Employee Outlook on Retirement Amid COVID-19 Revealed in New Workplace Wellness Survey

Washington, DC, October 15, 2020 – Greenwald Research (Greenwald), a leading independent custom research firm and consulting partner to the health and wealth industries, today released more results from the 2020 Workplace Wellness Survey, an annual survey produced in collaboration with the Employee Benefits Research Institute (EBRI). The study examines attitudes toward benefits in the workplace as well as a spectrum of financial wellbeing, health insurance, and retirement benefit issues.

The 2020 survey was conducted for several weeks during July and early August. 1,028 workers participated in the survey, ranging in age from 21 to 64. 900 were full- and part-workers and 128 were furloughed workers. These findings reflect the 900 full- and part-time workers. This survey was made possible through funding support from organizations including Cigna, MassMutual, Mercer, Prudential Financial Inc., Segal, Unum Group, and Voya Financial.

An analysis of this survey and the January 2020 and March 2020 Retirement Confidence Survey revealed that retirement confidence remains high, dipping only slightly from January to July 2020. 62% are confident they will have enough money to live comfortably in their retirement, similar to the 65% measured in January and March’s 63%.

Employees appear satisfied with their retirement benefits and it does not appear that COVID-19 greatly affected employees’ long-term feelings and plans about retirement. Complete findings from the Workplace Benefits Survey will be made available to partners. Key findings from the report include:

Workers are generally satisfied with their retirement plans and find those plans easy to understand.

  • Nearly six in ten employees (58%) are satisfied with the retirement plan benefits they receive from their employer.
  • Of those with an employer-sponsored retirement plan, two in three find it easy to understand.
  • 9 in 10 say their retirement benefits contribute to their feelings of financial security, including 55% who say they contribute “a lot.”

Despite COVID-19, most plan participants committed to their retirement plans.

  • Workers plan to retire at a median age of 63. Only 28% have made changes to their expected retirement age, including 18% now planning to retire later.
  • Only 4 in 10 feels financially prepared to retire 5 years earlier than expected due to health issues.
  • Even though half agree that their workplace retirement plan is the only significant emergency savings they have, only 9% have taken a loan from their plan since Feb 1, 2020, the start of the pandemic.
  • Confidence in retirement plans is high with 70% of respondents making no changes to their plan contributions or how those savings are invested.

Education is desired both in preparation for retirement and during retirement.

  • 3 in 10 workers want more education and advice about how much to save and how to invest for retirement.
  • 27% are interested in how to generate income in retirement.
  • Roughly a quarter are interested in learning more about how to transition from work to retirement, and how to manage healthcare in retirement.

Greenwald Research CEO, Lisa Greenwald, summarizes, “I was pleasantly surprised that we didn’t see panicked reactions in these results. Those still working are generally staying the course. Despite rule changes around plan loans and withdrawals, most continue to treat their retirement plan as a tool or an asset for the long-term.”

Complete findings from the Workplace Wellness Survey are available for Partners.

More information on becoming a Partner is available here.

Other Resources

Fact Sheet

About Greenwald Research
Greenwald Research is a leading independent custom research firm and consulting partner to the health and wealth industries that applies creative and quantitative and qualitative methods to produce knowledge that helps companies stay competitive and navigate industry change. By leveraging deep subject matter expertise and a trusted consultative approach, Greenwald offers comprehensive services for weaving rich research stories that answer strategic business questions. Visit greenwaldresearch.com.

About EBRI
The Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute based in Washington, DC, that focuses on health, savings, retirement, and economic security issues. EBRI conducts objective research and education to inform plan design and public policy, does not lobby and does not take policy positions. The work of EBRI is made possible by funding from its members and sponsors, which include a broad range of public, private, for-profit and nonprofit organizations. For more information go to www.ebri.org.

Contact:
For Greenwald:
Mike Mills
mikem@sagefrog.com
267-454-2947

For EBRI:
Betsy Jaffe
Employee Benefit Research Institute
press-media@ebri.org
202.775.6347

###

New Study: Workers Stressed About their Financial Future

New Study Finds Workers Stressed About their Financial Future, but Very Satisfied with Employment-Based Benefits

Benefits Critical to Feeling Financially Secure, Furloughed Workers Most Concerned

WASHINGTON – September 30, 2020 – The inaugural Workplace Wellness Study conducted by the Employee Benefit Research Institute (EBRI) and independent research firm Greenwald Research finds that two in three employees feel stressed when thinking about their financial future. Nearly half of employees are concerned with their household’s financial wellbeing, citing saving for retirement and having savings in case of an emergency as top sources of financial stress. Yet, only 42 percent of employees are satisfied with their financial wellness benefits and would not trade them with their wages; an equal share would be willing to have fewer financial wellness benefits for higher wages.

“Seven in ten employees believe employees need their employer’s help to be healthy and financially secure, and nearly as many feel the employer has a responsibility to ensure the health and financial security of employees,” said Lisa Greenwald, CEO of Greenwald Research.

With some trended results dating back to 2012 or earlier, the Workplace Wellness Survey examines worker attitudes towards employment-based benefits in the workplace, as well as a broad spectrum of financial wellbeing, employment-based health insurance, and retirement benefit issues.

Since the pandemic began, just under three in ten (28 percent) feel their employer’s efforts to improve their overall well-being has increased, and 61 percent say it stayed the same. However, employees rate their employers’ efforts positively, with 48 percent saying their employer has done an excellent or very good job helping them improve their physical wellbeing, and 42 percent say the same about their emotional and financial wellbeing.

The survey also finds that furloughed workers who maintain access to at least one of their employee benefits are less likely to be satisfied with their primary job and employee benefits than other workers. They are also less likely to feel confident in their ability to make informed decisions about their employee benefits.

The Good News: Employment-Based Health Insurance is a Bright Spot

On the positive side, however, nearly half of employees, 47 percent, are extremely/very satisfied with their benefits package, with 58 percent stating that they are satisfied with their employment-based retirement savings plan and 54 percent being satisfied with their current health insurance plan. Majorities indicate they are satisfied with the retirement and health benefits they have now, and do not want to trade their benefits with their wages.

Health insurance continues to be valued: the benefit employees say contributes most to their feelings of financial security. Nearly two-thirds say their health insurance “contributes a lot” to their security, and more than half (55 percent) say their retirement plan contributes a lot to feeling financially secure.  Roughly four in ten cite life insurance, financial wellness, and benefits like accident and critical illness as contributing a lot to their financial security. One-third feel disability insurance contributes a great deal.

“Health insurance remains the benefit employees are most likely to consider when making employment decisions, followed by retirement savings plans, and these benefits play a critical role in employees’ feelings of financial security” said Paul Fronstin, Director of EBRI’s Health Research and Education Program. “Interestingly, the study finds newer benefits, including health wellness programs, critical illness or cancer insurance, and financial wellness programs are increasing in popularity.”

While some were concerned that the pandemic and subsequent financial downturn could lead to employers decreasing or eliminating health care and other benefits, that fear has largely remained unrealized. “Although we’ve heard anecdotal reports that some have terminated benefits coverage for part-time and seasonal workers, employers have largely stayed the course on benefits offered to full-time employees,” said Fronstin.

Open-Enrollment During COVID-19

Three-quarters of employees find their health benefits easy to understand, higher than the six in ten expressing the same level of understanding about their non-health benefits. Employees are confident in their ability to make informed decisions about employee benefits, with two in three stating they are very or extremely confident.

“About half of employees feel their employer has done an excellent or very good job communicating about online benefits resources during COVID, which is important as we go into open enrollment season this year,” said Greenwald. “However, given the pandemic, 37 percent would like more information and guidance during open enrollment than they usually get.” For their next open enrollment, employees are most interested in a portal for selecting benefits, a tool to help make decisions, and online brochures.

Many employees – just under half – say they would welcome advice, either from a third-party benefits advisor or from an online program. Nine of ten surveyed-employees report that they would be likely to use a free online program offering benefit advice, including nearly half who are very or extremely likely.

Employees are also keenly interested in receiving education or advice on how to invest money in their retirement plans and on how much they should be saving for retirement. Three in ten employees take advantage of offered education and advice about benefits. Those that leverage this advice have higher levels of understanding and satisfaction.

Other key COVID-19 related findings include:

  • Since the start of the COVID-19 pandemic, employees report that employers have most frequently reacted by furloughing or laying off workers (26 percent), promoting telemedicine benefits (18 percent), and increasing leave availability (17 percent). Only one percent suspended or cut back benefits.
  • Slightly more than half (54 percent) report their employer has done an excellent/very good job communicating about COVID-19 policies and procedures. Roughly half (49 percent) feel communication about health benefits has been strong, and nearly as many feel their employer has done a good job communicating about mental health and work-life balance during the pandemic.

A summary of the survey report, The 2020 Workplace Wellness Survey, is available at ebri.org.

About the Survey:

The 2020 survey of 1,028 American workers was conducted online July 13 through August 6, 2020. All respondents were age 21-64, and were weighted by age, race, gender and education. This report focuses on those currently employed, with significant differences for furloughed workers called out, including 900 who are currently employed full or part-time in their primary job, and 128 who are currently furloughed from their primary job, but still have access to their employee benefits. The margin of error at the 95% confidence level for the total sample of current workers in this study (n=900) is approximately plus or minus 3.3 percentage points.

“The Workplace Wellness Survey” builds on previous EBRI/Greenwald collaborative studies including “The Health and Workplace Benefits Survey “ held from 2013 through 2018, “The Health Confidence Survey”, held from 1998 through 2012, and “The Value of Benefits Survey” held in 1999 and 2001.

The 2020 WWS was underwritten by Cigna, MassMutual, Mercer, Prudential Financial, Segal, Unum and Voya Financial.

About EBRI:

The Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute based in Washington, DC, that focuses on health, savings, retirement, and economic security issues. EBRI conducts objective research and education to inform plan design and public policy, does not lobby and does not take policy positions. The work of EBRI is made possible by funding from its members and sponsors, which include a broad range of public, private, for-profit and nonprofit organizations. For more information go to www.ebri.org.

About Greenwald Research:

Greenwald Research is a leading independent custom research firm and consulting partner to the health and wealth industries that applies creative quantitative and qualitative methods to help companies stay competitive and navigate industry change. Leveraging deep subject matter expertise and a consultative approach, Greenwald offers comprehensive services to answer strategic business questions. For more information, go to www.greenwaldresearch.com

Loss Aversion and Discomfort with Volatility in an Unpredictable Market

If the markets in 2020 have shown us anything, it is how unpredictable they are, even among professionals. Just 6% of financial advisors and 11% of consumers 55 to 75 years old thought it was highly likely there would be a major market downturn in 2020 according to the 2020 Guaranteed Lifetime Income Study (GLIS) by Greenwald Research and CANNEX.

Among consumers surveyed, just over half think a major stock market downturn is very likely at some point during their retirement. But historically, declines of 20% or more occur about once every six years.[1] While market declines will always be part of investing, those who stay in the market fare better than those who sell during downturns in the long run.

But what about investors who are particularly loss-averse or uncomfortable with volatility? These consumers—who have less invested in equities and higher cash holdings—need a way to invest for retirement that allows them to feel comfortable but also gives them opportunities for returns in order to have enough retirement income. With the market volatility due to the COVID-19 crisis, the unknowns of how and when the market will recover, and the Federal Reserve keeping interest rates near-zero through at least 2022[2], the portfolios of loss-averse investors and those uncomfortable with volatility need some help.

One potential option for these types of consumers could be guaranteed lifetime income (GLI) products. According the 2020 GLIS, both consumers and advisors believe benefits of GLI products include protection against the risk of stock market decline, providing a higher payout than other fixed income investments, and allowing owners to invest more of their other assets in equities to increase their chances for higher returns.

Data from the 2020 Study supports that these products could be ideal for these types of investors. Consumers who are loss-averse or uncomfortable with volatility:

  • See higher value in guaranteed lifetime income,
  • Are more interested in owning a GLI annuity,
  • Are more likely to agree that every portfolio should have money invested in product that guarantees lifetime income,
  • Are more likely to agree that advisors have a responsibility to present clients with GLI products, and
  • Are less confident they are withdrawing money in a sustainable way.

Despite this, these individuals are no more likely than those more comfortable with volatility or those less averse to loss to own an annuity—with or without GLI—and are less likely to have even discussed income strategies with an advisor.

Advisors can play a critical role in recommending GLI products to these types of investors. To do so, advisors need a way to easily identify these types of clients—and this solution needs to go beyond basic risk tolerance questionnaires.

Understanding how clients handle investment loss and volatility is important, both in terms of the financial decisions they make as well as how the cope emotionally during times of market instability or downturns. Updating risk tolerance questionnaires to better measure investors’ reaction to volatility, risk capacity, and risk need can help facilitate better portfolio construction that fits the needs of investors, including those who are loss-averse or particularly uncomfortable with volatility.

Want more on the 2020 GLI Study? Read the top 10 Key Findings from the 2020 GLIS or find out how to get the complete study reports here.

[1] Capital Group, March 4, 2020. www.capitalgroup.com/ria/insights/articles/how-to-handle-market-declines.html

[2]Federal Reserve, June 10, 2020. www.federalreserve.gov/mediacenter/files/FOMCpresconf20200610.pdf

5th Annual Guaranteed Lifetime Income Study (GLIS) Reveals Key Differences Between Advisors and Consumers

In the fifth year of the Guaranteed Lifetime Income Study (GLIS), the study continues to explore consumer attitudes about the value of guaranteed lifetime income and, for the first time, includes an advisor survey that provides an important view of advisors’ opinion of guaranteed income products and the needs of their clients. An eye-opening series of questions exposes discrepancies in perception between consumers and advisors, demonstrating key opportunities for education and client service.

For the top 10 key findings, click here: GLIS 2019 Top 10 Key Findings

For additional supplemental data, click here: GLIS 2019 Supplemental Data

For more information about the study, please contact: Doug Kincaid DougKincaid@greenwaldresearch.com

Confidence in Retirement Security Remains High Despite Pandemic, but Signals Change With Widespread Unemployment

Workers’ Satisfaction With DC Plans Is High, but Reveals Some Crisis Impact

WASHINGTON – April 23, 2020 – The 2020 Retirement Confidence Survey (RCS), fielded in January, found 77 percent of retirees are confident in their ability to live comfortably throughout retirement, down slightly from 82 percent in 2019. Despite the subsequent pandemic, that number barely changed when the survey was re-fielded in late March (76 percent).

Now in its 30th year, the annual RCS is the longest-running survey of its kind, measuring worker and retiree confidence about retirement. It is conducted by the Employee Benefit Research Institute (EBRI) and independent research firm Greenwald Research. The RCS was conducted in early January, prior to the coronavirus crisis that is greatly impacting U.S. and global markets, businesses, and unemployment. Recognizing the impact these events may have had on RCS results and key metrics, the researchers refielded a supplemental survey of key questions from March 20–30, 2020.

Workers also remain surprisingly confident, except when job security was threatened. In January, 69 percent of all workers reported being very or somewhat confident in their ability to live comfortably throughout their retirement years, comparable to 2019. In March 2020, the percentage of workers feeling confident is statistically unchanged at 63 percent. However, those who fear the current pandemic may impact or has impacted their employment status exhibit lower confidence.

“Understandably, retirement confidence is significantly lower among those who say their employment status has negatively changed or anticipate it to negatively change within the next six months. Those who have experienced or worry about negative employment changes lag about 20 percentage points behind other respondents when it comes to confidence in having enough money to live comfortably in retirement, take care of basic needs, and cover medical and long-term care expenses in retirement,” said Craig Copeland, EBRI senior research associate and co-author of the report.

“In an attempt to give some context to the current crisis, the supplemental survey asked which of seven major issues is most critical in America today, and more than a third of retirees identify ‘health care’ as most pressing, followed by a quarter who cite ‘the economy.’ Workers are split evenly between the two. Only 3 percent cite Americans’ retirement readiness as most critical,” said Lisa Greenwald of independent research firm Greenwald Research.

“Retirement confidence continues to be closely related to having a retirement plan,” said Copeland. “Of workers who are confident, 96 percent contribute to a defined contribution (DC) plan, and 94 percent are currently saving for retirement. Good health also impacts confidence, with 68 percent of confident workers citing being in very good to excellent health.”

January’s results show that three-quarters of workers are offered a defined contribution plan, and of those, about 9 in 10 claim they participate. As of late March, these findings remain unchanged. Workers who have a retirement plan, either an employer-sponsored DC plan or an individual retirement account (IRA), overwhelmingly report better retirement savings behaviors. More than 8 out of 10 workers with a retirement plan (84 percent) report that they have personally saved for retirement, compared with 17 percent without a plan. Similarly, workers with a plan are dramatically more likely to report total savings and investments of $100,000 or more (56 percent with a plan vs. 7 percent without).

Plan participants are, and remain, highly satisfied with their employer-sponsored retirement plan. In January, 83 percent were very or somewhat satisfied with their plan overall. The same share expressed satisfaction with the investment options in their plan, which they select primarily based on performance/growth (43 percent), alignment with risk tolerance (34 percent), and consideration of fees (29 percent). While the selection criteria remain the same, satisfaction with plans both overall and with the investment options available is lower, but still strong, in March (76 percent each express satisfaction with the plan overall and with investment options).

Nearly half of workers (48 percent) in 2020 say they tried to calculate how much they need to save for retirement, an influential planning step, up from 42 percent in 2019 and 38 percent in 2018. Four in ten estimate they will need to save $1 million or more, also up from 34 percent in 2019 and 27 percent in 2016. Workers who have attempted this calculation continue to be more confident in their retirement security than those who do not try.

Workers commonly save in their workplace retirement plans. Consequently, 8 in 10 workers (82 percent) expect income from a workplace retirement savings plan (separate from a pension plan) to be a major or minor source of income in retirement, while half of retirees (49 percent) report this is a major or minor source of income.

Furthermore, 57 percent of retirees report that they had savings in a workplace retirement savings plan at the time they retired. Of those, slightly more than 4 in 10 (44 percent) rolled their savings into an IRA, while 3 in 10 (31 percent) kept it in the plan. Retirees with DC plan and/or IRA assets do not report significant withdrawals for income, as 3 in 10 withdraw only the required minimum distribution and nearly as many report that they do not withdraw at all. In fact, three-quarters of retirees state that they aim to maintain, or even increase, their assets.

“Income remains a high priority for retirees. When asked to identify their guiding principle for managing finances in retirement — income stability vs. preserving principal and wealth — 3 in 4 of both retirees (76 percent) and workers (75 percent) select ’Income Stability: Ensuring a set amount of income for life,’” said Greenwald. Also notable, over half of workers suggest they expect a product that guarantees income for life, such as an annuity, will be a source of retirement income for them, whereas only about a third of retirees (36 percent) receive income from this type of product.

At the same time, half of retirees report that their overall expenses in retirement are as they expected. A third of retirees (34 percent in both January and March) report overall expenses in retirement are higher than expected. In January, pluralities of retirees reported that spending in several different categories was as expected, including health expenses. There is some indication of a changing scenario in March, as more retirees indicate spending on entertainment and leisure is higher than expected (21 percent in January vs. 30 percent in March) and more report spending to support a family member is  higher than expected (14 percent in January vs. 21 in March). Experiences with health care expenses were comparable from January to March, with 38 percent reporting higher than expected costs in January and 40 percent in March.

The survey report, 2020 Retirement Confidence Survey Summary Report, is available at www.ebri.org.

About the Survey:
The 2020 survey of 2,042 Americans was conducted online January 6 through January 21, 2020. All respondents were ages 25 or older. The survey included 1,018 workers and 1,024 retirees. In light of the potential impact the COVID-19 pandemic may likely have had on RCS results and key metrics, a supplemental survey of key questions was refielded from March 20–30, 2020. Data were weighted by age, gender, education, household income, and race using Census CPS data to reflect the composition of Americans ages 25 or older.

The survey was underwritten by Capital Group, Columbia Threadneedle, Invesco, J.P. Morgan, LGIMA, Lincoln Financial, Mercer, MetLife, Nationwide Financial, PIMCO, Principal Financial Group, T. Rowe Price, Segal, and Vanguard.

About Greenwald Research:
Greenwald Research is a leading, independent research firm that has been specializing in retirement, employee benefits, and health care research for nearly 35 years. For more information, go to www.greenwaldresearch.com

About EBRI:
The Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute based in Washington, DC, that focuses on health, savings, retirement, and economic security issues. EBRI conducts objective research and education to inform plan design and public policy, does not lobby and does not take policy positions. The work of EBRI is made possible by funding from its members and sponsors, which include a broad range of public, private, for-profit and nonprofit organizations. For more information go to www.ebri.org.

Press Inquiries:

Lisa Greenwald
Executive Vice President
Greenwald Research
LisaGreenwald@greenwaldresearch.com
202.686.0300 ext. 108		 Betsy Jaffe
Director, Marketing and Public Relations
Employee Benefit Research Institute
press-media@ebri.org
202.775.6347