Products September 19, 2016

IonTuition Reveals Student Loan Benefits Package

In a recent survey of managers, IonTuition found nearly all saw value in offering their employees benefits such as student loan repayment assistance.
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IonTuition.com, the self-described “education-fintech company specializing in helping borrowers monitor and manage their student loans,” announced a new student loan benefits package that provides employers with an innovative solution to enable employees to better pay off student loans.

In a recent survey of employers, IonTuition found nearly all saw value in offering their employees benefits such as student loan repayment assistance. In fact, according to the firm, 70% of respondents believe that offering such a program would improve morale and retention, while more than 90% of respondents believed that this benefit would decrease stress among their workforce.

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To this end, IonTuition wants to offer employers the option to provide employees with “convenient, automated student loan payments made via payroll deductions, a feature that all respondents agree employees would appreciate.” The IonTuition approach “ensures reliable, on-time, stress-free monthly student loan payments.” Additionally, IonTuition offers a payment contribution system similar to 401(k) contribution programs, which gives employers the ability to accelerate their employees’ student loan repayment through monetary contributions.

Through IonTuition, employees have a clearer picture of their student loans, federal and private, all in one place, along with access to repayment planning tools that simplify complex repayment options and make it easy to work out which repayment plan best suits each user’s unique situation. Additionally, IonTuition has a team of expert student loan counselors standing by to assist with any questions employees might have. Counselors provide one-on-one help, from talking through the basics of student loans to working hand-in-hand with employees to develop a personalized repayment strategy.

More information is available online here. 

Compliance September 19, 2016

PBGC Proposes Expansion of Missing Participants Program

The Pension Benefit Guaranty Corporation is proposing to expand its existing Missing Participants Program to cover terminated 401(k)s and most other defined contribution plans. 
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The Pension Benefit Guaranty Corporation (PBGC) is proposing to expand its existing Missing Participants Program to cover terminated 401(k)s and “most other defined contribution plans and certain defined benefit plans that aren’t currently covered by the program.”

For over 20 years, PBGC’s Missing Participants Program has connected people—missing when their pension plans terminated—to their retirement benefits. Currently, the program is open only to PBGC-insured single-employer plans.

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“Many people associate PBGC with paying benefits for people in failed plans, but our mission is broader than that,” observes PBGC Director Tom Reeder. “We are also responsible for enhancing retirement security for American workers and retirees. One of the ways to do that is to connect them with their retirement savings.”

Under a proposed rule newly floated by PBGC and slated for formal publication in the Federal Register on September 20, 2016, the program would be expanded to cover missing participants in most terminated defined contribution plans, such as 401(k) and profit sharing plans. Perhaps most important, instead of establishing an individual retirement account (IRA) at a financial institution for each missing participant account, these plans would have the option of transferring benefits to PBGC.

“PBGC would then hold the money, add the missing participant to its online searchable database, and periodically search for the participant,” Reeder explains. “Participant accounts would not be diminished by ongoing maintenance fees or distribution charges and would be paid out with interest.”

NEXT: Strong need for such a system

If approved as proposed, PBGC anticipates the expanded program will be implemented in 2018, after receiving public comments and publication of a final regulation.  At present, PBGC explains, a central database of defined contribution participants missing when the plan terminated does not exist, making it difficult for people to find their accounts.

“When implemented, PBGC's expanded program will make it easier for people to locate their retirement benefits after their plan is terminated,” Reeder predicts.

PBGC is also proposing “modest changes” to the way the program works for PBGC-insured single-employer plans. The changes relate primarily to how plans determine the amount of money to transfer to PBGC, better protection of key features of a participant's benefit (e.g., early retirement subsidies), and reducing the burden of transferring benefits to PBGC.

Under the proposal, the expanded program would cover PBGC-insured multiemployer plans that close out and certain defined benefit plans that aren't insured by PBGC (i.e., small plans sponsored by professional service organizations). PBGC expects limited usage by these plans.

“PBGC looks forward to public comments on the proposal so that we can make the program as useful as possible,” Reeder concludes.

For more information on the rulemaking and how to comment, visit the Overview of the Proposed Expanded Missing Participant Program webpage.

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