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9 in 10 workers rank health care and retirement as the most important workplace benefits


WINDSOR, Conn,Employees Ranked Health Care Coverage... Dec. 12, 2016—A new LIMRA Secure Retirement study finds 73 percent of U.S. employees across all age groups would like the ability to customize their workplace benefits to suit their individual needs.

“Consistently, our surveys have shown recruiting and retaining the best employees is a top priority for employers,” said Michael Ericson, LIMRA Secure Retirement Institute analyst. “With four generations in the workplace, designing an attractive benefits package for all employees is challenging. As a result, employers are considering offering their employees the ability to control how they allocate their allotted money across their benefits.”

This strategy, often called ‘benefits wallet,’ offers flexibility to the employee but could also undermine some key features that have increased retirement savings within the workplace retirement savings plans. A benefits wallet architecture gives each employee a certain amount of money annually to allocate toward the benefits they want. 

The LIMRA Secure Retirement Institute study, Employee Benefits Face Off: Worker Positioning of Retirement Plans in a Benefits Wallet, asked workers to rank the importance of each benefit and how they would allocate hypothetical dollars across those benefits.  

The study found that only half of workers are satisfied with their current employer benefits. Married workers are more satisfied than non-married workers (55 percent vs. 45 percent) and workers who use a financial advisor are more likely to be satisfied with their benefits (62 percent vs. 46 percent). Recent research from Aflac finds that 4 in 10 employees say they are more likely to remain with their current employer if they are satisfied with their benefits package1.

According to the Institute’s findings, employees with higher household incomes were more likely to be satisfied with their benefits. Lower-income workers are less likely to be full-time employees and are less likely to have generous benefits available to them. In addition, more than half of workers (54 percent) agree that their non-salary benefits play a large role in their financial security. Men were more likely to say this than women; and older employees were more likely to value benefits over salary.

Employees ranked health care coverage, retirement savings accounts and vacation as the three most popular workplace benefits (chart). Almost 90 percent of workers ranked health care coverage and retirement savings plans in their top five most important benefits. This suggests if a benefits wallet approach is adopted, employees—especially younger ones—might ignore life insurance, disability insurance, and other valuable benefits. LIMRA research finds that 37 percent of U.S. households rely solely on employee-sponsored life insurance.

A worker’s life stage also influences the types of benefits most valued by the employee. The Institute found:

“As competition for top employees increases and benefits resources tightens, employers will have to ensure their benefits program is balanced and competitive,” noted Ericson. “While offering a benefits wallet approach might seem the easiest way to accommodate the different needs of employees, it may have the unintended consequence of weakening established retirement savings programs like auto-features and employer-matching contributions that promote retirement savings.”

Prior Institute research shows half of U.S. workers who have access to an employer-sponsored retirement savings plan expect to primarily rely on that savings to meet their eventual financial needs in retirement. 

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12016 Aflac WorkForces Report

 

 

About LIMRA Secure Retirement Institute

LIMRA Secure Retirement Institute provides comprehensive, unbiased research and education about all aspects within the retirement industry to improve retirement readiness and promote retirement security. For more information, please visit www.secureretirementinstitute.com.

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