While Americans feel their finances have improved over the last 5 years, their satisfaction with healthcare benefits and medical costs has declined.
While Americans feel their finances have improved over the last 5 years, their satisfaction with healthcare benefits and medical costs has declined, according to a survey from Towers Watson.
The survey found more US employees are satisfied with their company-sponsored retirement benefits now compared to 5 years ago—perhaps, because they’re focusing on this aspect of life more. According to respondents, a growing number of employees are willing to sacrifice pay for more secure and generous retirement benefits. Fewer would do the same for better health benefits.
The nationwide survey of more than 5,000 fill-time employees found 67% is satisfied with their retirement plans, which is up 13 percentage points from 2009. Most of the increased satisfaction is among younger employees and defined benefited plan participants, according to Towers Watson.
“The economic uncertainty and corporate cutbacks over the past few years have given employees a reason to evaluate their finances and retirement plans,” Kevin Wagner, a senior consultant at Towers Watson, said in a statement. “While more workers are happy with their retirement benefits, they are increasingly concerned that their retirement income will come up short when they exit the workforce. Most employees view their employer plan as their primary retirement savings vehicle, perhaps explaining why they are willing to give up a portion of their paycheck for more generous and secure retirement benefits.”
Only 34% would be willing to pay more for a health plan with more predictable medical costs, but 62% would sacrifice more out of their paycheck for a program with more guaranteed retirement benefits. These numbers differ drastically from 2009, when just 42% would pay more for more predictable health benefits and just 46% of respondents would give up some pay for a guaranteed retirement benefit.
David Speier, a senior consultant at Towers Watson, attributed this change in attitude to rising medical costs. As employers shift a larger share of healthcare costs to workers, employees feel more financially stressed.
“While employees rely on and value their health care benefits, they are clearly not happy about their health care costs,” Speier said in a statement. “At a time when costs are consuming a significant share of their household budget, it’s no surprise that employees are less willing to trade some pay for either more generous health benefits or more predictable costs.”
According to 56%, retirement security has become more important over the last few years, particularly for older workers. While 78% of workers age 50 and older are concerned about retirement security, compared to just 39% of people under the age of 40.
The report’s authors note younger employees are also more attuned to retirement planning, which is a change from 2009. Younger employees are more willing to trade off pay for more generous and certain retirement benefits.
“Given employees’ widespread concern about retirement security and readiness, this may be the ideal time for employers to reevaluate their employee benefits and strategies for the future. Addressing employees’ preferences for retirement and health care benefits could help employers provide a more engaging work environment, and at the same time help workers in their efforts to prepare for a comfortable and financially secure retirement,” said Speier.