Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
KANSAS CITY, Mo., June 3, 2014 /PRNewswire/ -- As the economy shifts, many Americans are voluntarily leaving jobs to improve their overall financial situation. But, according to a recent survey by the National Association of Insurance Commissioners (NAIC), new hires who focus on salary alone actually may find themselves in worse financial shape after a move. The NAIC urges consumers to consider total compensation, including insurance benefits, before accepting what could turn out to be a not-so-lucrative job offer.
According to the survey, 40 percent of voluntary job switchers cited "improve my financial situation" as a key influence on their decision to quit.1 Issues occurred when respondents took a too-narrow view of what impacts that situation. The survey reports that while 73 percent of job switchers spent some or significant time thinking about salary, only 41 percent spent as much time considering insurance benefits, and less than 30 percent thought as much about out-of-pocket costs or insurance coverage effective dates before making the switch.
"All too often, people only think about salary when considering a new job," said Adam Hamm, NAIC President and North Dakota Insurance Commissioner. "We urge consumers to consider all the financial implications of a job change, including insurance. Total compensation is more complex than salary alone."
According to the Bureau of Labor Statistics, insurance benefits can average nearly 10 percent of total compensation.2 As some NAIC survey respondents learned, ignoring this key component of the financial picture can be costly. Nearly 25 percent of job switchers surveyed said after accepting a new job, insurance-related changes either "slightly or greatly worsened" their overall financial situation.
To help consumers avoid surprises, the NAIC developed Get Ready resources for changing jobs. The resource kit includes a variety of tips and tools, such as challenging questions to ask yourself and a Take Action Now checklist of things to do before deciding to stay or go.
Questions to consider include:
Some steps to take before saying good-bye to a current employer include:
Get Ready resources for changing jobs are available at InsureUOnline.org. Consumers interested in insurance information specific to where they live can contact their state insurance commissioner.
1. ResearchNow consumer panel; 251 consumers age 18+ who have left a job voluntarily in the past five years. Study commissioned by NAIC. February 2014
2. "Quits levels and rates by industry and region, seasonally adjusted." Bureau of Labor Statistics; April 8, 2014. http://www.bls.gov/news.release/jolts.t04.htm
The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S. For more information, visit www.naic.org.
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SOURCE National Association of Insurance Commissioners (NAIC)