

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