Plan Sponsors and Participants Cite Different ‘Important’ Benefits

Plan sponsors can strengthen their support for workers by more closely aligning benefits with what workers say is important, a new Transamerica Institute survey shows.

The Transamerica Center for Retirement Studies survey, “Emerging From the COVID-19 Pandemic: The Employer’s Perspective,” found that 81% of employers feel responsible for helping employees maintain their long-term health and well-being, while 72% have one or more major concerns about employees’ mental health and 47% have found it difficult to recruit new employees.

The survey examined effects of the COVID-19 pandemic on employers and their health and welfare benefits and business practices.   

“In the wake of the pandemic, employers have been navigating complex issues in a rapidly changing environment, especially in managing the needs of their workforce,” Catherine Collinson, CEO and president of Transamerica Institute and Transamerica Center for Retirement Studies, said in a release. “However, they can be doing even more to support their employees.”

Although plan sponsors are focused on employee benefits, the survey found significant gaps between the percentage of employers that offer particular benefits and the percentage of workers who value those benefits as important.

The survey found that among workers and plan sponsors, the highest level of agreement concerns the need for health insurance—rated as important by 56% of employers and 93% of workers—and 401(k) retirement plans, which garnered support from 55% of employers and 89% of workers. Regarding other workplace benefits, 36% of employers said that life insurance is somewhat or very important compared with 83% of workers; 30% of employers cited employer assistance programs compared with 71% of workers; 29% of employers said that workplace wellness programs are very or somewhat important versus 69% of workers; and 28% of plan sponsors favor financial wellness programs as somewhat or very important compared with 73% of workers.   

Addressing this employee benefits gap is critical to businesses’ viability, especially as it relates to their ability to attract and retain quality employees, Collinson added.

“A robust compensation and benefits package is a win-win situation in the workplace,” she said. “It can help employers attract and retain talent while providing employees income, work-life balance, and the ability to save for retirement while protecting their health, well-being, and financial situation.”

The survey found significant discrepancies in whether an employer offers a retirement plan benefit to employees; plan sponsorship rates are lower among small companies, as 46% of these employers offer a 401(k) or retirement plan to their employees, compared with 92% of large companies and 89% of medium companies.

Transamerica also found that a “sizable” gap in retirement savings among workers derives from company size. According to the survey, workers employed by large companies have saved $96,000 in total household retirement accounts and those of medium companies have saved $73,000, while workers at small companies have saved only $41,000.

The Transamerica survey was based on a survey of more than 1,800 for-profit company employers conducted in late 2021, and offers comparisons by company size, from small (less than 100 employees), and medium (100 to 499 employees) to large (500 or more employees). It also includes relevant comparisons from TCRS’ most recent survey of workers.