Pension plans and life insurance contribute to the financial security of employees

According to “2021 survey on well-being at workconducted by the Employee Benefits Research Institute (EBRI) and independent research firm Greenwald Research.

Among those with an employer-sponsored pension plan, seven in 10 say they understand their benefits extremely or very well. Six out of 10 say they are satisfied with their plan. Of those without an employer-sponsored plan, 60% are interested in a plan.

Most of the employees surveyed currently contribute to their plan and receive contributions from their employer. Among those who receive employer contributions, 68% say they are satisfied with the contribution they receive. Just under half report that they contribute the same or up to their employer’s match; another four out of 10 contribute more.

About half also say that life insurance and financial wellness programs contribute a lot to their sense of financial security.

Employees say that greater employer financial contributions (34%), increased flexibility (i.e. more benefits to choose from) (28%) and more benefits to help being financial (26%) are the most valuable improvements that could be made to their benefit programs.

The 2021 survey of 2,016 American workers was conducted online July 7-27. All respondents were between 21 and 64 years old.

Additional benefits to help with financial security

Although the majority of employees report feeling that the benefits their employers already offer help them feel more financially secure, 49% of employees express at least moderate concern about their household’s financial well-being. Saving for retirement and having savings for emergencies are the top sources of financial stress cited. Sixty-three percent say they feel stressed when thinking about their financial future, although that figure is down from seven in ten in 2020.

Two out of three employees surveyed said they felt they had enough savings to deal with an emergency. Eight out of 10 say they are ready to face an unexpected expense of $500 and six out of 10 feel prepared for an expense of $5,000.

Yet 83% of employees say they are at least somewhat interested in an emergency savings account that allows them to save through payroll deduction. And more than half (54%) of employees say their retirement savings are the only significant emergency savings they have.

Since the pandemic exposed many Americans’ lack of emergency savings, pension plan registrars have scrambled to create both in-plan and out-of-plan solutions, according to a commonwealth report. Participants’ financial well-being and emergency preparedness have also become more important in advisor service models.

When employees surveyed in the EBRI/Greenwald Research study were given a hypothetical monthly budget of $600, overall they allocated the most money to a retirement savings account, followed by a retirement account. emergency savings. Although student loan debt is reported as a big problem and a barrier to saving, and some employers are considering ways to help employees with student loan debt, employees in the survey allocated the least from a hypothetical monthly benefits budget to a plan to pay reduce student debt.

Sarah J. Greer