Employee Benefits: The Surprising Benefits Beyond Retirement You Can’t Afford to Overlook

Inflationary pressures have begun to manifest themselves within the workplace, extending beyond the mere demand for salary increases. Many employees are now turning to their employers for assistance in grappling with the escalating cost of living, resulting in a transformation of the types of benefits both sought after and provided.

While conventional retirement plans and health/dental insurance continue to serve as the fundamental pillars of corporate benefits, assisting employees in achieving their long-term financial aspirations, a recent shift has seen a growing emphasis on programs aimed at aiding workers in addressing short-term challenges exacerbated by the two-year surge in inflation.

A recent survey by the EBRI, encompassing approximately 1,500 workers, unveiled that these employees felt greater stress in accumulating emergency savings and covering monthly bills than in saving adequately for retirement, which typically ranks as their top financial concern.
While health and dental insurance, along with 401(k) retirement plans, dominate the spotlight during open enrollment, employers are increasingly diversifying their benefit offerings to include options that warrant closer consideration.

While workers participating in 401(k) retirement plans may tap into temporary loans against their account balances, such a practice is not always advisable due to factors like disrupting the savings routine and potentially disrupting employer contributions. Permanent withdrawals from these accounts are even less advisable, as they often trigger immediate taxes and potential penalties.

This has led to the rising popularity of separate savings programs tailored to help employees meet emergency and unforeseen short-term needs, as well as programs that educate employees on budgeting and managing credit card debts.

Some employers offer financial assistance, prizes for achieving financial goals, discounts, short-term loans, or other incentives to incentivize participation. Large companies are more likely to provide such benefits compared to their smaller counterparts, who tend to lag in this regard.

Many employers may not initially perceive themselves as responsible for offering financial education to their workforce, but an increasing number are embracing this challenge. Budgeting and acquiring the skills to manage credit card debt are essential changes that can help individuals navigate economic uncertainty. According to Bank of America’s research, two-thirds of consumers express concerns about keeping up with inflation, with seven in ten reporting high levels of financial stress.

Despite the substantial growth observed in retirement account values in recent years for millions of Americans, those holding substantial assets in traditional Individual Retirement Accounts or workplace 401(k)-style plans must remain aware of the eventual tax implications on their balances, thereby not enjoying as much wealth as they might assume.

Given the immediate challenges posed by rising inflation, many workers are likely deprioritizing long-term goals such as consistent contributions to a 401(k) retirement account. Jeff Miller, Vice President at Nudge Global, stated that 60% of the workforce lives paycheck to paycheck and prioritizes immediate survival over long-term financial planning.

Beyond financial concerns, additional benefits that can substantially alleviate stress for certain workers encompass caregiver leaves of absence, flexible scheduling, and menopause assistance. This last category includes access to menopause health specialists, policies such as time off and flexible work arrangements as needed, and health insurance plans covering hormone-replacement therapy.

In addition to traditional health benefits, there’s a growing trend of incorporating wellness incentives into employee health plans. These incentives often include perks like complimentary access to Apple Fitness, participation in Rally and various weight loss programs, fitness tracker apps that offer financial rewards at the end of the year for maintaining a healthy lifestyle, complimentary gym memberships, and a variety of other enticing options.

Such initiatives not only promote physical well-being but also serve as a valuable motivation for insured individuals to stay active and maintain a healthier lifestyle throughout the year. They also provide the added benefit of reducing stress. However, many employees remain unaware of these benefits.

During the EBRI conference, speakers noted a pervasive gap between the benefits offered by employers and what workers believe is available, underscoring the need for enhanced employee awareness. The upcoming open enrollment season, a period when employers enable workers to select new benefits and make changes to their existing ones, presents an opportunity for improvement. However, it is contingent on individuals studying their options and being aware of the choices available, which is not always the case.

Larger employers, as per EBRI’s survey, offer an average of about 5.5 financial wellness benefits despite the existence of at least 16 fairly common options, including those mentioned earlier. A surfeit of choices can lead to confusion.

On average, workers allocate only about 18 minutes to making their open enrollment choices, with the majority of this time devoted to scrutinizing healthcare plans. This prompted speakers at the conference to advocate for continuous efforts by companies to raise awareness about benefits throughout the year.

While employers may not inherently feel compelled to provide financial education to their workforce, the potential benefits are substantial. These include increased employee satisfaction, reduced absenteeism, improved employee retention rates, and greater ease in recruiting new personnel.

Moreover, productivity can witness an upswing, as revealed by the EBRI survey, where 54% of employee respondents admitted that financial concerns distract them at work. A staggering 88% expressed concerns about the sustained impact of high inflation on their finances, with the survey primarily conducted when U.S. inflation was running at a 3.2% annual pace in July. Many employees are unaware of the full extent of benefits their companies offer. Researching company benefits can yield big results.