Alight Solutions has published the June update of its 401(k) Index, noting that it was another active trading month for investors.
There were five above-normal trading days in June, Alight says. All but three days in the month had net trading flows going from equities to fixed income.
On average, 0.015% of 401(k) balances were traded daily, compared to an average of 0.018% last month. Investors favored moving assets into fixed-income funds during 18 out of 21 trading days. Trading inflows exclusively went to fixed-income funds with stable value leading the way, while outflows were primarily from target-date, large U.S. and international equity funds, Alight says.
After reflecting market movements and trading activity, average asset allocation in equities decreased from 68.8% in May to 67.7% in June, Alight says. New contributions to equities decreased from 69% in May to 68.7% in June.
According to the index, a “normal” level of relative transfer activity is when the net daily movement of participants’ balances, as a percent of total 401(k) balances within the index, equals between 0.3 times and 1.5 times the average daily net activity of the preceding 12 months. A “high” relative transfer activity day is when the net daily movement exceeds two times the average daily net activity. A “moderate” relative transfer activity day is when the net daily movement is between 1.5 and two times the average daily net activity of the preceding 12 months.
Employers have responded to workers changed workplace benefits needs by rethinking benefits policies, plan design and offerings, according to a new report.
Because of the COVID-19 pandemic and resultant tight labor market employers are competing for talent by re-examining their workplace benefits the “NFP 2022 Benefits Trend Report” finds. Among employers, 45% say that their primary strategic obstacle in human resources is being challenged by rapid growth and/or higher turnover within their organizations, the report explains.
“In the wake of the pandemic, a tight labor market and shifting employee priorities, the workforce has changed dramatically–and so have their needs,” said Kim Bell, executive vice president and head of health and benefits, at NFP, in a release. “It is more important than ever for employers to get benefits right, and those who respond with policies and offerings that promote mental health, access to quality health care and life-work integration will be the talent leaders of tomorrow.”
Among employers, top options to increase employee satisfaction focus on additional benefit choices and customization, (37%) and improved communication, (33%). This is highlighted by most employers incorporating a so-called benefits “re-set” to assist employees’ mental well-being and flexibility, the report finds.
In the last 18 months to one year, 65% of employers surveyed have incorporated alternative work schedules and three-in-four plan to make the change permanent.
“It’s time to embrace the home as a key part of the workplace,” said Deb Smolensky, senior vice president, global practice leader for well-being and engagement, in the report. “Employers have to focus their well-being strategies on the home environment and daily life challenges.”
The report also finds that two-thirds of employers have adjusted their paid time off and leave policies to assist with workers mental health, 51% provide online mental health resources, 35% provide health coaching, 29% offer in-office mental health resources and 22% invest in peer support groups.
“Nearly every component of employee well-being—mental, physical, financial, social, career—has suffered over the past two years, prompting employees to rethink their jobs and benefits priorities,” added Smolensky, in a release. “While employees want fulfilling work experiences, they want their lives—not their work—to come first. The goal is no longer work-life balance, its life-work integration.”
According to data from Voya that is cited in the report, 70% of workers are more likely to work for an employer offering employee-paid voluntary benefits.
Data from MetLife cited in the report shows that workers and employers don’t consider which benefits are essential in the same way. The NFP report shows 2021 MetLife data found that 44% of employees say critical illness insurance is a must and 29% of employers offer it; 38% of employees view hospital indemnity as a must, despite only of 22% employers that offer it and while 32% of employees consider homeowners’ insurance a must 22% offer it.
For employers and workers, health care expenses—during a workers’ career and into retirement—are an increasing concern, the report finds. According to the 2022 annual estimate from Fidelity Investments, health care in retirement will cost an average of $315,000.
With U.S. health expenditures expected to increase by 47% by 2028, two-thirds of employers want to implement a benefits program that can contain costs, according to the NFP report. For employers inclined to make a change, 22% are extremely willing, 40% are very willing, 28% moderately willing and 8% are slightly willing to implement a program alteration to limit costs, the report finds.
The report also showed that among employees 64% view financial benefits as within the top five offerings to assist workers with financial concerns but 37% of employers are planning “to invest more in such benefits after COVID-19,” the report states.
