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The Principal Financial Well-Being IndexSM Employee Only Questions - Second Quarter 2008

Benefits Offered at Businesses with 10-1,000 employees

The top benefits offered at businesses with 10-1,000 employees are health insurance (92%), defined contribution plans (71%), dental insurance (71%), life insurance (68%), and free parking (60%). In Table 25 below, comparisons can be made with 5 previous year’s benefit offerings. Significance testing was done between this quarter’s results and the most previous year’s results. There are a few significant differences between responses from this most recent quarter and 2nd quarter 2007 – indicated with "SIG" below. A significantly larger portion of employees this quarter say they have stock options and on-site day care than last year at this time.

Table 25
"What types of benefit programs (excluding vacation/holidays) does your company currently offer you?"
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees

Company Sponsored Primary Benefits 2 Qtr 2008 2 Qtr 2007 2 Qtr 2006 2 Qtr 2005 2 Qtr 2004
Health Insurance 92% 93% 91% 84% 94%
Defined Contribution Plan 71% 74% 71% 64% 74%
Dental Insurance 71% 69% N/A N/A N/A
Life Insurance 68% 66% 66% 59% 73%
Free Parking 60% 57% 59% 59% 61%
Disability Insurance 49% 45% 40% 46% 56%
Tuition Reimbursement 29% 28% 26% 29% 37%
Flex Time 26% 27% 26% 25% 28%
Profit Sharing/Bonus 22% 20% 20% 22% 28%
Defined Benefit Plan 21% 21% 18% 23% 23%
Stock Options 8%SIG 5% 9% 8% 12%
Financial Planning 8% 7% 5% 10% 11%
Legal Services 7% 6% 6% 9% 10%
Personal Banking Services 5% 5% 7% 9% 12%
Child Care Subsidies 3% 3% 3% 3% 4%
Executive Benefits 3% 2% 3% 4% 6%
On-site Day Care 3%SIG 1% 1% 2% 2%
Other 8% 7% 6% 6% 7%

SIG – varies significantly (95% level) from previous results employee comparison

Benefit Satisfaction

Upon identifying what benefits they are offered through their employer, employees were asked to rate their satisfaction with some of the major benefits. Employees are most satisfied with their defined benefit plan (67%), defined contribution plan (58%) and profit sharing/bonus (55%). In comparing this quarter’s results with the previous year, satisfaction with disability insurance is significantly higher (52% versus 44% in 2007).

Table 26
"Although you may have mentioned more than appear below, you indicated that you have the following benefit program(s) through your company. Using a scale from "1" to "10", where "1" means Not At All Satisfied and "10" means Very Satisfied, please indicate how satisfied you are with each benefit program."
Percentages included in chart represent those rating their satisfaction an 8, 9 or 10.
Base: varies by benefit offered by employer

Satisfaction with Benefit 2 Qtr 2008 2 Qtr 2007 2 Qtr 2006 2 Qtr 2005 2 Qtr 2004
Defined Benefit Plans (N=256) 67% 62% 66% 54% 55%
Defined Contribution Plans (N=785) 58% 56% 55% 53% 54%
Profit Sharing/Bonus (N=224) 55% 48% 57% 57% 40%
Life Insurance (N=784) 53% 51% 51% 51% 51%
Health Insurance (N=1034) 53% 50% 46% 46% 45%
Stock Options (N=91) 53% 39% 37% 33% 45%
Disability Insurance (N=547) 52%SIG 44% 53% 47% 50%
Dental Insurance (N=802) 50% 46% N/A N/A N/A

SIG – varies significantly (95% level) from previous results employee comparison

Benefit Importance

All employee respondents were asked to rate a group of benefits in terms of how important each was to them on a 10-point scale with 10 being "Very Important." Similar to 2007, the top three benefits rated as most important to employees are health insurance (86%), defined contribution plans (71%), and dental insurance (67%). The perceived importance of stock options increased significantly (21% versus 17% in 2007).
Some gender differences exist for perceived benefit importance. Females (72%) were more likely than males (63%) to rate dental insurance as important. Furthermore, females (55%) were also more likely than males (45%) to rate life insurance as important.

Table 27
"Using a scale from "1" to "10", where "1" means Not At All Important and "10" means Very Important, please indicate how important each benefit program is to you." Percentages included in chart represent those rating importance an 8, 9 or 10.
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees

  2 Qtr 2008 2 Qtr 2007 2 Qtr 2006 2 Qtr 2005 2 Qtr 2004
Health Insurance 86% 88% 89% 89% 92%
Defined Contribution Plan 71% 74% 72% 70% 72%
Dental Insurance 67% 70% N/A N/A N/A
Defined Benefit Plan 55% 55% 55% 57% 56%
Disability Insurance 52% 51% 55% 55% 54%
Life Insurance 50% 47% 49% 52% 50%
Profit Sharing/Bonus 43% 40% 43% 42% 47%
Stock Options 21%SIG 17% 20% 17% 16%

SIG – varies significantly (95% level) from previous results employee comparison

Employee respondents were asked to identify what benefits they would most like their employer to offer, aside from those already offered. Defined benefit plans topped the list with 24%, followed by profit sharing/bonus (15%) and flex time-flexible work schedule (14%).

Table 28
"Which one employee benefit do you most wish that your company would offer you (excluding vacation and holidays)?"

Top 5 Benefits
Base: employees without certain benefits

Benefits 2 Qtr 2008 2 Qtr 2007 2 Qtr 2006 2 Qtr 2005
Defined Benefit Plan 24%SIG 20% 23% 19%
Profit Sharing/Bonus 15% 13% 14% 14%
Flex Time- Flexible Work Schedule 14% 14% 11% 10%
Defined Contribution Plan 6% 6% 8% 7%
Tuition Reimbursement 5% 7% 6% 6%

SIG – varies significantly (95% level) from previous results employee comparison

Aside from those benefits employees would like to see added to their employers’ benefit programs, they were also asked to identify what benefits they would like to have improved upon. The top two benefits mentioned are health insurance (37%) and defined contribution plans (20%). This has been consistent for the past four years. See Table 29 for additional detail.

Table 29
"Which one employee benefit (excluding vacation and holidays) do you most wish that your company would improve upon?"
Base: 1,114 employed U.S. adults in firms of 10-1,000 employees

Benefits 2 Qtr 2008 2 Qtr 2007 2 Qtr 2006 2 Qtr 2005
Health Insurance 37% 40% 42% 41%
Defined Contribution Plan 20% 17% 17% 14%
Life Insurance 5% 4% 3% 4%
Profit Sharing/Bonus Plan 4% 4% 4% 6%
Defined Benefit Plan 3% 4% 3% 4%
Disability Insurance 3% 3% 1% 3%
Tuition Reimbursement 2% 3% 3% 3%

SIG – varies significantly (95% level) from previous results employee comparison

Benefits for Recruiting & Retention

Firms with 10 to 1,000 employees offer employee benefits to aid in the recruiting and retaining of quality employees. To measure how employees react to the presence of good employee benefits, a series of agreement statements were asked. There was a significant decrease in the proportion of employees who agree that a good employee benefits plan encourages them to work harder and perform better (63% versus 68% in 2005). The percentage of employees (63%) who agreed that having a good employee benefits plan keeps them working for their current company increased significantly from 2nd quarter 2005 (57%). In addition, the percentage of employees (28%) who agreed that their company is concerned about their long-term financial future also increased significantly from 2nd quarter 2005 (24%).

Table 30
"Please indicate the extent to which you agree or disagree with the following statements…"
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees

Trending Comparison
(% of respondents agreeing completely or somewhat)
2 Qtr
2008
2 Qtr 2005 2 Qtr 2004
Having a good employee benefits plan encourages me to work harder and perform better. 63%SIG 68% 63%
Having a good employee benefits plan keeps me working for my current company. 63%SIG 57% 62%
My company is concerned about my long-term financial future. 28%SIG 24% 22%

SIG – varies significantly (95% level) from previous results employee comparison

Job Security

Job security was ranked number one in terms of importance by more employees (47%), over long-term financial future (41%) and challenging work (12%). Significantly more employees ranked job security as number one in terms of importance than in 2nd quarter 2007, while significantly fewer employees ranked long-term financial future number one than this time last year.

Table 31
"Please rank the following items in terms of how important it is to you."
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees

Respondent Ranked Item #1 2 Qtr 2008 2 Qtr 2007 4 Qtr 2006 4 Qtr 2005 4 Qtr 2004
Job Security 47%SIG 39% 45% 52% 47%
Long-Term Financial Future 41%SIG 49% 41% 36% 35%
Challenging Work 12% 12% 14% 12% 19%
  N=1,117 N=1,137 N=1,197 N=1,213 N=1,736

SIG – varies significantly (95% level) from previous results employee comparison

Employees were asked about their level of concern with their own job security. Just about a quarter (24%) of employees have some level of concern with their own job security. A follow up question was asked to see if feelings of job security are causing employees to make changes in their future career. One in five employees (21%) said yes.

Table 32
"What is your level of concern with your own, personal job security?"
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees

  2 Qtr 2008
EE
2 Qtr 2007
EE
Extremely Concerned 5%SIG 3%
Very Concerned 5% 5%
Concerned 14% 14%
Somewhat Unconcerned 35%SIG 31%
Not at all concerned 41%SIG 47%

SIG – varies significantly (95% level) from previous results employee comparison

Table 33
"Are your feelings about job security causing you to make any changes in your future career?"
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees

  2 Qtr 2008
EE
2 Qtr 2007
EE
Yes 21% 22%
No 79% 78%
  N=1,117 N=1,137

High Deductible Health Plans

To understand the level of knowledge regarding High Deductible Health Plans and Health Savings Accounts (HSA), employees and retirees were given a description of a High Deductible Health Plan and also a Health Savings Account (HSA). They were asked, "Prior to this survey, had you ever heard of a Health Savings Account?"

Half of retirees and significantly more employees (61%) have heard of a Health Savings Account before.
The percentage of employees (61%) who say they have heard of an HSA has decreased significantly since 2nd quarter of 2007(67%).

Table 34
"Prior to this survey, had you ever heard of a Health Savings Account?"
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees and 673 retirees

  2 Qtr 2008 2 Qtr 2007 3 Qtr 2006 2 Qtr 2005
  Retiree EE Retiree EE Retiree EE EE
Yes 50%sig 61%SIG 48% 67% 45% 62% 48%
No 50%sig 39%SIG 52% 33% 55% 38% 52%
  N=673 N=1,117 N=548 N=1,137 N=721 N=1,360 N=1,112

SIG – varies significantly (95% level) from previous results employee comparison
sig – varies significantly (95% level) from retiree and employee comparison

Employees who had heard of a Health Savings Account were asked some follow up questions. One question is whether or not they are currently enrolled in a High Deductible Health Plan with a Health Savings Account. Table 35 shows a relatively small percentage (17%) of employees are currently enrolled; however, this percentage is at the highest level since this question was first asked in 2005.

Table 35
"Are you currently enrolled in a High Deductible Health Plan with a Health Savings Account?"
Base: 702 employed U.S. adults in firms of 10-1,000 employees who have heard of an HSA

  2 Qtr 2008 2 Qtr 2007 3 Qtr 2006 2 Qtr 2005
Yes, through my current employer 17%SIG 13% 14% 9%
Yes, through a source other than my current employer 2% 4% 3% 3%
No 80% 83% 84% 89%
  N=702 N=779 N=910 N=559

SIG – varies significantly (95% level) from previous results employee comparison

Employees who are currently enrolled in a Health Savings Account were asked how they intend to use their savings. Forty-five percent plan to use it as a savings account to fund current and future medical expenses.

Table 36
"If you are currently enrolled in a Health Savings Account, how do you intend to use your savings?"
Base: employed U.S. adults in firms of 10-1,000 employees who have heard of an HSA and are currently enrolled in one

  2 Qtr 2008 2 Qtr 2007
As a savings account to fund current medical expenses 27% 29%
As a savings account to fund future medical expenses 28% 27%
Both as a savings account to fund current and future medical expenses 45% 44%
  N=128 N=113

Respondents who are not currently enrolled were asked if they had ever considered enrolling. Three out of four employees indicated they have never considered enrolling in a High Deductible Plan with a Health Savings Account. Fifteen percent of employees said they have looked at options outside of their current employer and decided not to enroll, while the other 10% said their employer offers it but they decided not to enroll. Table 37 shows the results.

Table 37
"Have you ever considered enrolling in a High Deductible Health Plan with a Health Savings Account?"
Base: 574 employed U.S. adults in firms of 10-1,000 employees who have heard of an HSA but aren’t currently enrolled in one

  2 Qtr 2008 2 Qtr 2007 3 Qtr 2006 2 Qtr 2005
Yes, my employer currently offers it, but I’ve decided not to enroll 10% 12% 8% 9%
Yes, I’ve looked at options outside my current employer and decided not to enroll 15% 16% 11% 11%
No, I’ve never considered it 75% 72% 81% 81%
  N=574 N=666 N=799 N=490

Respondents who have heard of a Health Savings Account and are not currently enrolled were then asked how likely they would be to consider enrolling in the next 12 months. The majority (77%) of respondents are somewhat or very unlikely to enroll within the next 12 months. The percentage of employees (62%) who said they are very unlikely to enroll has increased significantly since 2nd quarter of 2007.

Table 38
"Within the next 12 months, how likely are you to consider enrolling in a High Deductible Health Plan with a Health Savings Account?"
Base: 574 employed U.S. adults in firms of 10-1,000 employees who have heard of an HSA but aren’t currently enrolled in one

  2 Qtr 2008 2 Qtr 2007 2 Qtr 2005
Very Likely 1% 1% 2%
Somewhat Likely 8%SIG 5% 4%
Neither Likely Nor Unlikely 15% 19% 13%
Somewhat Unlikely 15% 19% 14%
Very Unlikely 62%SIG 56% 66%
  N=574 N=666 N=490

SIG – varies significantly (95% level) from previous results employee comparison

Concerns about Current Company

Employees were given a list of potential events that could happen to a company and asked to select any that are of concern for them regarding their company in the next year. Half of employees indicated they have no concerns about the future of their company. The most frequently chosen concern was their company will reduce the number of employees (36%), up significantly from 2nd quarter of 2007 (22%).

Table 39
Which of the following concerns do you have about your company in the next year? Please select all that apply."
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees

  2 Qtr 2008
EE
2 Qtr 2007
EE
My company will reduce the number of employees. 36%SIG 22%
My company will go out of business. 9% 8%
My company will be acquired by or merge with a larger company. 6% 7%
Other 8%SIG 11%
I have no concerns about the future of my company. 50%SIG 61%
  N=1,117 N=1,137

SIG – varies significantly (95% level) from previous results employee comparison

New Job

Just over a third (36%) of employees said they would be willing to relocate to keep their job if their company was purchased by another company.

When considering whether to accept a new job, the most important item from a provided list was salary, chosen by three out of four employees (76%) as the item ranked number one. Health coverage came in second with 14% followed by retirement savings plan with 6%.

Table 40
"If your company was purchased by another company, would you be willing to relocate to keep your job?"

Base: 1,117 employed U.S. adults in firms of 10-1,000 employees

  2 Qtr 2008
EE
2 Qtr 2007
EE
Yes 36% 40%
No 64% 60%
  N=1,117 N=1,137

Table 41
"When considering whether to accept a new job, please rank the following in terms of how important it is to you."
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees

Respondent Ranked Item #1 2 Qtr 2008 2 Qtr 2007
Salary 76% 74%
Health Coverage 14%SIG 17%
Retirement Savings Plan 6% 5%
Vacation/sick days 3% 3%
Life Insurance 1% 1%
  N=1,117 N=1,137

SIG – varies significantly (95% level) from previous results employee comparison

Retirement Savings

Employees were asked about their effort to save for their own retirement over the past 6 months. Just over half (57%) of the employees said they have not changed the amount they are saving towards retirement in the past six months. One in five employees has increased the amount they are saving, while 7% have decreased the amount they are saving. Sixteen percent of employees indicated they are not currently saving for their retirement.

Table 42
"Which of the following describes your effort to save for your own retirement over the past 6 months?"
Base: 1,117 employed U.S. adults in firms of 10-1,000 employees

  2 Qtr 2008
I have reduced the amount I am saving towards retirement 7%
I have increased the amount I am saving towards retirement 20%
I have not changed the amount I am saving towards retirement 57%
I am not currently saving for retirement 16%

401(k) Hardship Withdrawal

Only 6% of employees with a company sponsored retirement plan reported taking out a loan against their contributions in the past 6 months. Since the number of employees who reported taking out such a loan is small, the data should be used directionally only. Nonetheless, the top reasons for taking such a loan included paying their monthly mortgage and paying for educational related expenses.

Table 43
"Within the past 6 months, have you taken out a loan against your company sponsored retirement plan contributions, such as the money in your 401(k) account?"
Base: Employed U.S. adults who have a company sponsored retirement plan

  2 Qtr 2008
EE
4 Qtr 2007
EE
Yes 6% 5%
No 94% 95%
  N=785 N=827

Table 44
"What is the main reason why you have taken out a loan against your company sponsored retirement plan contributions? Please select one.""
Base: Employed U.S. adults who have taken out a loan against their company sponsored retirement plan contributions

  2 Qtr 2008
EE
4 Qtr 2007
EE
To pay my monthly mortgage 15% 21%
To pay for educational related expenses 7% 0%
To purchase a home 6% 4%
To pay for medical expenses 4% 27%
To pay for home improvements 3% 6%
To pay funeral and/or burial expenses 0% 0%
Other 66% 41%
  N=40 N=45

Caution: due to small sample sizes data should be used directionally only

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