Insurance giant Aflac is doubling its 401(k) match and adding additional employer-sponsored benefits in addition to what the company says will be a $250 million investment initiative over the next three to five years.
The changes, which became effective this year, include a 401(k) match, from 50% of their first 6% of compensation to 100% on the first 4% of employee contribution, and a one-time $500 contribution to about 5,400 eligible employees’ retirement plans.
Aflac also will offer employer-sponsored hospital and accident insurance plans in addition to its cancer insurance benefit. Previously, the company provided a 50% subsidy on hospital and accident insurance plans as a voluntary benefit.
The benefits investment comes as a result of the new tax reform bill, which lowers the corporate tax rate to 21%, from 35%. Aflac says it will spend about $250 million over three to five years in strategic investments that will grow the company’s business and increase its technological and digital footprint; expanded employee benefits and training programs; and strengthening its commitment to childhood cancer programs.
“We are pleased that these tax reforms provide Aflac with an opportunity to increase our investments in initiatives that reflect our company values; providing for our employees in the long and short term, ensuring future growth for our company and giving back to the community,” says Aflac chairman and CEO Dan Amos. “We will use these funds to help secure healthy retirements, develop employee skills in an evolving global business climate, and provide additional protections for our workers and their families.”
Aflac is one of several corporations that announced bolstered benefits and wages following the passing of new tax reform. Financial services companies Fifth Third Bank, SunTrust Bank, Comerica Bank and Wells Fargo all said they would raise their minimum wages to $15 an hour, while companies like AT&T are giving employees a one-time $1,000 bonus.
More companies are likely to announce changes to wages and benefits packages — a major attraction and retention tool — in the coming months.
Amy Hollis, national leader of voluntary benefits at Willis Towers Watson, says it is a logical thought that employers will leverage the tax cut.
“I do think that correlation is going to be made because there is no question that employers are really looking at their benefit program and their concurrent investment in those benefit investments,” she says.
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