Employees Perceived Value of Benefits Declining

May 3, 2011 (PLANSPONSOR.com) – Prudential’s Fifth Annual Study of Employee Benefits: Today & Beyond finds that as employers shift to a more employee-driven benefits model, employees’ satisfaction with and perceived value of benefits have been in decline.

More than two-fifths (43%) of plan participants indicated that the level of employee benefits their company offers decreased this year from last year. Half said they remained about the same.  

Plan participants feel they are receiving fewer benefits from their companies and paying more for the ones that are being offered. In 2007, 32% of plan participants said their company paid all or most of employee benefits, compared to 26% this year. In 2007, 55% said their company offered a wide range of benefits, compared to 38% currently.  

Consequently, plan participants see less value in the benefits being offered by their employers. In 2007, 53% of plan participants thought that their employee benefits were “highly valuable,” compared to 43% this year.  

The study found two-thirds of plan participants say that offering voluntary benefits increases the value of their employers’ overall benefits package, compared to 59% last year. The most common voluntary benefit owned by U.S. workers is life insurance; one in five (21%) say they enrolled in a voluntary/optional life insurance plan through their employer and pay 100% of the cost.  

In the past year, one in five plan participants (20%) added a new voluntary coverage through their employer, while only 8% say they dropped existing coverage. Also, among those with voluntary benefits, 25% increased the level of coverage of an existing voluntary benefit in the past year, and only 8% reported decreasing the level of coverage of an existing voluntary benefit.  

More than one-third of plan participants say they would be interested in additional help and/or advice on critical illness insurance (39%), disability insurance (34%), and long-term care insurance (34%).  

It appears that workers’ priorities have continued to shift toward improving their physical and emotional well-being. More than six in 10 plan participants consider work/life balance, reducing stress, and maintaining a healthy lifestyle as “highly important.”   

Plan participant results are based on surveys conducted among 1,200 U.S. workers, age 22 or older, who are employed full time for a company with at least 50 benefits-eligible employees.