Time for businesses to personalize benefit plans?

A recent survey conducted by Franklin Templeton highlights a shifting dynamic in US employment, with workers increasingly seeking personalized and flexible benefits from their employers.

The findings indicate that a large majority of employers (85 percent) have seen an increasing demand from employees for personalized benefits. Additionally, nearly two-thirds (63 percent) of employers recognized that voluntary benefits are gaining popularity among their workforce.

Faced with a wave of demand for flexibility, employers in Franklin Templeton’s annual survey said they are offering more health care options. This includes high-deductible health plans that allow contributions to health savings accounts, which benefit from tax advantages and aid in achieving long-term financial goals.

Financial security remains a top concern for workers, highlighted by 59 percent expressing anxiety over potentially running out of money in retirement, while 55 percent anticipate engaging in some form of work during their retirement years. This concern has spurred interest in more personalized and flexible 401(k) plan options.

The trend toward personalization extends to retirement savings, with 82 percent of workers expressing a desire for customized benefits that align with their individual financial and life-balance goals.

While the research found persistent popularity of target-date strategies in 401(k) plans as a common default option, it also revealed a definite shift toward more tailored investment strategies that consider an individual’s specific income, time horizon, and savings objectives.

The research also points to new opportunities from the SECURE 2.0 legislation, which introduced provisions allowing employers to match employees’ student loan repayments with 401(k) plan contributions.

An 84 percent majority of the surveyed workers agreed getting help on their student loans would be helpful, and nearly half of millennial workers (47 percent) said student debt is getting in the way of their other financial priorities, including homeownership or retirement.