Most employees want to decide for themselves how to divide the money they receive for benefits, according to a study by the LIMRA Secure Retirement Institute released Monday.
The studyof 2,563 people finds that 73 percent of employees across all age groups would like the ability to customize their workplace benefits to suit their individual needs. This would mean letting them divide the monetary equivalent they receive from employers between such things as vacation days, health care, retirement savings, disability insurance and educational programs.
The strategy, called a "benefits wallet," offers flexibility to the employee but could also undermine some key features that have increased retirement savings within workplace retirement savings plans, says LIMRA, a worldwide association of financial services and insurance companies based in Windsor, Conn.
The study, Employee Benefits Face Off: Worker Positioning of Retirement Plans in a Benefits Wallet, found that only about half of workers are satisfied with their current employer benefits. According to the Institute’s findings, employees with higher household incomes are more likely to be satisfied with their benefits, because they have a better package of benefits than lower-paid workers.
Employees ranked health-care coverage, retirement savings accounts and vacation as the three most popular workplace benefits. The stage of life an employee is in influences the types of benefits he or she values most.
Millennial workers favor education benefits and paid parental leave. Gen-X workers rank financial planning and wellness programs higher than millennials and baby boomers. Baby boomers rank disability insurance significantly higher than millennials and Gen-Xers.
“As competition for top employees increases and benefits resources tighten, employers will have to ensure their benefits program is balanced and competitive,” said Michael Ericson, an analyst at the LIMRA Secure Retirement Institute. “While offering a benefits wallet approach might seem the easiest way to accommodate the different needs of employees, it may have the unintended consequence of weakening established retirement savings programs like auto-features and employer-matching contributions that promote retirement savings.”