Tax reform fueling changes to benefits and comp programs
Tax reform legislation enacted late last year is already fueling changes to corporate America’s employee compensation and benefits programs, according to a new survey by the Willis Towers Watson consulting firm.
The survey of 333 large and midsize employers found that 49% of the respondents are considering making a change to at least one of those programs this year or next.
“The tax reform law is creating economic opportunity to invest in their people programs,” said John Bremen, managing director of human capital and benefits for the firm.
Two-thirds of those (66%) surveyed are considering making changes to their benefit programs or have already taken action as a result of enactment of the Tax Cuts and Jobs Act.
The most common benefits-related changes under consideration:
- Expanding personal financial planning training and services (34%)
- Increasing 401(k) contributions (26%)
- Increasing or accelerating pension plan contributions (19%).
Other potential changes include increasing the employer health care subsidy, reducing or holding flat the employee payroll deduction or adding a new paid family leave program in accordance with the FMLA tax credit written in the tax reform legislation.
Willis Towers Watson researchers found that 64% of employers are considering changes to their compensation systems as a result of tax reform. Those include:
- Addressing pay-gap issues (36%)
- Reviewing executive incentives (33%)
- Introducing a profit-sharing or one-time bonus payout to all employees (21%).