The COVID-19 pandemic has dramatically increased employers’ focus on employee physical and financial health yet has also created gaps between their perceptions about the benefits employees need and their employees’ expectations. Sixty-nine percent of employers say they have increased their focus on improving employees’ financial wellness during the pandemic. Still, just one-third of employees feel the increased focus. Only one in four feels their employer has increased their focus on helping employees with their retirement preparedness, according to TIAA’s Retirement Insights Survey.
The survey of more than 1,500 employers and employees highlighted opportunities for employers to continue their engagement on various financial literacy topics in the year ahead. While most employers (74 percent) report they are still actively focused on helping their employees save for retirement, employees are also looking for support in other areas of financial planning. They see significant value in programs that offer guaranteed lifetime income in retirement (72 percent), budgeting tools to help analyze spending behavior (60 percent), one-on-one financial wellness coaching (61 percent), health savings accounts (56 percent), and debt counseling (49 percent).
“Many employers are more focused on the immediate financial impact of the pandemic on their employees, but it’s important that they look at short and long-term challenges as interconnected,” said Snezana Zlatar, Head of Financial Wellness Advice and Innovation at TIAA. “Addressing shorter-term challenges such as budgeting and managing debt can be critical to helping employees achieve long-term retirement preparedness, and employers have an opportunity to provide meaningful support across a variety of financial topics that can enhance employees’ financial stability.”
Other key findings from the survey include:
- A majority (82 percent) of employers have increased their focus on health and safety amid the pandemic, and seventy-five percent of employees recognize this increased attention.
- Despite the shift in focus this year, nearly three-quarters of employers say they feel responsible for their employees’ financial wellness, and 73 percent still see saving for retirement as a top contributor to employees’ overall financial wellness.
- In terms of concerns, employees and employers are in sync about the risk of not saving enough and outliving one’s retirement savings: Roughly six in ten of both groups look at these issues with apprehension.
- Employers see rising healthcare costs as the biggest issue for attaining financial security in retirement, with 86 percent saying it is a very or somewhat significant issue.
- When compared with the 2018 TIAA Plan Sponsor Retirement Survey, employers are now more concerned about early withdrawal and loan penalties (61 percent, up from 42 percent in 2018) and investment diversification (50 percent, up from 27 percent), signaling that they may be more focused on the immediate financial impact of the pandemic on their employee’s retirement savings over longer-term savings goals.
The survey suggests that employees are also interested in nearly all types of financial education or resources that their employer might offer, with nearly three-quarters saying they’d like more information about their retirement plan and retirement savings in general. While employers recognize the benefits of pre-retirement planning programs (75 percent) and educational resources regarding personal finance (73 percent), 74 percent also said helping employees save for retirement is an area where they say they could use the most assistance, followed by debt management and debt counseling (44 percent).
