STUDY OF EMPLOYEE BENEFITS: 2006 & BEYOND - Prudential

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Study Overview For many U.S. businesses, employee benefits have become a balancing act. With health insurance premiums continually on the rise, some employers have cut back on other company-paid benefits or shifted a greater share of the cost to their employees. At the same time, plan sponsors want to help protect the financial security of their employees, many of whom rely on certain workplace benefits—such as life, disability, and long-term care insurance—as an important part of their overall financial plan. Furthermore, employers still recognize that a competitive benefits program is important to attracting and retaining talent. The primary objective of Prudential’s “Study of Employee Benefits: 2006 and Beyond” is to better understand the evolving employee benefits marketplace and provide insight into the future. This research identifies current and future employee needs and how employers plan to respond to those needs. Research Objectives We surveyed a representative cross-section of plan sponsors and plan participants about a wide range of topics, including: What are employees’ top financial and lifestyle concerns? What role will employee benefits play in the workplace of the future? Who will be the influential decision makers? What benefits will be offered and who will pay for them? Will cost-shifting increase? Are employees getting the details they need to make informed decisions? How will technology impact the delivery of services? Will the growth of work/life balance programs continue? As the workforce grows more diverse, what impact will this have on employee benefits? Five Key Themes Emerged from This Research 1. Benefits Matter: Eight in Ten Plan Sponsors Remain Committed to Offering Competitive Benefits Programs 2. Teach Them Well: Employees Want Greater Support in Understanding and Using Their Financial Benefits 3. Lifestyle Benefits Offer Win/Win Solution: Healthy Lifestyle Emerges as a Holistic Desire for Employees and a Cost-Reduction Strategy for Employers 4. Positive Online Outlook: Online Tools Are Popular and Opportunities Exist to Improve Utilization and Performance 5. The Progressives: A Small But Growing Segment of Plan Sponsors 2
Methodology This study surveyed a broad cross-section of employee benefit professionals from companies spanning various industries, company sizes, and geographic regions. Supplemental interviews were conducted with employees of similar size firms regarding their financial and lifestyle concerns and attitudes toward addressing those needs at the workplace. This allows us to compare and contrast opinions of employers and employees on key benefits issues. All interviews were conducted by GfK NOP, an industry leader in market research. Profile of Plan Sponsor Study Plan sponsor results are based on online surveys conducted in February 2006 of 1,218 benefits decision makers. Respondents include executives, owners, human resources professionals, and financial management professionals. The survey sample covers all industries, including government, and is nationally representative of all U.S. businesses with at least 50 full-time, benefits-eligible employees. The data shown in this report is weighted to reflect the actual proportion of U.S. businesses by size and region based on Dun & Bradstreet business counts. The margin of error is ± 2.0% at the 95% confidence level. Below is a breakdown of survey respondents by region, company size, industry, survey participant job function, years in business, and 2005 sales. Region Number of Employees Industry 31% South 32% West 21% Midwest 16% Northeast 7% 10,000+ 45% 50–99 17% 100–499 19% 1,000–10,000 12% 500–999 7% Construction 9% Wholesale 11% Retail 15% Other 14% Financial 26% Services 18% Manufacturing Job Function of Respondents* Years in Business 2005 Sales or Fee Income Executive/Owner 36% Accounting/Finance/Treasury 30% HR/Employee Benefits 27% Procurement 3% Other 14% 10 or less 19% 11–25 29% 26–50 33% 51 or more 19% Mean 35 Median 26 Less than $50 million 66% $50 million to under $200 million 20% $200 million to under $500 million 7% $500 million to under $1 billion 4% $1 billion or over 3% *Multiple responses accepted. 3
Page 1 and 2: PRUDENTIAL’S GROUP INSURANCE STUD
Page 3: Welcome The cost of employee benefi
Page 7 and 8: Benefits Matter Eight in Ten Plan S
Page 9 and 10: Commitment to Benefits Spans Most C
Page 11 and 12: Benefits Decision Making Is Increas
Page 13 and 14: The Gap Among Top Financial Concern
Page 15 and 16: Voluntary Benefits on the Rise, But
Page 17 and 18: Most Plan Sponsors Do Not Require C
Page 19 and 20: Plan Sponsors and Participants Are
Page 21 and 22: Employee Concerns Extend Beyond Fin
Page 23 and 24: Interest in Lifestyle Benefits Vari
Page 25 and 26: Positive Online Outlook Online Tool
Page 27 and 28: Web Technology is Empowering Employ
Page 29 and 30: Plan Sponsors Want Enhanced Perform
Page 31 and 32: Criteria for Progressive Plan Spons
Page 33 and 34: Progressives Are More In Sync with
Page 35 and 36: Progressives Also Outpace Other Com
Page 37: Progressive Employers Value Persona
Page 40 and 41: Summary of Key Findings Theme One:
Page 42: About Prudential Financial Currentl

STUDY OF EMPLOYEE BENEFITS: 2006 & BEYOND - Prudential

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