Employers are failing to offer the benefits their employees want and need. As a result, more participants are expressing dissatisfaction with their retirement plan, finds a report out today by Nuveen.
The report finds that just three in 10 employees at mid- and large-sized American companies “strongly agree” that they are satisfied with their retirement plan, and, 57% do not believe they’ll be able to retire at the federal retirement age (FRA).
Employees are likelier to place significant importance to retirement benefits—when asked about the range of benefits they receive, these benefits are the most likely to be ranked number one in importance by 27% of respondents.
The “Benefits 2.0” research program surveyed 1,500 full-time defined contribution (DC) and defined benefit (DB) U.S. workers to analyze major gaps and socioeconomic impacts of employer-provided benefits, reports Nuveen. It looked at six types of benefits, including insurance, retirement, paid time off, family planning and caregiving, education, and training and wellness programs.
Nuveen experts hope that survey findings push employers to tailor their benefits lineups towards employees.
“This research demonstrates that there are three key considerations for employers when it comes to their benefits lineup,” said Brendan McCarthy, head of Retirement Investing at Nuveen. “First, benefits play an essential role in recruitment and retention so they should be seen as investments, not cost-drivers. Second, the priorities of employees are as diverse as the workforce, making it vital to provide a range of options. Lastly, benefits offered are only as powerful as the way they are understood by the employees, highlighting the importance of clear communication and education.”
Nuveen’s report also highlighted disparities across racial background and age groups, noting that nearly 60% of Black, Hispanic, and Asian workers are unassured on whether they will be able to retire at the federal retirement age, compared to 50% of white workers.
Similarly, Gen Z participants are likelier to be dissatisfied with their retirement benefits than their older peers, and much less confident about their retirement prospects, adds the research. When it comes to job selection, 26% of Gen Zers valued retirement benefits when considering a career opportunity. This group is also most likely to be focused on immediate financial concerns, like education benefits and tuition assistance, rather than retirement.
“Workers need to start actively planning for their retirement from the day they begin working, but employers can also take steps to educate employees on the importance of maximizing retirement benefits and help them to address day-to-day financial burdens,” said McCarthy.
Clear communications a priority
Nuveen’s survey spotlights the importance of providing clear communication strategies when educating participants about benefits, along with using employee feedback to restructure workplace features. According to the survey, 29% of employees “strongly agree” that their company offers benefits based on employee feedback, and 32% “strongly agree” that their employer “makes it easy for employees to take full advantage of employer-sponsored benefits.”
Furthermore, 34% say their employer clearly communicates information about the retirement plan and 26% believe they have enough clarity about how much income they will receive in retirement. In findings from Nuveen, Gen Z respondents were the least certain about their retirement of all cohorts: Only 11% strongly agree they are clear regarding their retirement income prospects.
“Employers offering retirement savings plans now have a powerful opportunity to enhance retirement plan satisfaction and retirement confidence for employees at all stages of life by incorporating a guaranteed retirement income feature into their plans, giving plan participants the certainty of a secure flow of lifelong income once they retire,” said McCarthy.
SEE ALSO:
- Nuveen Extends TDF Platform with New Lifetime Income Series
- Morningstar Retirement, Nuveen Collaborate to Offer TIAA Secure Income Account
- Over Half of DC Investors Lack Longevity Literacy: Nuveen
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
