Friday, November 28, 2014 06:05am
North Adams, MA now: 27 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
SIGN IN | REGISTER NOW   

Home About Archives RSS Feed
The Independent Investor: Are Fringe Benefits Coming Back?
By Bill Schmick On: 12:32PM / Friday January 18, 2013
Important
0
Interesting
0
Funny
0
Awesome
0
Infuriating
0
Ridiculous
0

Since the Financial Crisis, those who have kept their jobs consider themselves as lucky. That may be so, but at the same time many complain that their benefits have been cut as the price for further employment. There are signs that may be changing.

During 2008, I, like millions of other American workers, attended a mandatory meeting at a former employer. The room was rife with fear and trepidation, since just days before the owner had laid off almost half the company. Instead of more firing, he announced that the company would no longer be providing a match to our employee 401(k) retirement plans. He also reduced the number of paid time off for all of us. His announcement was met with relief that no one else would lose their job.

I'm not sure whether that employer ever reinstated his employees' benefits because I left shortly thereafter. I do know however, that many companies have started to become a bit more generous in what fringe benefits they provide their employees. The employer "match," for example, is making a comeback in some companies, but with a new twist. At that time was a company would match a certain percentage of your own contribution to a deferred benefit plan. Normally the match would range from 3 percent to as much as 6 percent of your yearly contribution.

However, IBM, the business services company with a great reputation for fringe benefits among its corporate peers, introduced a new wrinkle in their employee 401(k) matching compensation this year. Big Blue will still match contributions (and never cut them during the recession), but will now delay its contributions until the end of the year on Dec. 31. They will then pay them in a lump sum. If you leave before Dec. 15, you lose the match. The only exceptions are those that retire that year.

This week, Morgan Stanley, the global brokerage house, announced a variation on that theme. It will defer for up to three years a part of the bonuses for all those who make more than $350,000 and whose bonuses are at least $50,000.  They will also pay those sums in both cash and stock. Although it does not affect the company's financial advisers (brokers) this year, it may be a warning shot about how compensation will be paid in that group in the future. Of course, if you quit prior to the end of those three years, you forfeit any bonus that remains.

In another area, more companies are switching to a "paid time off" (PTO) option rather than the traditional allotment of a certain number of days for holidays, vacation, sickness, pregnancy leave, etc. This gives the employee the option of choosing how many days they can take off from a finite number, whether it is 15-20-30 days or whatever their company decides.

Although this change appears to be in the employee's favor, many companies are nicking away at this benefit in marginal ways. Some companies are limiting the number of days one can carry over from the preceding year while others are reducing the total number of days off that employees enjoyed under the old method.

Of course, the most formidable challenge to employee benefits is yet to come. Obamacare. The Patient Protection and Affordable Care Act, becomes effective in 2014. This year, corporations will have to devise ways to overhaul their employee health care coverage in answer to this new legislation. A couple of firms have already changed their provisions in the health care field. They are opting for what has been termed "Employee Choice" plans.

This plan will give each employee a fixed sum of money (indexed to the rate of yearly inflation) and allow them to choose their own medical coverage and health insurer in an online marketplace.

The employees, according to at least one of the companies, will be paying roughly the same out-of-pocket contributions under the new plan as they did in the old one. They claim the new approach will allow the employee to spend as little or as much on their health care as they think wise. The fear among opponents of this approach is that with the rising costs of health care, the lump sum won't be nearly enough to cover future health care needs.

All in all, the return of employee benefits has been marginal at best, but it is in the early days right now. As the nation's economy continues to grow and unemployment drops, there may yet come a time when fringe benefits will actually expand as a tool to woo hard to find workers. Right now that may seem like a pipe dream but unless this country is doomed to an eternity of lackluster growth, that day will come.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.


0 Comments
     
News Headlines
Mass MoCA's Festival Field Getting New Features
Guest Column: Keeping Your Pet Safe This Holiday
Thanksgiving Greetings
North Adams Church Welcomes New Pastor & Music Director
Lanesborough Outlines 250th Celebration Calendar
'Dumb and Dumber To': It Sure Is
Williamstown Chamber Executive Director Departing
Selectmen May Seek Peer Review of Dollar General Traffic Study
Oh Be Thankful Pie Auction Raises Funds for Charities
Pittsfield Council Accepts School Budget Law, Denies Hiring Authority Plan

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (151)
Independent Investor (205)
Archives:
November 2014 (4)
November 2013 (2)
October 2014 (9)
September 2014 (5)
August 2014 (7)
July 2014 (2)
June 2014 (6)
May 2014 (9)
April 2014 (8)
March 2014 (6)
February 2014 (6)
January 2014 (8)
December 2013 (8)
Tags:
Greece Fiscal Cliff Debt Currency Federal Reserve Retirement Bailout Recession Crisis Japan Markets Rally Fed Jobs Europe Election Euro Europe Taxes Stocks Energy Economy Debt Ceiling Pullback Oil Selloff Interest Rates Congress Stimulus Banks Stock Market Deficit Metals Housing Commodities
Popular Entries:
The Independent Investor: Understanding the Foreclosure Scandal
The Independent Investor: Don't Fight the Fed
@theMarket: QE II Supports the Markets
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: How Will Wall Street II Play on Main Street?
The Independent Investor: Will the Municipal Bond Massacre Continue?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
Recent Entries:
The Independent Investor: Is There a Doctor in the House?
The Independent Investor: The Pipeline Made Simple
@theMarket: Markets Are in Half Time
The Independent Investor: U.S. and China Square Off
The Independent Investor: Workers Get to Save More in 2015
@theMarket: All Clear
The Independent Investor: The Elephant in the Room
@theMarket: So far, So Good
The Independent Investor: OPEC's Oil Ploy
@theMarket: Are We There Yet?


View All
Abbott School Pie Auction...
Gabriel Abbott Memorial School's annual Oh Be Thankful Pie...
Wahconah Football Reaches...
Salvatore grabbed the ball out of the air and sprinted 95...
Proud Pittsfield Fights to...
Pittsfield’s run in the postseason came to end on Westfield...
McCann Football's Run Ends in...
The McCann Tech Hornets road to Gillette Stadium and a...
Berkshire Chamber Showcase...
The Berkshire Chamber of Commerce held its Business 2...
Berkshire Grown Holiday...
Berkshire Grown held its Holiday Market in Williamstown on...
Wizards at Hoosac Valley
The Harlem Wizards faced off against Hoosac Valley staff...
St. Mary's Church Tour in...
Residents, business people, elected officials and Friends...
Williamstown's Mather House...
Traffic came to halt for several hours Wednesday morning as...
Girls Soccer: Nipmuc vs...
Although the Wahconah girls' season ended on Tuesday, its...
Boys Soccer: Belchertown vs...
Belchertown Downs Mount Greylock Boys in PKs
Football: Pittsfield vs...
Shade himself ended up taking it in from the 1 on third and...
Football: Turners Falls vs...
After completing the first-ever undefeated regular season...
Festival of Trees 2014
The Berkshire Museum kicked off its Festival of Trees...
Farmers' & Artisans' Harvest...
organic and handcrafted goods were sold at the special...
Football: Agawam vs Wahconah
The Wahconah football team was down eight points heading...
Abbott School Pie Auction...
Gabriel Abbott Memorial School's annual Oh Be Thankful Pie...
Wahconah Football Reaches...
Salvatore grabbed the ball out of the air and sprinted 95...
Proud Pittsfield Fights to...
Pittsfield’s run in the postseason came to end on Westfield...
McCann Football's Run Ends in...
The McCann Tech Hornets road to Gillette Stadium and a...
Berkshire Chamber Showcase...
The Berkshire Chamber of Commerce held its Business 2...
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings
Advertise | Recommend This Page | Help Contact Us | Privacy Policy| User Agreement
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2000 Boxcar Media LLC - All rights reserved