10 Best Practices for Better Benefit Design
Designing an outstanding benefits program is an important investment; after all, great benefit design is key to helping your business attract (and retain) top-notch talent.
But a truly great benefit program is about more than that—it’s about creating a company culture that encourages and supports employees’ long-term financial wellbeing.
We’re here to give your business the support you need, starting with these 10 best practices for best-in-class benefit design and administration.
- Know the real benefit of your benefit program.
When you offer excellent benefits and an encouraging, supportive company culture, it's not only your employees who reap the rewards. Your business can too—with better talent, greater productivity, and even lower turnover rates.
- Offer meaningful retirement savings benefits.
A 401(k) or 403(b) retirement savings plan is an essential foundation, but profit-sharing programs, defined benefit pension plans, and employee stock ownership plans (ESOPs) give your employees an added benefit for their long-term financial security (and a long-term incentive for career growth).
- Make the process easy for employees to participate.
Take the guesswork out of participating with automatic enrollment and automatic plan escalation features, as well as periodic sweeps to identify (and encourage) eligible employees who don't participate. Principal® can help you get all these features in place.
- Reward long-term savings habits with a boost.
Matching and direct contributions to employees’ retirement savings can be the kind of bonuses that go beyond an immediate reward. They can make a meaningful difference in the lives of your employees and their families, well into the future.
- Help employees build their financial know-how.
The days of providing one handout or holding a single information session are over. By offering a variety of retirement planning resources on an ongoing basis, you can help employees to understand not just how the retirement plan works, but how to use it (and other financial resources) to plan for the future they envision.
With the support of Principal, you can provide seminars and workshops, online resources, educational print materials, dedicated phone help lines, and even one-on-one guidance for truly personal help.
- Use a qualified default investment alternative in your retirement plan.
One alternative could be a lifecycle (target date fund) investment that provides an asset allocation choice to participants. A lifecycle investment automatically adjusts the investment mix to become more conservative as the employee ages.*
- Care for employees' health wellness too.
Comprehensive health, dental, and vision insurance is a hallmark of best-in-class benefit design. So is supplemental group coverage—such as life, critical illness, accident, or long-term care insurance—to help employees stay on track with savings goals and protect their families’ financial wellbeing from the unexpected.
And to push your program above and beyond, consider offering perks like paid or discounted health club memberships, on-site fitness coaches, or other wellness programs designed to help your employees stay healthy and happy (and potentially offset future dependency on medical care too).
- Build flexibility into your benefit program.
Life changes—and so do your employees' health and financial needs. By sponsoring Health Savings Accounts (HSAs) or other types of flexible savings accounts, you give them more options to plan for their healthcare needs.
You may also consider providing dedicated financial assistance for major life events, such as buying a first home, purchasing a car, or saving for a child's education, to help your employees make smarter high-stakes decisions.
- Make it fun.
Think about offering a rewards program for employees who participate in company-sponsored retirement savings and health plans, and even extending benefits to their families. You can also sponsor events to encourage plan participation and boost team morale to boot.
- Support employees' long-term success.
It’s a smart move to invest in employee education and development, through tuition reimbursement, leadership programs, and/or support or sponsorship for attending conferences or seminars. You’ll not only encourage employee retention and career growth, but you’ll enrich your company’s resource pool too.
A healthy, financially thriving workforce with meaningful incentives and opportunities to grow with the company? We call that a win-win for everyone involved.
The Principal Business Owner & Executive Solutions include a range of products and services to support designing your best benefits program, or you can call your Principal representative—we’d be happy to talk one-on-one or schedule an in-person meeting to help you get started.
*The ultimate decision as to whether an asset allocation/investment option is an appropriate investment for a plan and whether it can serve as a QDIA belongs to the appropriate retirement plan fiduciaries.
Retirement professionals are sales representatives of the members of the Principal Financial Group. They do not represent, offer, or compare products and services of other financial service organizations.
Insurance issued by Principal National Life Insurance Co (except in NY) and Principal Life Insurance Co. Plan administrative services offered by Principal Life. Securities offered through Principal Securities, Inc., 800-247-1737, Member SIPC and/or independent broker/dealers. Principal National, Principal Life, and Principal Securities are members of the Principal Financial Group®, Des Moines, IA 50392.
Critical care and long-term care insurance products are not offered through Principal National Life Insurance Company or Principal Life Insurance Company.