Findings from a bi-annual survey of retirement plan decision-makers in the higher education sector show that the defined contribution (DC) plan is the No. 1 most important benefit for attracting and retaining talent.
What’s more, 90% also agree that a DC retirement plan helps attract high-quality employees, and 87% agree it helps retain high-quality employees. And, in response to staffing pressures and the pandemic, half (50%) of institutions report starting or increasing the employer match to the retirement plan since January 2021.
This is according to research conducted by Voya Financial, which consists of an online survey among retirement plan decision-makers at more than 300 higher ed institutions, and in-depth interviews among a select group of decision-makers.
Following DC plans in the rankings were paid-leave benefits and a defined benefit retirement plan. Overall, attracting and retaining staff were found to be, by far, the greatest challenges facing higher ed institutions—with 80% agreeing that attracting and retaining high-quality administrators is much more important today, following the pandemic.
Voya’s research also found that many colleges and universities include a description of their retirement plan in their offers to prospective job candidates, with some noting that the value of their retirement and health insurance plans is more important to staff and prospective staff than other employee benefits, including non-traditional benefits.
“While benefits can play a pivotal role for many organizations to help attract and retain talent today, those in the higher education sector are faced with even more-complex needs, so it’s encouraging to see the DC plan considered to be a core tool that organizations are using to help address the challenge,” explains Brodie Wood, vice president and national practice leader for Voya’s Education Market. “Knowing there are more opportunities ahead to support organizations through pending retirement legislation is also an important factor.”
To that end, Wood adds that it’s not surprising that 88% of colleges and universities believe government support such as that outlined within the SECURE Act 2.0 will help “incentivize employees to save, improve retirement plans and lower costs for employers going forward.”
Plan Advisors Play a Pivotal Role
Meanwhile, as the retirement plan rises in importance, the role of the advisor is also growing in support. According to Voya’s research, two out of three (67%) higher ed organizations rely on the services of a plan advisor or consultant—of those who do not, nearly all plan to hire one in the next year.
When it comes to the services provided by plan advisors, organizations report a wide range of support functions, including plan design, investment review/selection, fiduciary and regulatory support, plan compliance, plan transitions and provider due diligence, as well as setting up participant education programs and designing financial wellness programs.
What’s more, while 86% of organizations agree more can be done to help employees make well-informed decisions on how to optimize their benefit dollars across workplace benefits and savings, an even greater amount (90%) agree financial guidance and advisory services offered through the workplace are a highly valued component of the overall benefits offering.
Holistic Benefits
Beyond offering a DC plan, Voya found that there is widespread agreement among plan sponsors that employees face considerable challenges when it comes to their ability to save for retirement, including:
- caregiver responsibilities (87%);
- student loan debt (85%); and
- the impacts of inflation (84%).
As a result, some are addressing these challenges through wellness programs such as assistance with student loan repayment (49%) and planning for caregivers and employees with special needs and disabilities (42%). Moreover, 83% of respondents consider the idea of matching student loan payments with a retirement plan contribution as more important today than it was pre-pandemic.
“When you consider today’s job market with more competition for companies to find staff in general, in most cases, higher ed institutions are not able to compete with the benefit of flexibility that many jobs outside the sector offer today—such as the desire to work completely remotely, which many colleges and universities do not allow,” adds Wood. “At the same time, these challenges present many unique opportunities for these institutions to look further into their benefits offerings as an area to stand out among their peers.”
The survey was conducted June 29, 2022 – July 19, 2022, by Greenwald Research on behalf of Voya. The in-depth interviews were conducted in August 2022.
