Sixty percent of employees say their employer-sponsored retirement plan contributes a lot to them feeling financially secure, a 5% increase over 2020, according to the “2021 Workplace Wellness Survey,” conducted by the Employee Benefit Research Institute (EBRI) and independent research firm Greenwald Research.
Of those with an employer-sponsored retirement plan, seven in 10 report that they understand their benefits extremely or very well. Six in 10 say they are satisfied with their plan. Of those without an employer-sponsored plan, 60% are interested in one.
Most employees that were surveyed are currently contributing to their plan and receive contributions from their employer. Of those receiving employer contributions, 68% say they are satisfied with the contribution they get. Slightly less than half report that they contribute equal or up to their employer match; another four in 10 contribute more.
Approximately half also say life insurance and financial wellness programs contribute a lot to them feeling financially secure.
Employees say greater employer financial contributions (34%), increased flexibility (i.e., more benefits to choose from) (28%) and more benefits to help with financial well-being (26%) are the most valuable improvements that could be made to their benefit programs.
The 2021 survey of 2,016 American workers was conducted online July 7 through July 27. All respondents were between the ages of 21 and 64.
Additional Benefits to Help Financial Security
Although the majority of employees say they feel the benefits their employers already offer help them feel more financially secure, 49% of employees express at least moderate concern about their household’s financial well-being. Saving for retirement and having savings in case of an emergency are the top cited sources of financial stress. Sixty-three percent say they feel stressed when thinking about their financial future, though this is down from seven in 10 in 2020.
Two in three employees surveyed report that they feel they have enough savings to handle an emergency. Eight in 10 say they are prepared for an unexpected expense of $500 and six in 10 feel prepared for a $5,000 expense.
Still, 83% of employees say they are at least somewhat interested in an emergency savings account that allows them to save through payroll deduction. And more than half (54%) of employees report their retirement savings are the only significant emergency savings they have.
Since the pandemic has exposed many Americans’ lack of emergency savings, retirement plan recordkeepers have been scrambling to create both in-plan and out-of-plan solutions, according to a report from Commonwealth. Participants’ financial wellness and emergency preparedness have also become more important in advisers’ service models.
When employees surveyed in the EBRI/Greenwald Research study were given a hypothetical $600 monthly benefits budget, overall, they allocated the most money into a retirement savings account, followed by an emergency savings account. Although student loan debt is reported as a big problem and a hindrance to saving, and some employers are considering ways to help employees with student loan debt, the employees in the survey allocated the least amount of the hypothetical monthly benefits budget to a plan to pay down student debt.