Employee benefits can address the underlying causes of financial stress, but it is important for plan sponsors to recognize that different workers have different needs, which may make them take interest in a different spectrum of benefit programs, according to the Employee Benefit Research Institute (EBRI).
A new cut of data from the EBRI/Greenwald & Associates Health and Workplace Benefits Survey finds the highest source of financial stress for Baby Boomers and Generation X employees is saving enough for retirement, cited by 54% and 43%, respectively. However, for Millennials, saving for retirement (27%) falls behind paying monthly bills (35%), having savings in case of an emergency (29%) and the amount of debt they have (29%). Student loan repayments came in fifth on the list of sources for Millennials’ financial stress, at 24%.
The survey also found that two-thirds or more of employees surveyed said benefits, including many voluntary benefits, contribute to their financial security. While 89% indicated health benefits contribute a little (34%) or a lot (55%) to their financial security, 88% said the same for a retirement savings plan (39% a little, 49% a lot) and 87% said so for a defined benefit (DB) plan (45%, 43%), a majority of employees also reported that critical illness insurance (40% a little, 34% a lot), cancer insurance (34%, 40%) and long-term care insurance (38%, 30%) contribute to their financial security. The number one reason (61%) employees gave for purchasing these voluntary benefits is that it is less expensive to purchase through the employer than on their own.
Research findings suggest that employers could do a better job of educating employees about benefits that may improve their overall financial security. More than one-third (37%) of employees indicated their employer or benefits company provides no education or advice on benefits. Only 30% stated that their employer or benefits provider offers education on how health insurance works, 18% provide education on how a health savings account (HSA) works, and only 12% indicated their employer or retirement plan provider offers education about how to invest money in the retirement plan.
In addition, only 16% said they are offered education about how to budget, reduce debt or manage their personal finances, 11% reported they are offered education about how much to contribute to their HSA, and 10% indicated they are offered education on how to invest money in their HSA. Still, 72% of employees said it was somewhat or very easy to find information about their health benefits and 68% said the same about their retirement plan.
“As the proportion of younger workers grows and Baby Boomers retire, benefits providers will need to continue to adjust their offerings to attract young workers. Increased education and advice to help employees with selection may be part of the solution,” the report says.The complete Issue Brief, “The State of Employee Benefits: Findings from the 2018 Health and Workplace Benefits Survey,” may be downloaded from here for registered members.