Although it may seem like the most menacing public health crisis has been alleviated, it has undoubtedly left a huge impact on it. The real significance of employee health and wellbeing came to light. Also, its influence on workplace engagement and productivity became apparent.
Of the different health and wellbeing dimensions, employee mental health and financial health were the most affected. While there have been many studies regarding employee mental health and the different wellness program modules implemented to support it, not much has been studied about financial health. It was evident that financial wellness programs are the best way to reduce money-related stress.
To help the workforce overcome their health and wellbeing concerns, many employers started redefining their employee benefits packages, including suitable workplace wellness programs. Many started offering retirement benefits as a part of the employee benefits package.
Transamerica Institute and its Transamerica Center for Retirement Studies examined the pandemic’s impact on employers, their response, and timely opportunities. On behalf of TI, The Harris Poll conducted the online survey from November 18 to December 20, 2020, with a sample of 1,903 employers. The potential respondents were business executives who made decisions about employee benefits at their company.
Employee Retirement Benefits Study Outcomes
In our previous blogs, we discussed the impact of the pandemic on employers and the different health and welfare benefits offered by them for workplace wellbeing.
In this blog, we highlight the study outcomes of retirement benefits offered by employers for workplace wellbeing.
Employer-sponsored retirement plans, including 401(k) benefits, have now become an integral part of employee retention and recruitment strategies. Moreover, they are effective in helping the workforce with long-term financial security. And so, offering retirement benefits as a part of the employee engagement strategy was a top priority.
According to the study, almost 74% of employers agreed that offering an employer-sponsored retirement benefits package was vital to attract and retain employees. Almost 55% of large companies and 59% of mid-size companies were more likely to offer these employee benefits compared to 30% of small companies.
The Offered Different Retirement Employee Benefits
Almost 52% of employers offered some kind of employee-funded plan. 90% of large and 83% of medium companies were more likely to offer employee-funded retirement benefits, while only 44% of small-sized companies did so. 80% of large companies provided employee-funded 401(k) plans, followed by 78% of mid-size and only 36% of small companies. Of the ones who did not offer 401(k) plans, 27% of large organizations offered other employee self-funded plans like SEP, SIMPLE, etc. 17% of medium and 12% of small companies followed suit.
Only 17% of employers offered company-funded defined benefit plans, with large companies (42%) providing the most.
While 51% extended eligibility to even their part-time workers, large companies (64%) and mid-size companies (51%) were more likely to offer these compared to 46% of small companies.
Of the employers who offered proper employee retirement benefits plans, 92% of plan sponsors also made an employer contribution to the 401(k) or other NET plans. 98% each of large and medium companies, and 89% of small companies had an employer contribution. While 73% made a company match to the employee’s contribution, 26% contributed to the plan but were not a match.
64% of plan sponsors offered a Roth 401(k) option, with 77% of large companies being the largest contributor followed by 70% of medium and 58% of small companies.
Almost 41% of employers did not offer any kind of employee retirement benefits. Amongst them, 50% of small-size companies significantly indicated not to provide any retirement benefits, while 1% of large and 4% of medium-sized companies did not contribute anything.
Of the companies not offering any 401(k) or employee-funded plan, only 37% were planning on offering some kind of retirement benefits to their workforce in the next two years.
When asked why the company did not offer any plan, the most common reasons cited by the respondents were –
- 74% – The company is not big enough
- 35% – were concerned about the costs
- 11% – employees not interested
- 9% – management not interested
Employer Support to Help Employees with Savings and Investment
Amongst the employers who offered a 401(k) or other similar financial wellbeing plans, the plan sponsors supported their workforce for better planning, saving, and investing. They offered financial wellness programs with an array of online tools and resources, access to educational resources, webinars/seminars/workshops, and discussions with expert consultants. Many also provided quarterly statements and other employee assistance programs.
In general, large and medium-sized companies were more likely to offer these employee financial wellness programs, and small companies were less likely to do so.
Some employers also provided retirement planning-related educational offerings. While 54% of employers offered information about Social Security, 52% discussed Medicare benefits. Again, large and medium-sized companies were more likely to offer these educational resources and information, compared to small companies.
It is evident that financial health plays a major role in overall employee wellbeing and workplace productivity. And so, providing financial wellness programs, with retirement plans, workplace benefits, and other employee wellness solutions is essential for their holistic health.