A life planning account is the shiny new benefit on the block
- A new form of employee benefit called a life planning account is on the horizon, according to the Washington Post. Employers fund these taxable accounts, which workers then use for approved expenses like home mortgage closings, college savings, student loans and gym memberships.
- Life planning accounts are examples of the kinds of high-premium perquisites employees value, especially millennials. Most plans restrict the use of funds for expenses involving tax or legal issues, such as healthcare plans and 401ks.
- Companies that provide life planning accounts generally set aside between $500 to $2500 a year for them. Many employers want the plans but are waiting a year or two before offering them. The need to adjust their HRMS to accommodate the new plan could account for the delay, notes the Post.
Life planning accounts aren’t for all companies. Many employers do like the idea of offering benefits that workers can associate with their lifestyle expenses. But employers with limited resources often can’t afford what seems like extravagant perks.
Companies also most consider whether life planning accounts are fair to all employees. Benefits that appear to favor certain segments of the workforce, typically higher paid workers over lower paid workers, might trigger “class warfare” disputes.