Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
By Cyril Tuohy
More than three out of four employees say they want more variety of benefits to choose from and more than one in two is willing to bear more of the cost to secure those choices to meet their needs, a new survey finds.
The findings, released as part of MetLife’s 12th Annual U.S. Employee Benefit Trends Study, bodes well for voluntary benefits and for private benefits exchange models, both of which are designed to broaden employee choice.
With the rising cost of benefits, help with sponsored perks and privileges beyond salary are considered an important retention tool for employers.
Todd Katz, executive vice president of group, voluntary and worksite benefits at MetLife, said employees who are very satisfied with benefits are “more than twice as likely” to report high rates of job satisfaction.
“The study takes this even further, showing that benefits are a strong driver for employee loyalty — 44 percent of employees say that having benefits customized to meet their needs would increase their loyalty.”
Voluntary benefits are paid for 100 percent by the employee through a payroll deduction. The benefits are offered in addition to shared benefits -- benefits for which the employer and the employee contribute to premiums.
Private health benefits exchanges offer employees the ability to shop among five or six health plans. The plans offer more choices than in the past when many companies only offered one or even two health plans for employees to choose from.
Early indications show that many employees are still purchasing an appropriate amount of coverage but at a lower price than they would have under a traditional employer-sponsored benefits model. Workers tend to “buy down” and pay less simply because they need less, according to experts who help manage private exchanges.
The MetLife survey also found that 87 percent of employers reported that retention continues to be a very important benefits objective. In addition, 88 percent of employers cited cost control as a very important benefits objective.
Last year, average annual health premiums for family coverage came to $16,351, according to the Kaiser Family Foundation and the Health Research & Education Trust (HRET).
Of the $16,351 in average health premiums for family coverage, the employer picked up $11,786, or 72 percent of the total cost, and the employee paid the rest, according to Kaiser/HRET.
MetLife’s survey was conducted in October and November by GfK Custom Research North America, and data was collected from interviews with 3,237 benefits managers, employees and benefits brokers and consultants.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at email@example.com.
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