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What Are the Top 2021 Employee Benefit Trends?

Industry Trends and Research

Based on conversations with thousands of employers, surveys and internal data, Fidelity has shared what it views as some of the top employee benefit trends for 2021. 

Fidelity found that employers are increasingly viewing benefits in terms of diversity and inclusion and how benefits will serve all members of their workforce, as well as how each benefit can contribute to their employees’ overall wellbeing. 

Brokerage Window 

As more workers express interest in specific investments for their retirement savings, a growing number of employers are adding a self-directed brokerage window to their 401(k) and 403(b) plans. Fidelity found that more than one in five workplace savings plans it services offer a brokerage window, which is three times the number of plans with this feature in 2010, based on internal data as of September 2020.

Emergency Savings Fund

The financial impact of the pandemic has highlighted the importance of having an emergency fund to help employees avoid tapping their retirement savings to cover financial emergencies. In fact, recent Fidelity research indicates that 8 in 10 Americans plan to focus on emergency savings in 2021. This is based on the firm’s “12th Annual New Year Financial Resolutions Study,” conducted Oct. 14-21, 2020, by Engine Insights. 

Moreover, a growing number of employers are providing information and resources to help employees understand how to create an emergency fund, as well as exploring adding an emergency fund option that would allow employees to contribute directly from their paycheck.

Workplace Giving Programs

Given many of the events of 2020, including the pandemic, natural disasters, and social justice issues, an increasing number of employers are considering adding a workplace giving program to their benefits platform. 

Additionally, many workers are expecting their employers to offer some type of giving program. A survey conducted by Fidelity in September 2020 among 1,168 Fidelity Workplace Investing participants found that two-thirds of employees felt it was important for their employer to support charitable causes. These programs help employees donate their time and financial support to the communities in which they operate, as well as to charities and causes that are most important to them. 

Student Debt

More than $1.5 trillion in student debt still hinders millions of employees’ ability to save for retirement and other financial goals. What’s more, women and people of color are increasingly affected by student debt, Fidelity further observes. 

With the most recent stimulus package extending a provision allowing for employers to provide a student loan repayment benefit to employees on a tax-free basis, employers continue to focus on expanding tools and support to help these employees manage their debt, according to Fidelity. These include employer contribution programs that make after-tax contributions on their employees’ outstanding student loans and help employees to pay off their debt faster—which in turn allows them to focus on other savings priorities, including retirement.

Mental Health Support

A recent survey found that 7 in 10 employees indicated that the pandemic has been the most stressful time of their entire career, due in part to the large percentage of workers who have had to work from home. While a percentage of the country’s workforce may return to the office in the coming year, Fidelity notes that many employers will continue to focus on providing benefits for their remote workforce, including emotional and mental health support, additional telehealth and telemedicine benefits, and stress management, as well a shift away from “in-person” benefits such as subsidized meals and free parking.

Caregiving Roles

Employers are also recognizing the growing number of workers who also serve in a caregiving role, especially female employees, and the additional stress that can create. In another recent survey, Fidelity found that nearly 4 in 10 women (39%) are considering leaving their jobs due to increased caregiving responsibilities. To address this growing issue, employers are increasingly focused on providing benefits to support for caregivers, such as paid leave caregiver leave, elder care and parent support groups, child care support and tools to assist new parents. 

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