NEW YORK, September 12, 2024 — WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company, today announced the launch of a groundbreaking new solution that provides employees with expanded choice and flexibility in allocating employer contributions among various financial benefits. The launch of the solution follows a recent IRS Private Letter Ruling.
Under the approved flexible contribution program, for the first time, the requesting sponsor’s Defined Contribution (DC) plan participants can direct employer DC contributions across the DC plan, non-taxable student loan repayments, retiree health reimbursement arrangements (HRA), and health savings accounts (HSA). This is one possible example of the expanding choice and flexibility that employers may be interested in providing employees.
“Many employers have been interested in providing employees with robust choice and flexibility for a long time, but the legal, compliance, tax and administrative challenges associated with an “employee choice” program have been hard to overcome, until now,” said Chris West, DC strategy leader at WTW. “This innovative program allows plan sponsors to more effectively respond to the diverse financial worries of employees by letting individuals direct employer dollars where they need them the most.”
WTW’s DC Strategy team supports employers with developing their unique approach to the flexible contribution DC design, advising on feasibility, cost implications, alignment of vendors and regulatory and compliance requirements. Importantly, they also focus on an effective delivery to employees, including communications and employee choice election administration to ensure a seamless experience.
This solution comes at a time when many employees are craving more benefits choice and flexibility. In fact, WTW’s 2024 Global Benefits Attitudes Survey found more than three in four employees who have choice in their benefits indicate the benefits program meets their needs compared with just 37% of employees who don’t have a choice in benefits.
Moreover, WTW believes this solution can help support employee financial wellbeing. According to the Global Benefits Attitudes Survey, nearly nine in 10 workers are struggling to meet basic living costs while four in 10 are not on the right track with respect to their finances. The program helps individuals and families address financial priorities by allowing employees to allocate dollars where they need them the most.
“We are excited about the value this new approach can provide to employers, employees and their families. For employers, moving away from “one size” benefits can open a competitive advantage in their ongoing battle to attract and retain talented workers. For employees, it gives options on how best to use employer dollars based on their needs and life stage, including paying down student loans. Best of all, the program can be incorporated in a plan sponsor’s existing benefits programs. It’s a win-win-win proposition,” said West.
WTW served as a strategic advisor to the company that requested the groundbreaking IRS ruling and assisted with developing the plan design, aligning the plan’s options with their employees’ needs and addressing the regulatory requirements.
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.
Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you.
