Healthcare Employers Prioritize Personalized Advice, Use of Financial Professionals

Healthcare employees play a critical role in caring for the increasingly aging U.S. population, but attracting and retaining such talent may require employers to offer more competitive benefits, according to Transamerica’s Retirement Plan Trends in Healthcare Survey, released today.

As U.S. medical staff continue to operate against a backdrop of cost-of-living pressures, inflation and student debt, the survey found that healthcare employers have made progress in improving their retirement offerings, yet still have room to grow.

“While the survey indicates that healthcare organizations are generally satisfied with their current retirement plans, comments show a strong, recurring theme: Employees need simpler, more personalized and more accessible retirement planning support,” Transamerica’s accompanying report stated. “The unique challenges of demanding and unpredictable work schedules make it important for providers to offer proactive communication, flexible education options, user-friendly digital tools and individualized guidance.”

Automatic Features Help, to an Extent

Strong plan design can help boost participant outcomes, but the report showed that it requires proactive effort on both ends. Healthcare employers expressed that while they continue to adopt features that can better support retirement outcomes, such as automatic enrollment, they find it “challenging to move participants from access to action.”

This year, 77% of respondents reported using automatic enrollment, up from 62% who did in 2024. Of that share, however, 64% did not align the automatic enrollment deferral to the contribution the company required to receive the full employer match. Only 5% of respondents automatically enrolled participants at least 6%; 82% of plans automatically enrolled participants at 3% or less; and 1% of plans annually re-enrolled employees who opted out.

The survey found many healthcare employees were participating in their plans, but relatively few (11%) were contributing at levels greater than 7% of pay. Healthcare employers suggested “plan complexity” and “jargon” may have discouraged employee engagement—emphasizing, Transamerica analysts wrote, the importance of participant education, plan design and personalized support.

TDFs Dominate, Retirement Income Intrigues

Aligning with a broader industry trend, target-date funds dominated healthcare employers’ investment lineups, offered by 89% of plans, and were often designated as a plan’s qualified default investment alternative.

Most plans—88%—offered stable value investments, 71% of plans offered managed accounts, and 58% offered or planned to offer collective investment trusts.

Many organizations also reported evaluating or exploring lifetime income options. Their interest generally stemmed from: wanting to prioritize the retirement security of their participants; responding to employee interest; and desiring simplicity, transparency and education about income-oriented investment options.

Promoting Financial Wellness

Aside from refining plan menus and enrollment processes, healthcare employers have also deployed financial wellness offerings as part of their overall benefits packages. The three most-cited pressing participant financial wellness needs—according to responding employers—were healthcare (86%), nondiscretionary living expenses (82%) and basic budgeting and money management skills (78%).

To address employee healthcare costs, 96% of respondents offered health savings accounts, 81% offered wellness discounts such as gym memberships, and 41% offered retiree medical insurance.

Employers most often addressed cost-of-living expenses with tuition reimbursement and/or assistance (91%), employee discount programs (87%) and child or eldercare assistance (73%).

Respondents attempted to improve employees’ basic budgeting and money management skills by offering personalized financial counseling, coaching and planning (80%), help with household budgeting, spending and saving (45%) and student loan debt assistance (39%).

Leveraging Personalized Communication

Healthcare employers most often (90%) reported using virtual one-on-one meetings to communicate with employees about retirement and financial wellness topics. Two-thirds (66%) reported offering one-on-one, in-person meetings. Less often, employers offered group meetings, with 65% offering virtual options and 39% providing in-person meetings.

Employers also reported helping employees plan for the future with educational videos (61%), retirement forecasting tools (42%), personalized investment advice (39%), tailored education for specific populations (27%) and retirement asset consolidation support (24%).

Employers Lean Into Financial Professionals

More than 90% of healthcare employer respondents reported using advisers, consultants or third-party administrators to review their investment options. Since 2024, the last time Transamerica conducted the survey, plans have relied more heavily on adviser support in monitoring provider services and explaining provider fees.

Survey respondents said compliance and administration were their biggest operational challenges, namely: compliance changes, meeting compliance requirements and managing multiple vendors.

Transamerica surveyed 100 healthcare organizations ranging from individual to state, interstate and regional healthcare facilities.