Benefit Plan Trends, Updates: Lessons Learned from IFEBP’s Annual ConferenceBondBeebe
Larry Beebe, CPA
Last week I attended the International Foundation of Employee Benefit Plans (IFEBP) Annual Conference in San Diego, CA. Each year, the IFEBP Annual Conference provides education to trustees, administrators, and plan professionals who work closely with employee benefit plans.
As with every year, each class I attended was an excellent learning experience. Of the many insights I gleaned, the top three take-aways from this year’s conference were:
1. Cost Analysis of Providing Retirement Benefits. Diane Oakley of the National Institute on Retirement Security presented a convincing case as to why defined benefit plans are less expensive than defined contribution plans when providing retirement benefits.While many people are familiar with this cost difference, the numbers are jarring.
Oakley cited research showing that the same benefit could be provided by a defined benefit plan for 12.5% of payroll, while the cost in a defined contribution plan would be almost twice as much: 22.9% of payroll.
2. Data Mining. Bill Einhorn of the Teamsters Funds of Philadelphia and Vicinity showed how data mining can be utilized to help plan trustees and administrators manage the growing costs of health and welfare benefits. Einhorn shared statistics from a health and welfare fund that had been managed with effective utilization of data mining techniques.
Costs for this program had risen only 3.1% annually from 2008 – 2010 compared to an overall annual increase of 10 – 12% nationwide.
In order to most effectively manage costs, it will be imperative for your plan to take advantage of new technology, like dashboards, to manage your data for optimal decisions.
3. Layman’s Terms. As always, the Annual Conference provided a unique opportunity for plan trustees to learn key financial data and information. Jason Russell of Horizon Actuarial Services presented “Actuary Speak,” a session which detailed actuarial terms in a very accessible manner.
One of the most important data points for trustees to understand is the present value of future benefits. Russell detailed the elements that total the present value with a clear, concise explanation of each element.
When trustees and plan administrators ask me for educational resources, IFEBP’s Annual Conference is always one of my first suggestions. You cannot get a better education on employee benefit plans elsewhere and it is essential to keep up with ever-changing industry developments.
Next year’s conference will take place October 20 – 23 in Las Vegas, Nevada. More information is available on the IFEBP’s website athttp://www.ifebp.org/Education/UsAnnual/. Hope to see you there!