Weekly News Recap: W-2 Reporting; Automated Succession Planning; and Investment Outsourcing
Posted: 03/12/2012 12:00:00 AM EDT | 0
W-2 Reporting for the 2012 Tax Year
The 2012 tax year is the first year of mandatory reporting of the value of coverage under an employer-sponsored group health plan, according to Cammack LaRhette Consulting. This was originally set to take affect for the 2011 tax year, but the Internal Revenue Service (IRS) delayed this until the current year to allow employers more time to prepare for the system.
Now that 2012 is here, there won’t likely be any additional delay, so most plan sponsors must ensure the processes are in place to meet this requirement.
The SBC, SPD, and Plan Documents
In August, the Department of Health and Human Services (HHS) released a Notice of Proposed Rulemaking for Summaries of Benefits and Coverage (SBCs) under the Patient Protection and Affordable Care Act (Affordable Care Act). The proposed rule provides guidance on the information that must be provided to all individuals enrolling in a medical plan on or after March 23, 2012.
According to Cammack LaRhette, SBCs will include:
- A four page (double-sided) Benefit Summary
- “Coverage Examples” that are patterned after the Food and Drug Administration food labels., based on the specific plan’s benefits for three medical scenarios – Maternity, Breast Cancer Treatment and Managing Diabetes
- A Uniform Glossary of medical and insurance terms
A phone number and website where individuals can get additional information including documents such as Certificates, Summary Plan Descriptions (SPDs) and policies
Institutional Funds and Finance
This week, Mercer published their findings from a November 2011 survey conducted of 100 organizations with institutional funds.
Of the organizations surveyed, 57 of these were corporations, 25 were endowments, foundations or hospital systems, and the remainder either professional organizations or government bodies.
Mercer found that 41 percent of respondents with assets below $500 million are considering investment outsourcing. 31 percent of those surveyed with assets in the $501 million to $1 billion range are also considering investment outsourcing. Pension plan sponsors must brace themselves in 2012 or increasing pressure for speed and quality of investment decision-making. Faced with major pension deficits and the requirements of the Pension Protection Act, many major companies have announced large increases in planned contributions to pension plans.
Where HR is concerned, staffing was indicated as a major challenge for most of those surveyed. Approximately 50 percent of the institutions have either one or no full-time staff managing investments, and 89 percent of the respondents have no plans to change staffing levels in the coming year.
“In the corporate sector, companies are facing a dramatic increase in balance sheet deficits in 2012 and beyond, increased income statement expense, and a sizeable increase in cash contributions to their pension plans,” said Tom Murphy, US head of fiduciary management at Mercer. “For endowments, foundations and hospitals, the problem is often the complexity of many investment decisions and a lack of resources. Given these factors, a delegated option should look very attractive to a growing number of boards and investment committees.”
According to another Mercer survey, globally, executives are set to receive average base pay raises of 2.5 percent, but this varies greatly by region. For example, executives in Asia-Pacific areas are receiving five percent increases. Interestingly, CEO positions are not generally receiving salary increases this year. Risk management and control functions are expecting pay increases around three percent, but at the expense of reduced annual incentives.
Automating Performance Appraisals on the Rise
New technologies on the market are helping global organizations to automate their succession planning processes.
One example is Propulsys Inc., a leading manufacturer of hydraulic drive products, selected a new platform to globalize its performance management processes and build an effective succession planning strategy. Propulsys will use emPerform to make sure that company-wide performance expectations are consistently aligned with corporate objectives. They will also use this platform to ensure succession gaps can be identified and addressed quickly and efficiently.
“Succession planning and setting performance goals are critical processes that challenge a manufacturing company every day,” said Larry Dean, Global Director of Human Resources for Propulsys. “Using accurate performance data as a basis for succession forecasting and decision making is critical to our success and will save countless dollars in future training and development.”
Perviously, Propulsys relied on a manual form-based appraisal system for employee performance evaluations, like so many other companies.
“Clearly our processes had to be automated,” said Dean. “Getting an all-in-one solution was a big cost-saver for our company”.
According to Dean, having “simple and consistent evaluation process and a better understanding of how their performance contributes to company goals” is an enormous value addition for the company.
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