Employee benefits long have served as a recruitment, retention and loyalty-building tool for the companies that offer them. However, even as employers make benefits programs available to employees, research indicates that they underestimate how very valuable these programs can be, both for employees' well-being and as a means to solidify the company-employee bond during tough economic times.

Just how much do employees value their benefits? According to a study from Sun Life Financial, employees value their total benefits offerings more than cash, even in a tough economic environment. The nationwide study asked employees to assume they had access to adequate medical insurance, and then to rate the value of certain other benefits, along with cash. Specifically, the survey respondents were to allocate a total of 100 points across seven benefits areas-401(k)/retirement plans, dental insurance, vision insurance, long-term disability, short-term disability, life insurance and long-term care insurance-and cash, based on how much they valued the specific benefit, or the cash. Only 33% of the survey respondents assigned a value greater than zero to cash; in contrast, more than 70% allocated a value greater than zero to each of the other six benefits.

Total Compensation Statements can help tell more of the story.

Of the types of supplemental benefits evaluated in the study, those garnering the most points were dental insurance, 401(k)/retirement plans, vision insurance and group life insurance. However, nearly half of the respondents allocated at least some of their points to six or more benefits, indicating that they value a broad combination of benefits.

Similar findings appear in MetLife's most recent annual Study of Employee Benefits Trends. According to this survey, faced with tough economic challenges, employees place more value than ever on their benefits, and increasingly look to the workplace for help in controlling their finances and their personal and financial risks-even if the workplace benefits that help them achieve this are fully employee-paid. More than one in four (41%) said their workplace benefits were the "foundation" of their personal safety net, and a majority (51%) reported that they obtain most of their financial products through the workplace. Additionally, 56% said recent economic events have caused them to have a greater appreciation of their workplace benefits, and 46% said economic conditions have caused them to take a greater interest in understanding the employee benefits available through their employer-statistics that may indicate employees are more open than in the past to company efforts to engage them in benefits consumerism and personal responsibility.

More than company culture or advancement opportunities, employees cited benefits as an important factor in their loyalty to their employer. According to the survey, 75% of the employees said health benefits were an important factor in their loyalty to the company, while 72% said this about retirement benefits and 69% said this about other insurance benefits. Smaller percentages cited advancement opportunities (57%) or company culture (50%) as reasons to be loyal to their current employer. Interestingly, employers severely underestimated the influence of benefits on employee loyalty:

The message in these two surveys is clear: Benefits are an essential strategic investment for employers. Though most employers spend generously on providing an employee benefits program, this "investment" doesn't always have to involve a large capital outlay. As noted above, employees place great value even on those benefits that they pay for in full, meaning that voluntary benefits-as well as traditional plans-can garner the kind of positive employee response that results in a more loyal, motivated workforce.

A recent survey from BlackRock, a national asset management firm, has confirmed something many Americans already know. According to the Survey of 401(k) Participant Attitudes and Behaviors, the vast majority of those who put money into 401(k) plans feel that their retirement savings are more important to them since the financial downturn felt in 2008.

For the survey, 1,000 participants were asked to indicate priorities and concerns that revolve around their 401(k) retirement savings plans. Data from the survey suggests that saving money is the top priority for the bulk of Americans, but the survey also reported that many workers are confused by 401(k) plans and may not be saving properly.

The survey also showed that although Americans are saving money, many feel that the amount they are putting aside will not be sufficient enough to fund their retirement. BlackRock hopes that more effective communication of savings strategies from employers can help turn the tide for the nation's workforce.

What Employers Can Do to Help

Over 70% of those surveyed indicated saving for retirement as their top priority, yet further responses on the survey conversely showed despite the employees' emphasis on savings, many are unsure how much to save. These statistics include:

• Nearly one out of every four participants did not know the rate their employer matched contributions to 401(k) plans.

• 83% of 401(k) contributors only invested the minimum amount to receive a full-match from their employer.

• Less than half of those polled designated their employer's matching rate as their top influence on how much they contribute.

• 33% of survey participants feel automatic escalation features used to increase 401(k) contributions are "very important” savings incentives.

According to BlackRock, employers should be doing more to educate their staff on how to use automatic escalation and company matches to their advantage, otherwise employees will continue to blindly pump money into 401(k) plans, hoping for the best.

Retirement is a Gray Area for Many Employees

Responses to the survey show a general lack of understanding when it comes to the realities of retirement and how to budget retirement savings. Individuals intend to retire by a certain age, yet their savings disagree and put the hopes of a self-funded retirement in jeopardy. The survey found:

• 62% of participants reported beliefs that they will live longer than their retirement savings can fund.

• Nearly 60% of those surveyed would prefer receiving steady retirement income rather than a single lump-sum payment.

• 82% of participants reported having little to no experience managing sums of money greater than $100,000.

BlackRock hopes that these statistics will be a wake-up call to employers who expect their workers to understand complicated financial issues, like longevity risks and the effects of inflation. Otherwise, according to BlackRock, employees will be left to manage their life savings on their own.

Employees are not averse to the thought of receiving professional financial guidance either. About 72% of respondents showed an interest in having their employers suggest well-diversified managed accounts for retirement funding.

What Tomorrow Brings

Thirty years ago, employers devised defined contribution plans as a way for workers to supplement their retirement savings, but as 401(k) and similar defined contribution plans became the principle form of retirement savings, employers have tried their best to meet the needs of America's aging workers.

As the country works to emerge from its economic troubles, employers must take a second look at their defined contribution plans. BlackRock suggests that employers work to increase savings rates now and begin to educate their employees on how to make their money work for them, ensuring the savings necessary to fund happy and long retirements.

Total Compensation Statements can Help Reduce the Confusion…

Total compensation statements are a great way to communicate with your employees. Why not give us a call and see how we can help you enhance communications with your employees.

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act. Along with the Health Care and Education Reconciliation Act of 2010, this legislation will make significant changes to our current health care system.

The Act adds new responsibilities for employers and insurance carriers. While most of the provisions will start in 2014 or later, some provisions are effective right away or within a short period of time after enactment.

Effective 2010

• Small-Business Tax Credit. A tax credit of up to 35 percent of the employer’s health care contribution is available for qualified small employers (any employer with no more than 25 full-time employees and average wages of less than $50,000). This tax credit will increase to 50% starting in 2014 once exchanges are operational.
• Early Retirees. A temporary reinsurance program is provided to employers that offer coverage to early retirees between the ages of 55 and 64.
• Health Plan Changes. 1) Plans must offer unlimited lifetime benefits and annual benefit limits will be restricted. 2) Pre-ex conditions will be prohibited for children under 19. 3) Recissions are prohibited except in the case of fraud. 4) Plans must cover certain preventive health services at no cost to the insured. 5) Dependent coverage age limit extended to 26.
• Federal High Risk Pool. Temporary establishment of a high risk health insurance pool for individuals unable to find insurance elsewhere.

Effective 2011

• W-2 Reporting. Employers must report value of health care benefits provided on employee w-2s, but not as taxable income.
• Higher Penalty Tax on Non-Qualified Health Savings Account (HSA) Withdrawals. Non-qualified withdrawals will be taxed at 20% versus the current 10% penalty.
• Cafeteria Plans. A new Simple Cafeteria Plan is created through which small employers (less than 100 employees) can easily provide tax-free benefits to their employees without the administrative burden of sponsoring a cafeteria plan.
• Standardized Definition of Qualified Medical Expenses. Costs for over-the-counter medications obtained without a prescription will no longer be considered a qualified medical expense.

Effective 2013

• Flexible Spending Account Limits. Annual contribution limits are reduced to $2,500 per year, with CPI increases available in future years.
• Itemized Deduction for Medical Expenses. The Act increases the income threshold for claiming the itemized deduction for medical expenses from 7.5 percent to 10 percent. Individuals over age 65 would be able to claim the itemized deduction for medical expenses at 7.5 percent of adjusted gross income through 2016.
• Higher Payroll Taxes for High Income Earners. The hospital insurance tax rate will be increased 0.9 percentage points for wages over $200,000 for individuals and $250,000 for those filing jointly.

Effective 2014

• Employer Coverage Mandates. Employers with 50 or more employees who do not offer employee health coverage will pay $2,000 annually for each full-time employee, excluding the first 30 full-time employees. The penalty is increased to $3,000 for any full-time employee receiving a federal tax credit for coverage, because his or her employer health coverage is considered “unaffordable.” Coverage is considered “unaffordable” where the employee contributes more than 9.8 percent of his or her income, or the employer contributes less than 60 percent of the actuarial value of the plan.
• Insurance Exchanges. Exchanges are created at the state level starting in 2014, where individuals and small employers can shop for health coverage. Initially, the exchanges would be available to individuals and small groups (less than 100 employees), unless the state opts to cover only groups with up to 50 employees. Starting in 2017, states could open the exchanges to larger groups.
• Wellness Programs. Employers can offer larger rewards, up to 30% of the cost of coverage, to employees for participation in a wellness program or for meeting certain health-related goals.
• Individual Tax Credits. Credits are available for people with incomes up to 400 percent of the poverty level for insurance purchased through an exchange.
• Health Plan Changes. 1) Insurers cannot refuse to issue coverage on any individual due to pre-existing conditions. 2) Higher rates cannot be charged to any individual based on health status, gender or other demographic factors. 3) Coverage cannot be non-renewed or dropped because an individual participates in a clinical trial.

Effective 2018

• High Value Plan Excise Tax. A nondeductible excise tax of 40 percent is imposed on any health insurance plan with combined annual employer/employee premiums exceeding $10,200 for individual coverage and $27,500 for family coverage. The tax would only apply to premiums in excess of the threshold.

• A recession may make it impossible to allocate additional company dollars to benefits, but an employer can give employees time and convenience instead, through various strategies-
  • Set up a direct deposit program for employee paychecks. Depending on the financial institution used, the direct deposit program may be a bridge to discounted financial services, such as free checking, waived ATM fees, and the like.
  • If business needs permit, give employees more control in balancing their work and personal demands through some form of flexible scheduling. This could include flexible hours, summer hours, compressed workweeks and telecommuting. Some employers find that employees on flexible schedules are better performers on the job, because they can more readily attend to personal issues and thus be more focused when at work.
  • Investigate adding voluntary benefits. These no-cost-to-the-employer benefits can add a dimension to your benefits programs that can be difficult to achieve through a traditional benefits package. Employees are able to buy benefits at prices more affordable than what is available in the individual market; they have the convenience of payroll deduction; they also have the convenience of benefits being marketed to them, rather than having to seek them out on their own.
  • Investigate discount programs. In these programs vendors offer their products and services at a discount to a company’s employees. The vendor’s motivation is access to the employer’s workforce, with the hope that the discount will steer buyers in their direction rather than to their competitors.
  • Although many workplaces have gone more casual, others maintain specified dress codes. Employees appreciate when certain days are designated as casual-blue jeans okay-and the atmosphere that can accompany a casual dress day can give the workplace a lift.
• Examine existing benefits programs to see what works and what doesn’t, and ask whether dollars should be reallocated to better meet employee needs. For example, are there medical plan options in which few employees participate? A streamlining of the available options can reduce administrative and program costs alike.
• Some benefits have multiple uses but may have been promoted narrowly, so that employees may not understand their true value. Employee assistance programs (EAPs), for example, may be perceived as a source of help for substance abuse problems, but EAPs also typically offer a wide range of services many employees could avail themselves of, such as childcare and eldercare referral and assistance with financial issues and debt counseling.
• Employees often underestimate the value of their benefits and compensation package, but there’s a good reason for this-many companies neglect to inform employees of what the company spends to make the benefits offerings available. Employees see their own contributions for medical, dental, etc., on their paycheck stubs, but other than during open enrollment-if even then-many companies simply never let employees know what the company pays for employee benefits. Consider distributing “total compensation statements,” which show employees the actual amount the employer is compensating them, through salary, mandated benefits (e.g., Social Security, Medicare), and the company’s employee benefits program.

As the economy improves and benefits budgets become less constricted, these measures can remain in place, continuing to enhance the value of your benefits package in employees’ eyes.

Click on the Contact Us in the main menu in order to discuss how we can help you to communicate with your employees.

• Customization…for your company, using your logo, colors and images; Personalized…to each individual employee.
• Attractive design…which draws your employees’ eyes and attention to their statement—making them want to read it!
• Easy to understand format…striving for clear, concise communication.
• Employee communication…saturating your total compensation statements with important personalized data critical to each employee.
• Charts, graphs and pictures…focusing your employees’ attention on key company strengths and clarifying comparisons.
• Accurate data…we work with you to provide an accurate presentation of each employee’s total compensation package.
• Timeliness…delivering benefit statements to your employees when the communication of total compensation is most effective.

We are committed to each individual employer—to be personable, responsive, and to earn your confidence as we work together producing your employee benefit statements.

• Customized with your company logo
• High quality full-color digital printing on 8 ½ x 11” premium paper
• Windowed security envelope included at no additional cost
• We do the work–minimal data collection required
• Value-priced!
• The layout, colors, design and pie chart are all pre-set.
• The categories of benefits and the actual titles in each of those lines are also pre-set. Additional types of benefits will be combined in the “other benefits” line.
• The descriptive text below each benefit category may be edited, as well as the letter from the leadership. No additional notes or definitions are included.
• A Summary Management Report and PDFs of each statement for reference purposes are available for an additional fee.

BusinessPlans, Inc. (BPI) – myBenefitStatements is a dynamic organization committed to providing innovative solutions to your employee benefit statement needs. We offer a range of benefit statement services dedicated to a two-fold goal of delivering quality, cost-effective employee benefit statements coupled with hassle-free benefit statement project management for our clients.

myBenefitStatements has been providing hassle-free employee benefit statement services for over two decades, so this is nothing new to us. In 2003 we launched our user-friendly myBenefitStatements.com web site. Essentially, we’ve created an online resource center to provide the solution to your benefit statement needs.

Our services are designed to help you maximize the value of your employee benefits program. Our experience assures you of superior service in the design, testing, implementation, and delivery of your custom employee benefit statements – giving you what you need, on time and right the first time or we’ll keep working until you are 100% satisfied.

Our Vision
myBenefitStatements will be recognized as the leader in providing customized employee benefit statement services through superior service to help businesses achieve strategic success and maximize the effectiveness of their benefits program.

Our Approach
myBenefitStatements believes that employee benefit statements should be designed for the needs of each individual company. A custom benefit statement should reflect a definite purpose – not design by accident. Our unique approach involves the following process:

• Discovery – determining goals, needs and resources
• Design – structuring a layout based on each company’s unique characteristics
• Implementation – collecting data, performing calculations and providing proof sample statements for approval before printing and delivering
• Service – day-to-day administration of programs and company assistance

Recent studies show that many employees are confused or frustrated while selecting their benefits (Employee Benefit News, April 1, 2009, p. 17). In some cases self-service online enrollment has become “no service.” Use our open enrollment forms in conjunction with employee meetings/seminars to ensure your employees make informed benefits decisions.

Our new benefits enrollment forms are…

• Customizable to show your benefit offerings
• Easy to understand
• Full-color—enlisting your employees’ attention
• Easy to complete and return on the spot during elections meetings

With more than 20 years of employee communications experience, myBenefitStatements is your skilled partner. We collaborate with hundreds of brokers and employers all over the country to create effective employee communications tools. Hard copy, easy to complete forms from myBenefitStatements are one of our specialties.

To see samples and request a price quote, visit www.myBenefitStatements.com or contact Sarah Fakan at (800) 865-4485 ext. 104. If email is more convenient, please send us an email at Info@myBenefitStatments.com

When they compared the results with the previous survey, they saw a significant increase in employee satisfaction with their benefits. In fact, they described the increase as “off the charts!”

Our client believes that a contributing factor to this huge growth in their employees' perception of their benefits is employee benefit statements.

• Boost morale
• Show each employee a picture of their total compensation
• Connect with each employee using personalized communications
• Reinforce employees’ sense of value to the company

Employee communication is critical. You can communicate the value of your benefits program through attractive and affordable benefit statements showing your employee the value of their total compensation in an easy-to-understand format.

Your customized employee benefit statements can be presented in a 1-page, newsletter style or tri-fold format. Whatever your needs – myBenefitStatements has the solution!

Open enrollment election and confirmation forms are also available.

–2005/2006 Employee Job Satisfaction and Retention Survey from Salary.com

How many employees did you replace last year? You do the math and then compare the replacement cost with the fee for total compensation statements.

The typical employer can provide a total compensation statement for every employee at a fraction of the cost of replacing just one employee! Why wouldn’t you use benefit statements?

Check out samples of our benefit statements or request a benefit statement services quote.

• Attracting new employees
• Communicating total compensation to your employees
• Improving employee morale
• Reducing employee turnover
• Retaining the best employees (employee retention)
• Providing additional benefits at low cost to your employees

Then benefit statements are right for you! You’re spending many thousands of dollars providing your employees with statutory and fringe benefits – shouldn’t you be getting your money’s worth?

You want a team of creative professionals who understand your industry, your business, and how to communicate with and motivate your employees. You want someone who can customize your benefit statements to meet the needs of your participants while relieving the Benefits Department of unnecessary detail work. You want to partner with an organization that delivers on the expectations it sets, and who keeps the focus on producing the outcomes you need to achieve.

Choose myBenefitStatements and allow our experience and expertise to work for you. myBenefitStatements offers added value to you through personal, professional, and dedicated service at a reasonable cost. We won't stop working until we've achieved the look and feel you desire for communicating total compensation to your employees. Whatever your benefit statements needs, we've got you covered!

Simply pick up the phone right now and give us a call or fill out our online request form and we will contact you! Two easy ways to add a valuable resource to your company benefits.