Michelle Capezza, Member of the Firm in the Employee Benefits and Health Care & Life Sciences practices, in the firm’s New York office, authored “Recovering Retirements and Making Sense of Employer-Provided Retirement Benefits in a Changing World,” a chapter in the New York University Review of Employee Benefits and Executive Compensation.
Following is an excerpt (see below to download the full version in PDF format):
The COVID-19 pandemic, which most fully revealed itself in the U.S. in mid-March, brought organizations around the globe to a halt. As government orders were issued in the U.S. to close businesses and shelter in place, many employers who had not previously permitted telecommuting had to transition to remote working arrangements overnight. Many employers also had to deploy furloughs, layoffs and separations from employment to stay afloat, while others re-configured their businesses, requiring employees to provide new services or make new products. As a result, many members of the U.S. workforce faced, and continue to face, an uncertain future regarding their jobs. Yet, even before the pandemic, the employer-employee relationship and the meaning of a “workplace” was already evolving in the “gig” (or “sharing” or “on-demand”) economy. Further, shifting worker models caused by advances in automation, and the impact of artificial intelligence on the future-of-work, was garnering attention and fostering debate regarding the availability of future jobs and the skills that would be required in order to obtain them. This confluence of events and technological advancements follow an already growing debate regarding the availability of a social safety net for U.S. workers, the security of retirements, and access to affordable health care.
As employers execute their Return-to-Work plans and re-open their businesses, they will have numerous compliance issues related to their employer-sponsored benefits programs to ensure that the changes they made as a result of the laws and guidance that were issued during the height of the pandemic are accurately reflected in plan operations and documentation. Plan sponsors will re-group and determine how their programs can be enhanced or re-designed in response to the near-term workforce changes. In addition, they must consider the long-term view in an ever-changed world and endeavor to make sense of the manner in which employer-sponsored benefits are provided to truly attract, motivate and retain talent. This article seeks to identify key considerations for the long-view with regard to defined contribution retirement plans and the related programs which will enable employees to more effectively save for their retirement years.