Study: Benefit Levels Decreasing, Satisfaction Growing

March 16, 2005 ( - The 2005 Principal Well-Being Index shows that despite a decline in the availability of employee benefits, satisfaction with such benefits is increasing.

According to the study (See Study: Employees Realistic About Social Security Reform ), the past three years has brought with them increasing cutbacks on employee benefits, a result largely of rising medical costs. However, a corresponding rise in employee satisfaction with the benefits being offered has been seen. Health insurance availability has declined since 2002 (from 94% to 89%), and similar drops have been seen in defined contribution plans (74% to 64%), life insurance (74% to 63%), disability insurance (55% to 47%), and even free parking (63% to 56%).

However, a rise in employee satisfaction can nonetheless be seen. According to the report, “workers were notably more satisfied this quarter with all their core benefits.” Their profit sharing plans are seen as most satisfying, with 55% claiming they are happy with them, followed by defined benefit plans (52%), defined contribution plans (48%), life insurance (48%), and health insurance (40%). In 2004, health insurance satisfaction was at only 35%. However, it is also the benefit that 43% want to see improved. The study indicates that fewer increases in medical co-pays and deductibles being passed to employees may account for the increase in satisfaction.

Not surprisingly, health insurance is seen as the most important benefit, followed by defined contribution and defined benefit plans.