By Edward “Ed” V. O’Neal, Senior Vice President and Manager, Retirement PlansPrint This Post
For the initial blog of our series this month on nonprofit entities, we’ll look at the Healthcare marketplace. Healthcare groups have encountered some turbulent times recently, with particular challenges related to healthcare regulatory changes and staffing shortages. Yet, the healthcare market – which includes groups such as hospitals, medical centers, nursing homes, hospices and clinics – continues to experience overall growth and healthcare groups continue to explore effective ways to find and keep qualified staff. To help attract talent, a growing number of healthcare groups are looking for opportunities to enhance their retirement benefit programs to mirror those used in the corporate sector.
Fortunately, healthcare groups have a variety of options when sponsoring an employer retirement plan, including 403(b) plans. In helping to attract and retain qualified employees, a recent survey* found that healthcare groups are increasingly replacing 403(b) and defined benefit plans – which have historically been very popular with these groups – and are instead opting for 401(k) plans (which are more common with corporate employers). Additionally, surveys** show that healthcare groups are becoming increasingly proactive in adopting key retirement plan features and best practices designed to both attract talent and drive employees toward retirement readiness. Some of these best practices include hosting frequent employee retirement and financial educational meetings, offering attractive employer matching contributions, initiating automatic enrollment features and offering a Roth contribution option.
The pending regulatory and economic shifts will likely continue to bring change and volatility to the healthcare sector, and healthcare groups will need to continue to be nimble and thoughtful in creating competitive retirement benefits programs designed to offer important plan features and attract the best talent. Before initiating any employer sponsored retirement program, remember to consult with your tax/legal advisor and investment/financial advisor.
*Retirement Plan Trends in Today’s Healthcare Market (Transamerica)_2017
**Retirement Plan Trends in Today’s Healthcare Market (Transamerica)_2015