Defined contribution (DC) plans snagged the top stop as the most important benefit to attract talent for higher education institutions, according to new research from Voya.
Administered by Greenwald Research on behalf of Voya, the study featured 301 retirement plan decisionmakers from higher ed organizations and found that 90% of plan sponsors believe a DC retirement plan helps to attract high-quality employees, while 87% said it helps retain high-quality employees. Additionally, Voya’s research reported several colleges and universities are marketing their retirement and health insurance plans to prospective job candidates, more so than any other employee benefit.
“While benefits can play a pivotal role for many organizations to help attract and retain talent today, those in the higher education sector are faced with even more-complex needs, so it’s encouraging to see the DC plan considered to be a core tool that organizations are using to help address the challenge,” said Brodie Wood, vice president and national practice leader for Voya’s Education Market.
Higher education employers are also looking to regulatory and legislative changes for major improvements to retirement savings, the Voya study stated. A majority (88%) of colleges and universities said government support, such as that outlined with current retirement legislation like SECURE 2.0, incentivizes employees to save while lowering costs for employers.
Higher ed institutions value plan advisors
With more employees wanting retirement savings vehicles and more plan sponsors aiming to add them to their benefits plans, the need for advisor support has grown as well. Ninety percent of plan sponsors agreed that financial guidance and advisory services offered through the workplace are a “highly-valued component” of their overall benefits offering, and two out of three (67%) of higher ed organizations rely on the services of a plan advisor or consultant. Of those who currently do not have an advisor, nearly all stated plans of hiring one next year.
“When it comes to supporting the overall retirement readiness of their workforce, employers today face many opportunities within their broad workplace benefits program,” added Wood. “Retirement plan advisors can play a critical role for employers to establish a plan that can both meet their needs as well as guide their employee toward a financially secure retirement. As a result, it remains a focus for us at Voya to offer solutions we know will support the financial professionals we work with and, ultimately, help facilitate better retirement outcomes for their clients.”
Rise in holistic benefit offerings
While holistic features have always been a core component of employee benefit plans, the COVID-19 pandemic derailed employees in their overall wellness and retirement needs. When it comes to their ability to save for retirement, institutions found that their employees are having trouble with caregiver responsibilities (87%), student loan debt (85%), and the impacts of inflation (84%).
As a result, employers said they are tackling these challenges by offering student loan repayment (49%) and planning for caregivers and employees with special needs and disabilities (42%). Eighty-three percent have also said the idea of offering student loan payments in conjunction with a retirement plan contribution is more important today than it was pre-pandemic.
Additional Insights:
- 77% of higher ed institutions currently offer a financial wellness program. Among those who don’t, almost all plan to offer one in 2023
- Of those with a financial wellness program, about 50% plan to expand assistance for caregivers and employees with special needs and disabilities by providing student loan repayment and support for college expense planning
SEE ALSO:
- Americans Point to Inflation for Lack of Retirement Savings
- 3 Things Employees Want Now from Their 401k
- Nonprofits Enhance 403(b) Contributions, Financial Wellness Post-COVID