Taking Care of the Caretakers

How can you ease the burden of eldercare—and improve the bottom line? According to a recent survey by Campbell-Ewald Health, a marketing firm, 13 million baby-boomers are at least part-time caregivers of a sick parent, and almost 25 percent of them actually live with that parent. And a Pew Research survey found that two out of every ten baby boomers provide some form of financial assistance to their parents.

What employers can do

Savvy employers can help retain trained workers through a combination of training managers and supervisors to give stressed workers some slack, and providing benefits that allow workers to navigate this difficult part of life.

Eldercare benefits refer to a wide variety of perks employers offer employees caring for older family members. They include:

• flexible work schedules
• resource and referral services from an EAP
• tax-free dependent care spending accounts
• long-term care insurance
• paid time-off programs
• subsidized adult day care

If you offer an Employee Assistance Program, your program probably already provides counseling or referrals to counselors. Those who need emotional support for their eldercare tasks need to know that they can turn to the EAP for assistance. Having someone to talk to can be of great benefit to a stressed caregiver, and may help to keep him or her focused on the job.

Employers can also offer Long-Term Care (LTC) policies through payroll deduction basis for voluntary plans or employer paid. These policies can help employees prepare for the future needs of parents or older spouses. However, some illnesses or disabilities will disqualify an applicant from coverage, so this type of insurance will not likely help someone already dealing with an eldercare situation.

When faced with a workforce containing a significant portion of “sandwich generation” workers, open lines of communication to put together benefits that will keep these valuable workers on the job and help them through this stressful period in their lives. The right benefits can help reduce turnover costs and build employee loyalty.

For more information about how to help your employees with eldercare, please contact us.

Flexible Spending Accounts (FSA)

Since most FSA plans are based on a calendar year, remember to coordinate with your payroll department regarding the 2007 healthcare and dependent care FSA deductions from your employee’s paychecks.

Guide to 2007 Retirement Plan Limits

The new cost-of-living adjustment affecting retirement plans for 2006 compared to 2007 are briefly summarized below. For more information about 401(k)s for your organization, please contact us.

	2006	2007
Maximum Salary Deferrals Limit The maximum amount a participant can defer during a calendar year for traditional 401(k)/403(b) and/or Roth deferrals.	$15,000	$15,500
Catch-up Deferral Contributions For traditional 401(k)/403(b) and/or Roth deferrals.	$5,000	$5,000
Maximum Compensation Limit	$220,000	$225,000
Highly Compensated Employee (HCE) Employee earning more than the applicable amount in the prior year. Compensation test is based on prior year earnings. Regardless of compensation, an employee who owns more than 5% of the company will be considered highly compensated.	$100,000 (Affects HCE determination in 2007)	$100,000 (Affects HCE determination in 2008)
Key Employee Officers who earn over the applicable compensation level will be considered key employees.	$140,000	$145,000
Defined Benefit Maximum Annual Benefit The maximum annual benefit a participant can receive under a defined benefit plan.	$175,000	$180,000
Maximum Annual Contribution Limits The maximum amount of annual additions other than catch-up contributions that can be made on behalf of a participant in a defined contribution plan (includes 401(k) plans).1	$44,000 Or 100% of gross compensation, whichever is less	$45,000 Or 100% of gross compensation, whichever is less
Social Security Taxable Wage Base	$94,200	$97,500

¹Compensation includes salary reductions made to a cafeteria plan, 401(k), etc. The limits apply on the basis of the limitation year (usually the plan year) which ends in the applicable year.  For example, for a plan with a calendar year plan/limitation year, the $45,000 will first apply for the 2007 plan year, but for a plan with a July 01 plan/limitation year, it will first apply for the July 01, 2006 to June 30, 2007 limitation year.

Increasing 401(k) participation

Are you looking to increase participation rates for your company’s 401(k)? A recent study by the TIAA-CREF Institute found a 100 percent employer match increased participation rates about 13 percent. Lower-income workers (making $20,000 or less) responded particularly well to employer matches, increasing participation rates by 19 percent.