Editor's note: This article was originally published in February 2016 and has been updated for accuracy and comprehensiveness.

Organizational change often takes place for the overall betterment of the organization but that doesn’t mean it comes without challenges. Change can be perceived negatively so it is important to skillfully manage these transitions. Here are a few tips for change management:

We’ve compiled a brief compensation and benefits planning and budgeting guide to help your organization make important pay, health care, and benefits decisions this fall and into 2014. The guide summarizes the latest and most important trends we’re seeing related to administering compensation, health care, and benefits, which affect your organization as it plans for 2014.

The end of the year is a great time to review existing documents, systems and HR administrative practices. Here is a 3 step HR guide for year-end.

Most companies have a holiday party for their employees each year. In our 2012 ERC Holiday Practices Survey, nearly three-quarters (73%) of 186 Northeast Ohio organizations surveyed are planning a holiday party for 2012 and the majority (66%) are budgeting the same or more than in 2011.

Planning and organizing employee training for an entire year can be a challenge. That's why we're providing you with a simple worksheet to help you chart and organize the types of training classes that will be offered in a given year, the individuals who will attend those classes, their perceived skill level, and the timing of when they will attend training throughout the year.

Download Worksheet (Excel)

Instructions

Here are some simple instructions:

1. Chart the individuals in your organization under the column "Name" and their corresponding department or position in the second column.
2. List the classes that your organization plans to offer during the upcoming year at the top of the chart.
3. Color code the cells for each individual based on the degree to which each employee needs training in a specific topic area or skill.
4. Within each cell, insert the timing (month or month and day) of when you plan to offer this class or when each employee will attend this class.
5. Insert any relevant comments around the individual.

Budgeting Assistance

Need quotes for particular training programs? Contact Chris Kutsko at (440)947-1286 or ckutsko@yourerc.com. You can also view ERC's full catalog of employee training courses online.

The Department of Labor's final rules under the Employee Retirement Security Act of 1974 (ERISA) start became effective July of 2012. These rules are intended to enhance the transparency of fees and other compensation with service providers. They will help employers and their employees better understand how much their retirement plan truly costs and the value/level of service they are receiving from their vendor/service provider.

Many employers are unaware of their responsibilities as ERISA fiduciaries. Most are neither trained nor skilled to interpret vendor reports, monitor service levels or fees, and ask the probing questions necessary to fulfill their fiduciary duties. Employers may need to retain professional advisors to implement a strategy of compliance and procedural prudence to manage their plans.

Dave Kulchar, Executive Vice President and Director of Retirement Plan Services at Oswald Financial, Inc. explains that there are two phases in the implementation of these rules. He says, "Phase one requires service providers to disclose all costs to plan sponsors beginning on July 1st. Phase two requires plan sponsors to deliver this information to plan participants, effective August 1st."

The new requirements often are explained in a complex manner that are difficult for organizations to understand so we've simplified them to summarize 4 of the most critical action steps you need to take to comply with these new requirements.

1. Make sure you receive the necessary disclosures.

Employers must make sure that they have received all of the required disclosure information from their covered service providers (auditors, record keepers, custodians, actuaries, advisors etc.).  If the required information is not received by July 1, 2012, then the employer has an obligation to request the information in writing. Without the required information in hand, any fees paid to those service providers may be considered prohibited transactions under ERISA and employers can be held liable for civil penalties or excise taxes.

2. Evaluate and benchmark fees from your vendors.

The new rules of 2012 require covered service providers of ERISA-covered defined benefit and defined contribution plans to provide employers with the information necessary for them to evaluate whether fees paid to service providers are reasonable when compared to those paid by other similar plans and determine if any conflicts of interest may impact a service provider's performance under a service arrangement. Information that must be disclosed includes:

• A description of all services to be provided to the plan
• All compensation it expects to receive, including direct and indirect compensations
• The manner in which compensation will be received by the service provider
• A description of whether the services provided are fiduciary services or services under the Investment Advisors Act of 1940
• Information about conflicts of interest

This information will be necessary to evaluate and benchmark their fees against other service providers in the market to determine whether they are reasonable or not, and to understand if the fees are in line with those paid by similar plans. Organizations will need to make sure that they aren't paying unreasonably high fees for their retirement plan's services and document their analysis and review.

Why is benchmarking necessary? As plan fiduciaries, employers must evaluate their providers regularly in terms of their cost and competence to avoid liability, even if they are satisfied with their provider and aren't considering a change. In addition, employers should be wary of simply choosing the least costly service providers and evaluate their competence and level of service to protect themselves from potential liability. 

3. Communicate fees to employees.

Effective August 1, 2012, employers need to communicate and report these disclosed fees to employees participating in the retirement plan. Under these rules, employers are also required to provide ongoing disclosure to plan participants on quarterly statements going forward. It is important to note that this communication is the responsibility of plan sponsors - not plan service providers.

These disclosures must include an explanation of fees and expenses charged or deducted from participants' accounts as well as general information about the plan's structure and operation. "In some cases, employers will need to combine all of the information disclosed by various service providers and vendors in order to communicate it to employees," Kulchar explains.

In terms of how fees should be communicated, Kulchar advises, "Employers must communicate disclosed fees on paper unless they meet the necessary qualifications to disclose them online, which in many situations may be difficult to meet. Also, there is no set format and communications can look different, but fees must be expressed in a flat dollar figure and percentage."

4. Anticipate and answer employee questions.

Employers need to anticipate and answer employee questions about the reports that they distribute on fees. They should be prepared for employees to request assistance in understanding the information being disclosed to them about the fees. Employers should also expect that employees will inquire about why they hired particular service providers and be in a position to justify and explain the fees and expenses that must be disclosed on a comprehensive basis for the first time. They may even consider providing a list of FAQs to employees when this information is disclosed.

"Currently, 72% of employees don't think they are paying anything for their retirement plan. As a result, employers should be prepared to receive and answer questions like 'Is this new?,' 'How long have we being paying this?,' 'Is this competitive?,' 'What's being charged?,' and 'Is this reasonable?,'" says Kulchar.

Although the 2012 legislation changes on retirement plans create new duties and responsibilities for employers, they provide an opportunity for employers to better understand the true costs of their plans and fees paid to providers and help employees better understand their plans as well.

Please note that by providing you with research information that may be contained in this article, ERC is not providing a qualified legal opinion. As such, research information that ERC provides to its members should not be relied upon or considered a substitute for legal advice. The information that we provide is for general employer use and not necessarily for individual application.

Additional Resources

ERC members save thousands on various retirement plan services offered through Preferred Partner, Oswald Financial. These services include waived fees on comprehensive retirement plan reviews and plan design consulting, discounts on Oswald's financial paperless 401(K).

We've compiled a checklist of common year-end HR tasks spanning compliance, benefits, payroll, salary administration, and general HR planning to prepare for 2012. 

Compliance

• Review your policies and procedures and make sure they still apply and/or comply with changes to laws and regulations that occurred throughout the year.
• Conduct an HR audit, preferably with a third-party. Make sure your HR and filing systems are in compliance.
• Review record retention guidelines and dispose of appropriate records before the new year.
• Review job titles and revise job descriptions for employees whose jobs, duties, or roles have changed within the course of the year. Be sure to also check FLSA exemption statuses to make sure these are still accurate.
• Add critical HR filing and reporting deadlines to your calendar. 
• Prepare for any regulatory updates that go into effect January 1.

Benefits

• Make sure that new disclosure requirements and summary plan descriptions for retirement and health plans have been incorporated.
• Revise benefits levels per IRS 2012 limits for defined contribution and benefit plans.
• Review limitations on deferred compensation and check for excess contributions to qualified plans, especially for your highly compensated employees.
• Determine which employees have life insurance over $50,000 to report taxable imputed income for taxable group term life insurance.
• Check social security withheld to determine if an employee exceeded the 2011 limit. If so, make an adjustment or refund.
• Re-evaluate your benefits package, including disability, life, and health insurance policies and obtain competitive bids.
• Remind employees to spend the remaining balances on their flexible spending accounts before the end of the year so that their leftover money is not forfeited. You may consider reminding employees of reimbursable expenses. For a list of these, click here.
• Send COBRA rate increase notifications to COBRA participants, if applicable.

Payroll/Salary Administration

• Make sure employees review their W4s if they have changed their status during the year or anything else that would change payroll withholding.
• Review taxable fringe benefits for W2 reporting, as these must be reflected in payroll for W2 reporting.
• Distribute W2s by the end of January 2012.
• Update employee address, demographic, and emergency information, including municipal information for local tax filing.
• Have salary conversations with each of your employees and provide expected 2012 compensation in writing.
• Issue final year-end paychecks which include year-end bonuses and holiday/overtime pay.
• Adjust payroll to reflect changes in salary/wage adjustments, merit increases, minimum wage increases (note: Ohio minimum wage will increase January 1), and changes to benefits withholding.
• Integrate new federal and state withholding tables. Remember that the temporary payroll changes which went into effect in 2011 are set to expire unless the federal government decides otherwise.

Planning

• Distribute vacation and attendance calendars/planners to your supervisors and managers.
• Determine your organization's 2012 holiday schedule and post or communicate it to employees. 
• Plan, update, and post any critical  company activities or events for 2012.
• Ask supervisors to assess current staffing levels in their departments/teams and submit job requisitions. Also take note of pending retirements, terminations, and expected turnover.
• Conduct a training needs assessment and establish employee training and development plans for 2012. 
• Review employee performance reviews and determine which employees...
• are eligible for promotion
• need additional training or skill development
• require a performance improvement plan
• should be terminated
• Schedule recently promoted supervisors or managers for new supervisor training.
• Plan your most critical projects for 2012. If you don't know what you should focus on, consider conducting an employee engagement survey in the first quarter to uncover areas of the workplace your department could improve.

Additional Resources

HR Project Assistance
For assistance conducting HR and FLSA audits, revising and auditing job descriptions, workforce planning, employee engagement surveys, and a variety of other HR projects, please contact consulting@yourerc.com.

Benefit Plan Audit
Do you have 100 or more employees enrolled in your defined contribution plan(s)? Your plan is required to be audited, and must accompany your 5500 filing. Now is the time to save! ERC members receive a No-Cost 2011 Benefit Plan Audit, and can lock in your 2010 rate for the next five years, through our exclusive partnership with Skoda Minotti. Click here for details!

Employee Handbook Service
As you revise your policies and procedures, keep in mind that ERC and Employer Risk Solutions Company (ERSco) offer a unique and innovative service exclusive to ERC members that provides an employee handbook for private employers that is easy, legally compliant, customized and affordable. For more information about this service, click here.

Training
Schedule your employees for training sooner than later! For a list of training topics offered by ERC, which can be customized to your organization's needs, click here. Or, to register your employee(s) or yourself for an upcoming public training event in 2012 offered in our Workplace Center, click here.

As a business leader, you foot the bill for training, but how do you know you’re getting your money’s worth? You can, and should, rely on your in-house trainers and external suppliers to provide quality, meaningful training. But as the saying goes, you can lead a horse to water…

The good news is…you, as a business leader, are in the ideal position to increase the likelihood that the skills learned in class will transfer to the job. In fact, research suggests 2 of the 3 most important roles related to training are #1 – Manager Before and #3 – Manager After. In other words, what the manager does before and after training contributes most to whether or not the training is ‘transferred’ (a.k.a. applied).

Here are five pretty painless ways to make that happen…

1. Participate. Ask for an executive overview of the training – for yourself and/or the managers of those being trained. The supplier, for example, would spend 30 minutes or so walking you through the program, including key learning points, models or techniques taught, application exercises used to help participants experience and retain the concepts, etc. You would receive a participant workbook and any job aides or handouts. Ideally, the executive overview precedes the training. This gives you the opportunity to request that certain points be emphasized or aligned with current business priorities. It also positions you to reinforce the new behaviors after the training.  
2. Model. Select one aspect of the training that resonates with you, apply it to your role, and start practicing it. It could be anything from using the Situation-Behavior-Impact feedback model, to documenting performance expectations for your direct reports, to starting every company-wide meeting by publicly recognizing a handful of employees who have exceeded goals, to authoring a blog to keep employees ‘in the know’.
3. Reward. Allocate a small sum of money to be used to reinforce the demonstration of behaviors and skills learned in training for 90 days following. Have managers of the participants partner with the facilitators to generate a short list of behaviors/skills to be rewarded. Publicize to participants that managers will be on the lookout to ‘catch’ them doing things ‘right’ and distributing rewards accordingly.
4. Ask. ‘Walk the floor’, asking employees about the training…what they learned, what was most valuable, what they applied, how it worked, etc. Once employees learn they will be held accountable, they will be more likely to put the training to use.
5. Connect. Tie the training to related initiatives, facilitating immediate application. For example, train employees on writing and delivering performance reviews just before they are due, train employees on goal setting at the beginning of the year, train employees on communication and team building at the start of a large organization-wide project, etc. Time the training and ‘tee it up’ by communicating why it’s being offered, why it’s important, and what related activity will immediately follow that calls for those skills. Having a senior leader endorse the training at the beginning of class is a great strategy too.

Leaders are like the media…they ‘tell’ us what to pay attention to and talk about. Take advantage of your role; try out these five easy steps. You will be amazed at how much more value you will get out of your training investment. And, who knows, you may even find a new technique that produces returns for you, too!