A new study released by the Employee Benefits Group of Sun Life Financial (NYSE:SLF, TSX:SLF) finds that employees value their total benefits offering more than cash—even in this volatile economic environment.
In a nationwide online study, employees were asked to assume they had all the medical insurance their family needed and to distribute 100 points across other benefits based on how much they would value them. Respondents could allocate from zero to 100 points across seven benefits: 401(k)/retirement plans, dental insurance, vision insurance, long-term disability, short-term disability, long-term-care insurance and cash. They were required to assign all 100 points.
Only 33% of participants assigned a value greater than zero to cash—and only 5% of the total assigned a value greater than 30 to cash. In fact, cash was the least utilized category. By contrast, more than 70% allocated a value greater than zero to each of the other six benefits. And nearly half of all respondents indicated they valued a broad combination of benefits—by allocating at least some of their points to six or more benefits.
"What was surprising is that a majority of employees, regardless of their age, seemed to value benefits more than cash," said Michael E. Shunney, senior vice president and general manager of the U.S. Employee Benefits Division of Sun Life Financial. "The current market environment may even be increasing employees' appreciation of those benefits that help them protect their family's financial security."
Of the supplemental benefits evaluated, employees ranked their dental insurance, 401(k)/retirement plans, vision insurance and group life insurance as most valuable.
The study also reveals several other surprising findings about what affects employees' decisions to purchase benefits at their workplace. The research explored such timely questions as:
* How do rising health-insurance costs affect other benefits decisions?
* Does employer funding drive higher benefits election?
* Do life events prompt employees to increase or decrease their benefits?
* Are employees' needs the primary driver of their benefits decision?
* Does how employees learn about their benefits affect their understanding?
* When employees understand their benefits better, do they value them more?
The survey was sponsored by Sun Life Financial and fielded by independent research firm JHA, Portland, Maine. A total of 3,000 completed surveys were analyzed. Respondents had to be either primary or shared employee-benefit decision makers for their households and work for a company with 25 or more employees. The survey was conducted online in December 2008, right after companies' traditional open-enrollment periods and right in the midst of market upheaval. Quotas were established to ensure a reasonable number of participants experienced a "life event" in the past 12 months.
The full research report, entitled "What's Driving Enrollment in Voluntary Benefits Today," will be available this summer at http://www.sunlifemomentum.com/09research.