Based on conversations with thousands of employers from a variety of industries, Fidelity has identified the top employee benefit trends that employers will focus on and prioritize this year.
“Issues like the ‘great resignation,’ employee burnout and changes to what employees value has prompted an increasing number of employers to examine how they can leverage their employee experience to attract and retain workers, increase employee satisfaction and improve overall wellness,” the firm observes.
Moreover, employers increasingly view the benefits offered with a “diversity and inclusion lens” to ensure their benefits programs support all employees, including underrepresented groups—all while maintaining culture in a changing work environment and expanding well-being while managing costs and risks, the firm maintains.
With that as background, Fidelity’s top benefit trends for 2022 follow.
1. More ESG investment options in workplace savings plans
At end of 2020, nearly one in five workplace savings plans on Fidelity’s platform offered at least one ESG fund, with significant interest among nonprofit and faith-based organizations. And proposed guidance by the Department of Labor would make it easier for employers to add an ESG investment option to their workplace savings plan. “Coupled with recent Fidelity research increasing interest among employees, especially younger workers, we expect ESG funds to become increasingly available as an investment option in workplace savings plans,” the firm says.
2. Addition of retirement income options
Citing data from EBRI’s 2021 Retirement Confidence Survey, Fidelity notes that 78% of workers are interested in putting some of their retirement savings into an investment option that would guarantee them monthly retirement income. In addition, enactment of the SECURE Act has reduced the fiduciary risk for employers and made it easier for them to provide annuities as a retirement plan distribution option.
As a result, a growing number of employers are considering adding some type of guaranteed income option to their workplace savings plan to help older workers convert their retirement savings into a guaranteed income stream, the firm notes.
3. Helping employees create an emergency savings fund
According to Fidelity, the pandemic has highlighted the importance of having an emergency fund to help employees avoid tapping their retirement savings to cover unexpected financial emergencies. And a recent survey by the firm on savings goals finds that workers recognize the benefits of having an emergency fund, as “emergency savings” was the highest reported savings goal. At the same time, however, the survey found that nearly half of workers have less than three months of expenses saved.
As a result, Fidelity notes, a growing number of employers are exploring adding an emergency fund option that would allow employees to contribute directly from their paycheck, while financial firms are creating tools to help investors with a variety of savings goals, including contributing to an emergency fund.
4. Student debt repayment options
Employers have been focused on helping their workers manage their student debt for several years, Fidelity observes, noting that its recent benefits study found that 42% of companies surveyed provide some type of student assistance. However, millions of borrowers are expected to have to start repaying their loans again in 2022, many for the first time in nearly two years. Consequently, Fidelity expects to see an increasing number of employers exploring ways to help their workers address their student loan debt.
5. ‘Dependent-related benefits’ that provide caregiving support
Employers are recognizing the growing number of workers that serve in a caregiving role and the role that caregiving benefits can play in retaining employees. According to a recent Fidelity study, more than a quarter of caregivers for adults (28%) left a job, took a leave of absence or shifted to part-time work to provide care. In addition, 42% of those caring for children indicated they’ll “fall apart” if school or professional childcare doesn’t return to normal soon. To address this growing issue, employers are increasingly focused on providing dependent-related benefits to support employees in a caregiving role, such as paid leave, elder care support groups, childcare support and tools to assist parents, the firm notes.
