Outsourcing offers another path to
efficient benefits administration. Twentyseven percent (27%) of respondents
report that their companies have
outsourced administration of benefits
such as disability or life insurance,
and another 49% say their companies
are likely to do so within the next two
years. One in five (20%) have already
outsourced management of the Family
and Medical Leave Act (FMLA), with
another 45% saying their companies are
likely to outsource in the future. (See
Figure 10)
To help meet the challenge of the rapidly
rising expense of providing healthcare
coverage, 80% of respondents have
either shifted more healthcare costs
to employees (22%), or think their
companies are likely to do so (58%). The
majority of respondents (57%) say they
are unlikely to stop providing employerpaid health coverage altogether, in
favor of directing employees to the new
public exchanges that are now available
for health insurance. However, 28% of
respondents appear to be giving serious
consideration to altering their current
healthcare offering and instead providing
subsidies for employees to use private
health insurance exchanges. (See Figure
11)
expansion of liability-driven investment
(LDI) strategies as a means of dampening
the volatility of DB plan investments,
either as an initial step toward the ultimate
transfer of liabilities, or as a sound risk
management strategy in itself.
In the face of a perceived upward trend
in retirement ages, finance executives are
also considering ways to enhance DC
plans to deliver better outcomes for their
employees. Including options such as
stable value funds and guaranteed income
products in DC portfolios can help
employees better cope with an uncertain
stock market. Over the five years the
Prudential/CFO Research survey has
been fielded, finance executives have
exhibited a growing appreciation of these
kinds of offerings.
They also show an ongoing
interest in the expanded
use of voluntary benefits,
which allow employees to
select the types of benefits
they seem most important.
Finance executives
continue to explore options
for dealing with the steeply
rising costs
Transitioning from Awareness
to Action in Retirement and
Benefits Programs of healthcare, in
In summary, the 2014 survey finds that
finance executives are closely examining
a variety of solutions that can help them
enhance benefits offerings while still
allowing them to manage the financial
risk of the programs.
For their DB plans, more finance
executives, as well as the boards they
report to, are examining the feasibility
and benefits of liability transfer—that is,
purchasing annuities at some point in
the future to transfer some or all of their
companies’ DB plan liabilities to a third
party insurer. Many see the adoption or
particular. With
the advent of both
private and public
health insurance
exchanges,
executives are
given another
resource to
evaluate in
their efforts
to optimally
balance
corporate
expense and
employee
benefits.
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