STUDY OF EMPLOYEE BENEFITS: 2006 & BEYOND - Prudential

Summary of Key Findings
Theme One: Benefits Matter
Eight in Ten Plan Sponsors Remain Committed to Offering Competitive Benefits Programs
An unexpected finding, considering recent press coverage on benefits cutbacks,
suggests that plan sponsor commitment to offering a competitive employee benefits
package remains quite strong—even in a challenging economic environment. This trend
is true among companies of all size categories, but particularly for larger firms. As plan
sponsors look to balance employee needs with the bottom line, many will reduce their
benefits expenses by increasing employee cost-sharing on contributory plans, offering a
wider range of voluntary benefits, and introducing more flexible plan designs. To further
reign in costs, finance and procurement are increasingly influential in benefits decisions
in larger companies, where the decision process is becoming more complex.
Theme Two: Teach Them Well
Employees Want Greater Support in Understanding and Using Their Financial Benefits
This research highlights gaps between employees’ greatest financial and lifestyle
concerns and employer priorities in terms of addressing those needs. However, many
plan sponsors want to do more and expect to do so in the next five years, to better
meet their employees’ needs. As consumers rely on the workplace for a growing share
of their insurance and savings products, effective benefits communication and education
are becoming more essential. However, many plan sponsors agree that their current
education/communication efforts are lacking, particularly for benefits such as group life,
disability, and long-term care insurance. Over the next five years, more employers will be
tailoring benefits offerings as well as personalizing benefits communications to better
address the diverse needs and life stages of their changing workforce.
Theme Three: Lifestyle Benefits Offer Win/Win Solution
Healthy Lifestyle Emerges as a Holistic Desire for Employees and a Cost-Reduction
Strategy for Employers
As the lines continue to blur between their work and personal lives, employees are feeling
stressed and desire better balance in their lives. A more balanced, healthier lifestyle is
an aspiration for many workers and increasingly, they are turning to their employers for
help in the form of flexible work arrangements and paid time off policies. But lifestyle
issues are equally important for plan sponsors because a healthier workforce leads to
lower medical and disability costs, as well as improved morale and productivity. As more
employers see value in offering employee assistance programs, wellness programs,
disease management, and mental health counseling, access to such plans is expected
to grow significantly by 2010.
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