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The Principal Financial Well-Being Indexsm Executive Summary - First Quarter 2005

Summary of Key Findings

  • Benefits - Have seen a significant decline in the availability of the following benefits offered at SMB firms compared to 1st Quarter 2004: Defined Contribution Plans, Life Insurance, Free Parking, Disability Insurance, Tuition Reimbursement, and Flex Time
  • Benefits - Have seen significant increase in satisfaction levels for employees with Profit Sharing/Bonus Plans, Defined Contribution Plans, Life Insurance, and Health Insurance compared to 1st Quarter 2004.
  • Long-Term Financial Future - Significantly more employees rated long-term financial future number one (36%) in importance compared to 1st Quarter 2004 (31%).
  • Satisfaction - Fewer employees are satisfied with their employer sponsored benefit programs in providing them with the tools they need to save for the future (40%) compared to 1st Quarter 2004 (45%) and 4th Quarter 2002 (54%).
  • Social Security - Majority of employees (51%) expect 25% or less of their future retirement income to come from Social Security. Significantly more younger employees (18-34 years) expect 25% or less compared to workers 45 and older, and significantly more males than females expect 25% or less. Most employees will manage if Social Security fails to provide them with the level of income they expect by postponing retirement (36%) or phasing into retirement by working part-time (32%). 49% of employees are extremely or very concerned about the future of Social Security.
  • Social Security Proposed Reforms - A large majority of employees (89%) are aware of the legislative proposals to reform Social Security by using personal retirement accounts. 36% of employees are very/somewhat comfortable with the idea of managing their own personal retirement accounts - 48% are very/somewhat uncomfortable. 41% of employees noted that the Social Security Report domestic initiative would have a high impact on their personal financial well-being.
  • Personal Concerns - 60% of employees say their top personal concern right now is their long-term financial security, followed by 31% for ability to cover day-to-day expenses. 73% of employees agree that they are concerned that the national debt is having or will have a direct negative impact on their personal financial security.
  • Benefit Communication - Top methods preferred by employees for receiving benefit related information is via print (32%), group meetings (26%), and email communication (22%). A large proportion (41%) of employees said they are currently receiving benefit related information on an annual basis while 24% said they never receive any information. 53% of employees said the amount of information they receive is the right amount while 46% said it is not enough. 48% of employees are very/somewhat comfortable with making benefit-related decisions with the amount of direction and education provided by their employer.
  • Voluntary Benefits - Top Voluntary benefits offered at SMB firms are Dental, Vision, Long-term Disability, Short-term Disability, and Accidental Death & Dismemberment. 61% of employees said they have purchased voluntary benefits through their place of work. The top benefits purchased are Dental, Vision, Long-term Disability, and Short-term Disability. 65% of employees with access to Voluntary benefits at the workplace found value in it.

The Principal Financial Group®, the nation's 401(k) leader, commissioned Harris Interactive® to conduct online research with employees (ages 18+) of small and mid-sized U.S. businesses (firm size 10 - 1,000 employees) about their attitudes and perceptions regarding their financial well being and their current employee benefits. Harris Interactive conducted The Principal Financial Well-Being Index survey of 1,101 employees from February 10-21, 2005 using the Harris Poll Online. With a probability sample of this size, one can say with 95% certainty that the results have a statistical precision of plus or minus 3 percentage points; however, this was not a probability sample. "Propensity score" adjustment was used to adjust for respondents' propensity to be online. This is one in a series of quarterly studies to identify and track changes in the workplace of small and mid-sized (growing) businesses.

Benefits Offered at Small and Mid-Sized Businesses (SMBs)


The top benefits offered at SMB firms are health insurance (89%), defined contribution retirement plans (64%), life insurance (63%), free parking (56%) and disability insurance (47%). In Table 1 below, comparisons can be made with 3 previous year's benefit offerings. There are significant differences between responses from this most recent quarter and 1st quarter 2004 - indicated with "SIG" below.

Table 1
"What types of benefit programs (excluding vacation/holidays) does your company currently offer you?"
Base: 1,101 U.S. Adults age 18+

Company Sponsored Primary Benefits

1 Qtr 2005

1 Qtr 2004

1 Qtr 2003

1 Qtr 2002

Health Insurance

89%

90%

92%

94%

Defined Contribution Plans

64% SIG

70% SIG

72%

74%

Life Insurance

63% SIG

69% SIG

68%

74%

Free Parking

56% SIG

60% SIG

57%

63%

Disability Insurance

47% SIG

52% SIG

52%

55%

Tuition Reimbursement

28% SIG

35% SIG

34%

42%

Profit Sharing/Bonus

26%

27%

26%

26%

Flex Time

23% SIG

28% SIG

30%

24%

Defined Benefit Plans

19%

20%

24%

28%

Financial Planning

10%

11%

NA

NA

Stock Options

9%

11%

12%

9%

Personal Banking Services

7%

8%

10%

NA

Legal Services

5%

9%

NA

NA

Executive Benefits

4%

4%

4%

NA

Child Care Subsidies

2%

3%

2%

3%

On-site Day Care

2%

3%

2%

3%

Other

8%

8%

8%

9%

SIG - varies significantly (95% level) from comparison

Benefit Satisfaction


Upon identifying what benefits they are being offered through their employers, employees were asked to rate their satisfaction with some of the major benefits. Employees are most satisfied with their profit sharing plan (55%), defined benefit plan (52%), defined contribution plan (48%), and their life insurance (48%). In comparing this quarter's results with previous years, there are notable differences in satisfaction levels for a variety of benefits indicated with "SIG". One benefit in particular took a large, significant increase in satisfaction this quarter - Profit Sharing/Bonus Plans. Table 2 illustrates all benefits listed and ratings.

Table 2
"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 satisfaction as an 8, 9 or 10.
Base: varies by benefit offered by employer

Satisfaction with Benefit

1 Qtr 2005

1 Qtr 2004

1 Qtr 2003

1 Qtr 2002

Profit Sharing/Bonus (N=238)

55% SIG
Avg - 7.1

38% SIG
Avg - 6.5

38%
Avg - 6.4

38%
Avg - 6.4

Defined Benefit Plans (N=230)

52%
Avg - 7.2

46%
Avg - 7.0

54%
Avg - 7.1

57%
Avg - 7.4

Defined Contribution Plans (N=706)

48% SIG
Avg - 6.8

43% SIG
Avg - 6.7

40%
Avg - 6.6

50%
Avg - 6.9

Life Insurance (N=718)

48% SIG
Avg - 6.8

40% SIG
Avg - 6.7

42%
Avg - 6.8

50%
Avg - 7.1

Disability Insurance (N=526)

44% SIG
Avg - 6.6

38% SIG
Avg - 6.6

42%
Avg - 6.8

47%
Avg - 6.9

Stock Options (N=75)

43%
Avg - 6.7

32%
Avg 5.8

44%
Avg - 6.8

30%
Avg - 5.9

Health Insurance (N=986)

40% SIG
Avg - 6.3

35% SIG
Avg - 6.2

39%
Avg - 6.4

47%
Avg - 6.7

SIG - varies significantly (95% level) from comparison

Each employee respondent was asked to identify what benefits they would most like their employers to offer, aside from those already offered. As Table 3 shows, consistently we have seen defined benefit plans, profit sharing/bonus plans, and flexible work schedules toping the list of those desired.

Table 3
"Which one employee benefit do you most with that your company would offer you (excluding vacation and holidays)?"
Base: N=1,101 U.S. Adults age 18+

Ranking

Benefits

1 Qtr 2005

1 Qtr 2004

1 Qtr 2003

1 Qtr 2002

1

Defined Benefit Pension Plan

22%

22%

17%

23%

2

Profit Sharing/Bonus Plan

14%

16%

11%

15%

3

Flex time

11%

13%

11%

13%

4

Defined Contribution Plan

9%

7%

7%

4%

5

Tuition Reimbursement

8%

8%

9%

7%

Aside from those benefits employees would like to see added to their employer's benefit programs, they were also asked to identify what benefits they would like to have improved upon. The top 2 benefits mentioned are health insurance (43%) and defined contribution plans (16%) - see Table 4 for additional detail.

Table 4
"Which one employee benefit (excluding vacation and holidays) do you most with that your company would improve upon?"
Base: N= 1,101 U.S. Adults age 18+

Ranking

Benefits

1 Qtr 2005

1 Qtr 2001

1

Health Insurance

43%

40%

2

Defined Contribution Plan

16%

25%

3

Profit Sharing/Bonus Plan

5%

9%

4

Defined Benefit Plan

3%

4%

5

Life Insurance

3%

2%

6

Flex time

3%

2%

Health Coverage Changes


As noted above, health insurance is the top benefit employees would like their employer to improve upon. To better understand what types of changes employees have seen recently in their health coverage, employees were asked to select from a list those changes they've seen in the past 12 months. As illustrated in Table 5, the largest proportion of employees have seen increases in co-pays (42%), deductibles (33%), and reduced medical benefit coverage options (16%). In comparing this quarter's results with those of 1st quarter 2004, there have been some significant changes. Fewer employees this year have seen an increase in co-pays and reductions in medical benefit coverage options - noted below as "SIG".

Table 5
"Over the past 12 months, has your employer made any of the following changes in your health care coverage?"
Base: N=986 U.S. Adults age 18+ (employees with health insurance)

Changes in Coverage

1 Qtr 2005

1 Qtr 2004

Increased employee co-pays

42% SIG

51% SIG

Increased employee deductibles

33% SIG

36% SIG

Reduced medical benefit coverage options

16% SIG

21% SIG

Offered additional medical benefit coverage options

9%

9%

Moved to HRA or MSA plans

3%

5%

Eliminated retiree health care benefits

2%

2%

Eliminated employer-sponsored health care benefits

1%

2%

None of these changes have occurred

44% SIG

35% SIG

 

N=986

N= 1,116

SIG - varies significantly (95% level) from comparison

Benefit Importance


All employee respondents were asked to rate a group of benefits in terms of how important they are on a 10-point scale with 10 being "Very Important." As shown in Table 2, a large number of benefits have seen higher satisfaction levels this quarter compared to last quarter. The same cannot be said for the importance of various benefits - health insurance, disability insurance and life insurance have seen declines this quarter in importance. The top rated benefit in terms of importance continues to be health insurance (89%), followed by defined contribution (73%) and defined benefit retirement plans (53%).

Table 6
"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 as an 8, 9 or 10.
Base: 1,101 U.S. Adults age 18+

Benefit

1 Qtr 2005

1 Qtr 2004

1 Qtr 2003

Health Insurance

89% SIG
Avg - 9.1

92% SIG
Avg - 9.3

88% SIG
Avg - 9.2

Defined Contribution Plans

73%
Avg - 8.1

74%
Avg - 8.3

70%
Avg - 8.2

Disability Insurance

53% SIG
Avg - 7.1

58% SIG
Avg - 7.6

56%
Avg - 7.6

Defined Benefit Plans

56%
Avg - 7.1

59%
Avg - 7.5

57%
Avg - 7.5

Life Insurance

47% SIG
Avg - 6.8

53% SIG
Avg - 7.3

54%
Avg - 7.4

Profit Sharing/Bonus

45%
Avg - 6.3

47%
Avg - 6.7

41%
Avg - 6.5

Stock Options

19%
Avg - 4.3

20%
Avg - 4.8

18%
Avg - 4.6

SIG - varies significantly (95% level) from comparison

Benefits for Recruit & Retention


SMB firms 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. One out of four employees (26%) continue to agree that their company is concerned about their long-term financial future. There was a significant decline in the proportion of employees who agree that a good employee benefits plan encourages them to work harder and perform better. No changes were seen in those agreeing that good benefit programs keep them working for their current company - see Table 7.

Table 7
"Please indicate the extent to which you agree or disagree with the following statements."
Base: 1,101 U.S. Adults age 18+

Trending Comparison(% of respondents agreeing completely or somewhat)

1 Qtr 2005

1 Qtr 2004

1 Qtr 2003

1 Qtr 2001

Having a good employee benefits plan encourages me to work harder and perform better.

67% SIG

71% SIG

64%

59%

Having a good employee benefits plan keeps me working for my current company.

62%

60%

62%

75%

My company is concerned about my long-term financial future.

26%

25% SIG

26%

28%

SIG - varies significantly (95% level) from comparison

Employee Financial Well Being


In measuring employees' attitudes and perceptions about their financial well-being, a series of different questions were asked. First they were asked to identify how much they agreed with some statements relating to how concerned they are about their long-term financial future and how happy they are about their current well-being. According to Table 8, 1 in 4 employees agree that they are extremely happy with their current financial well-being, and 3 out of 4 agree they are very concerned about their long-term financial future.

Table 8
"Please indicate the extent to which you agree or disagree with the following statements."
Base: 1,101 U.S. Adults age 18+

(% of respondents agreeing completely or somewhat)

1 Qtr 2005

1 Qtr 2004

1 Qtr 2003

I am very concerned about my long-term financial future.

75%

76%

75%

I am extremely happy about my current financial well-being.

27%

34%

25%

Job Security


Job security continues to top the importance chart when compared to long-term financial future and challenging work. In reviewing responses from previous years, there has been an increase in how many employees rate long-term financial future as #1 in importance - 36% in 1st Quarter 2005 and 31% in 1st Quarter 2004.

Table 9
"Please rank the following items in terms of how important it is to you."
Base: 1,101 U.S. Adults age 18+

Respondent Ranked Item #1

1 Qtr 2005

1 Qtr 2004

1 Qtr 2003

1 Qtr 2002

Job Security

47% SIG

52% SIG

49%

50%

Long-Term Financial Future

36% SIG

31% SIG

35%

32%

Challenging Work

17%

17%

16%

17%

SIG - varies significantly (95% level) from comparison

Investment Changes


Changing market conditions can spur some individuals to make changes to their investments. To measure what type of changes employees are making, they were asked to identify if and how they are moving their retirement savings. Based upon response, 70% of employees who have retirement savings are not making changes to how their investments are invested while 30% are - 22% to stable and 9% to volatile.

Table 10
"Given the current stock market and economic conditions, have you made changes in how you have your retirement savings invested - moving from volatile investments to more stable investments."

Changes

1 Qtr 2005

1 Qtr 2004

Yes-I moved from more volatile to more stable investments

22%

19%

Yes-I moved from more stable investments to more volatile investments

9%

8%

No-I have not made any changes

70%

73%

 

N=916

N=577

Satisfaction With Employer Sponsored Savings Tools


Employees were asked to rate how satisfied they are with their employer sponsored benefit program in providing them with the tools they need to save for the future. Over the past years we have seen a decline in satisfaction levels with employer-sponsored benefit programs have been in providing employees with the tools they need to save for the future. There was a significant decline in satisfaction from this recent study to last year.

Table 11
"Overall, how satisfied are you with your employer sponsored benefit program in providing you with the tools you need to save for your future?"
Base: N=1,101 U.S. Adults age 18+

Satisfaction Level

1 Qtr 2005

1 Qtr 2004

4 Qtr 2002

Very/Somewhat Satisfied

40%

45%

54%

Neither Satisfied/Dissatisfied

24%

21%

18%

Very/Somewhat Dissatisfied

36%

34%

28%

Domestic Issues


On average, employees plan to retire at the age of 65. Variations of that average age can be seen when looking at the respondents' age groups. Younger employees (18-34) plan to retire at age 63 on average, while those employees age 55+ plan to retire at an average age of 67½ - see Table 12 for details. As these employees plan retire, they are faced with the dilemma of how to fund their retirement. In previous years employees planned on using Social Security and whatever pension plans or savings they had available. To understand what proportion of employees' retirement income they are planning to come from Social Security today, employees were asked to select a percentage from a provided list - see Table 13. Overall the majority of employees (51%) are planning on 25% or less of their retirement income to come from Social Security. Younger employees are planning on less Social Security than older employees (65% versus 36%).

Table 12
"Realistically, at what age do you plan to retire?"
Base: N=1,101 U.S. Adults age 18+

1 Qtr 2005

Respondent Age Groups

18-34

35-44

45-54

55+

Average Retirement Age

64.7

63.3

65.0

64.5

67.5

 

N=1,101

N=249

N=257

N=370

N=225

Table 13
"What percent of your future retirement income do you plan to come from Social Security?"
Base: N=1,101 U.S. Adults age 18+

1 Qtr 2005

Respondent Age Groups

18-34

35-44

45-54

55+

25% or less

51%

65%

52%

42%

36%

26 to 50%

26%

17%

32%

29%

30%

51 to 75%

16%

14%

14%

15%

23%

76 to 99%

4%

2%

2%

9%

5%

100%

3%

2%

-

6%

6%

 

 

N=249

N=257

N=370

N=225

  • Significantly more employees age 18-34 (65%) expect 25% or less of their retirement income to be from Social Security compared to all other age groups.
  • Significantly more male employees than female employees said they expect 25% or less from Social Security (55% vs. 46%).
  • Since such a large proportion of employees are not planning on much from Social Security, they were asked to identify how they'll manage. Employees noted they would either remain in the workforce longer (36%) or phase into retirement by working part-time (32%). More younger workers (18-34 and 35-44 year olds) said they would start saving more now for retirement compared to the age groups over 45. Table 14 below illustrates how employees say they will manage if Social Security fails to provide them with the income they've been expecting. Employees were also asked to evaluate how concerned they were about the future of Social Security and 49% said they were extremely or very concerned - see Table 15.

    Table 14
    "If the Social Security system fails to provide you with the level of retirement income you've been expecting, which of the following best describes how you would manage?"
    Base: N=1,101 U.S. Adults age 18+

    Action

    1 Qtr 2005

    Respondent Age Groups

    18-34

    35-44

    45-54

    55+

    Remain in workforce longer (postpone retirement)

    36%

    33%

    26%

    46%

    37%

    Phase into retirement (work part-time)

    32%

    33%

    35%

    28%

    35%

    Start saving more for retirement now

    18%

    27%

    26%

    11%

    3%

    Lower standard of living in retirement

    9%

    4%

    10%

    10%

    14%

    Other

    5%

    3%

    3%

    5%

    11%

     

     

    N=249

    N=257

    N=370

    N=225

  • Significantly more employees in the 18-34 and 35-44 age groups said they would manage if the Social Security system fails by saving more for retirement now (27% & 26% versus 11% & 3%).
  • Significantly more employees age 45-54 said they would remain in the workforce longer if the Social Security system fails compared to younger counterparts age 18-34 and 35-44 (46% vs. 33% and 26%).
  • Table 15
    "To what degree are you concerned about the future of Social Security?"
    Base: N=1,101 U.S. Adults age 18+

    Concern

    1 Qtr 2005

    Respondent Age Groups

    18-34

    35-44

    45-54

    55+

    Extremely Concerned

    28%

    31%

    22%

    31%

    25%

    Very Concerned

    21%

    20%

    22%

    22%

    16%

    Concerned

    22%

    18%

    29%

    20%

    24%

    Somewhat Concerned

    24%

    23%

    22%

    23%

    28%

    Not at all Concerned

    5%

    8%

    4%

    3%

    7%

     

     

    N=249

    N=257

    N=370

    N=225

  • Significantly more female employees are extremely concerned about the future of social security compared to male employees (33% versus 24%).
  • Social Security Reform


    Due to current coverage on the future of Social Security, employees were asked if they were aware of the legislative proposals to reform Social Security using individually controlled personal retirement accounts. Overall 89% of employees said they are aware of them - awareness ranged from 81% for younger workers to 99% awareness for workers over age 55. Table 16 shows the proportions. Aside from being aware of the proposed reform, employees were asked to rate how comfortable they were with the idea of managing their own individually controlled personal retirement accounts. Based on response, only 36% of employees are comfortable with the idea while 49% are not - see Table 17.

    Table 16
    "Are you aware of the legislative proposals to reform Social Security using individually controlled personal retirement accounts?"
    Base: N=1,101 U.S. Adults age 18+

    1 Qtr 2005

    Respondent Age Groups

    18-34

    35-44

    45-54

    55+

    Yes

    89%

    81%

    92%

    92%

    99%

    No

    11%

    19%

    8%

    8%

    1%

     

     

    N=249

    N=257

    N=370

    N=225

  • Significantly fewer employees age 18-34 are aware of the legislative proposals to reform Social Security than employees in the older age groups (81% versus 92%, 92%, 99%).
  • Significantly more male employees are aware of the legislative proposals than female employees (94% versus 85%).
  • Table 17
    "How comfortable are you with the idea of managing your own individually controlled personal retirement account in reference to the Social Security legislative reform proposals?"
    Base: N=1,101 U.S. Adults age 18+

    Comfort Level

    1 Qtr 2005

    Employee Age Groups

    18-34

    35-44

    45-54

    55+

    Very Comfortable

    14%

    15%

    21%

    9%

    13%

    Somewhat Comfortable

    22%

    21%

    23%

    23%

    18%

    Neither Comfortable/Uncomfortable

    16%

    20%

    12%

    16%

    13%

    Somewhat Uncomfortable

    23%

    28%

    20%

    22%

    18%

    Very Uncomfortable

    26%

    17%

    23%

    30%

    38%

     

     

    N=249

    N=257

    N=370

    N=225

  • Significantly more male employees are 'very comfortable' with the idea of managing their own individually controlled personal retirement accounts than their female counterparts (22% vs. 6%).
  • Significantly more employees age 35-44 are 'very/somewhat comfortable' with the idea of managing their own individually controlled personal retirement accounts than the older age groups 45-54 and 55+ (44% vs. 32% and 31%).
  • Personal Financial Well Being


    Employees were asked to identify the top two biggest personal concerns they have right now. The top rated concern is long-term financial security (60%), ability to cover day-to-day expenses (31%), and the eroding of their quality of life due to too much time at work/too little personal time (29%). Table 18 shows all concerns. As a follow-up question, employees were asked to what extent they agreed with the statement of "I am concerned the national debt is having or will have a direct negative impact on my personal financial security." Overwhelmingly, 73% of respondents strongly or somewhat agreed with the statement - see Table 19.

    Table 18
    "Which of the following are your top two biggest personal concerns right now?"
    Base: N=1,101 U.S. Adults age 18+

    Concern

    1 Qtr 2005

    Long-term financial security

    60%

    Ability to cover day-to-day expenses

    31%

    Too much time spent at work and too little personal time is eroding my quality of life

    29%

    Staying employed

    27%

    Physical safety and security for my family and me

    15%

    Erosion of my current investment value

    14%

    Other

    9%

    No concerns

    5%

  • Significantly more female employees (36%) than males (26%) said their biggest personal concerns right now include the ability to cover day-to-day expenses.
  • Significantly more employees over the age of 55 said their biggest concerns was the erosion of my current investment value compared to all younger age groups (29% vs. 6%, 12%, and 17%).
  • Table 19
    "To what extent do you agree or disagree with the following statement. I am concerned the national debt is having or will have a direct negative impact on my personal financial security."
    Base: N=1,101 U.S. Adults age 18+

    Opinion

    1 Qtr 2005

    Strongly Agree

    35%

    Somewhat Agree

    38%

    Neither Agree/Disagree

    17%

    Somewhat Disagree

    6%

    Strongly Disagree

    4%

  • Significantly more female employees strongly/somewhat agree (78%) that the national debt is or will have a negative impact on their personal financial security than male employees (69%).
  • Table 20
    "If you could ask a financial advisor one question about your financial picture, what would it be?"

    OPENED RESPONSES

    The Bush Administration has outlined its federal legislative agenda for the next four years. The employee group was asked to rate what impact the various domestic initiatives would have on each of their personal financial well-being. The top three initiatives receiving the most 'high impact' ratings were Social Security Reform (41%), Reforming the Tax Code (32%), and Cutting the National Deficit (27%). Table 21 below provides a list of the domestic initiatives and how employees perceived each.

    Table 21
    "The Bush Administration has outlined its current federal legislative agenda which includes domestic initiatives listed below. Please rate each domestic initiative in terms of what impact you believe it will have on your personal financial well-being with "1" being "Low Impact" and "5" being "High Impact".
    Base: N=1,101 U.S. Adults age 18+

    Initiative

    1 Qtr 2005

    Low Impact

    High Impact

    Social Security Reform

    4%

    41%

    Reforming the Tax Code

    4%

    32%

    Cutting the National Deficit

    5%

    27%

    Increasing our Country's Defense Budget

    8%

    24%

    Curbing Litigation Costs

    18%

    18%

    Immigration Reform

    23%

    18%

    Benefit Communication


    Employers use an assortment of communication methods for providing information on their benefit programs. When employees were asked how they would prefer to receive information about the benefit programs, the top mentioned methods were in print (32%), through group meetings (26%), and via email communication (22%) - see Table 22.

    Table 22
    "How would you prefer to receive information about your employer-sponsored benefit program, including changes to benefit plans?"
    Base: N=1,101 U.S. Adults age 18+

    Receive Information

    1 Qtr 2005

    Print Information

    32%

    Group Meetings

    26%

    Email Communication

    22%

    One-on-One Meetings

    13%

    Intranet Communication

    4%

    Representatives by Telephone

    1%

    Other

    2%

    Employees were asked to identify how frequently they are provided benefit-related information from their employers for use in making benefit decisions. One in four employees (24%) said they never receive information from their employers. For those who received benefit information, 41% of them receive it annually, 12% receive it semi-annually, and 20% receive it quarterly. Very few employees receive information more frequently than quarterly - see Table 23. When asked if the amount of information they receive is enough, the majority (53%) said it is the right amount while 46% said it is not enough. Forty-eight percent of employees said they are very or somewhat comfortable in managing their benefit-related decisions with the amount of direction and information provided by their employer. See Tables 24 and 25 for additional detail.

    Table 23
    "When it comes to making benefit-relate decisions, how often do you receive educational information from your employer to help you make benefit-related decisions?"
    Base: N=1,101 U.S. Adults age 18+

    Receive Information

    1 Qtr 2005

    Never

    24%

    Annually

    41%

    Semi-Annually

    12%

    Quarterly

    20%

    Monthly

    2%

    More Frequently than Monthly

    1%

    Table 24
    "Would you say the amount of benefit-related information your employer provides is the right amount, too much, or not enough to make well informed decisions?"
    Base: N=1,101 U.S. Adults age 18+

    Amount

    1 Qtr 2005

    Too much information

    1%

    Right amount of information

    53%

    Not enough information

    46%

    Table 25
    "How comfortable are you with managing your benefit-related decisions with the amount of direction and education provided by your employer?"
    Base: N=1,101 U.S. Adults age 18+

    Comfort Level

    1 Qtr 2005

    Very Comfortable

    18%

    Somewhat Comfortable

    30%

    Neither Comfortable/Uncomfortable

    25%

    Somewhat Uncomfortable

    17%

    Very Uncomfortable

    10%

    Voluntary Benefits at the Workplace


    In today's workplace, firms are faced with rising benefit costs and have elected to manage some of these costs by introducing voluntary benefits to their programs. Voluntary benefits are those available to the employee at some or full cost. To identify how common voluntary benefits are among SMB employees, respondents were asked to identify what, if any, voluntary benefits their employers offer. The top noted voluntary benefits are Dental (58%), Vision (38%), Long-term Disability (37%), and Short-term Disability (36%). Table 26 below provides a complete list of Voluntary benefit offerings.

    Aside from having access to Voluntary benefits, employees were asked if they'd purchased these voluntary benefits through their place of employment - 61% said they had purchased them (Table 27). As a follow-up question, employees were asked to identify what Voluntary benefits they purchased. The top purchased benefits were Dental (by 67%), Vision (32%), and Long-term Disability (30%) coverage. Overall, 65% of employees found value in having the opportunity to purchase Voluntary benefits at the workplace - see Table 28.

    Table 26
    Employers fund workplace benefits at varying levels - either funded partially or not at all (known as voluntary benefits). Voluntary benefits are made available for employees to elect at some cost to themselves. Employees often pay for these voluntary benefits through payroll deductions from their paycheck. Which of the following voluntary benefits are currently available at your workplace? Please select all that apply."

    Benefit

    1 Qtr 2005

    % with Available

    % purchasing benefit

    Dental Coverage

    58%

    67%

    Vision Coverage

    38%

    32%

    Long-term Disability

    37%

    30%

    Short-term Disability

    36%

    23%

    Accidental Death & Dismemberment

    32%

    17%

    Term Life Insurance

    27%

    19%

    Group Universal Life Insurance

    22%

    12%

    Long-term Care Insurance

    17%

    4%

    Critical Illness Insurance

    14%

    6%

    Property & Casualty Insurance

    2%

    -

    Other

    4%

    4%

    None

    15%

    3%

    Not Sure

    11%

    -

     

    N=1,101

    N=529

    Table 27
    "Have you purchased any voluntary benefits through your place of work?"
    Base: N=824 U.S. Adults age 18+

    Purchase Voluntary Benefits

    1 Qtr 2005

    Yes

    61%

    No

    39%

    Table 28
    "Did you find the opportunity to purchase voluntary benefits at your workplace to be of value to you?"
    Base: N=824 U.S. Adults age 18+

    Opportunity to Purchase

    1 Qtr 2005

    Yes

    65%

    No

    24%

    Not sure

    11%

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