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COVID-19 Creates Gaps Between Employer Actions And Employee Perceptions

·4 min read

Opportunities exist for employers to continue engagement on financial education topics as employees remain focused on retirement readiness, TIAA study finds

NEW YORK, Dec. 18, 2020 /PRNewswire/ -- The COVID-19 pandemic has dramatically increased employers' focus on employee physical and financial health yet has also created gaps between their perceptions about the benefits employees need and their employees' expectations. Sixty-nine percent of employers say they have increased their focus on improving employees' financial wellness during the pandemic, but just one-third of employees feel the increased focus and only one in four feels their employer has increased their focus on helping employees with their retirement preparedness, according to TIAA's Retirement Insights Survey.

(PRNewsfoto/TIAA)
(PRNewsfoto/TIAA)

The survey of more than 1,500 employers and employees highlighted opportunities for employers to continue their engagement on a variety of financial literacy topics in the year ahead. While a majority of employers (74 percent) report they are still actively focused on helping their employees save for retirement, employees are also looking for support in other areas of financial planning and see significant value in programs that offer guaranteed lifetime income in retirement (72 percent), budgeting tools to help analyze spending behavior (60 percent), one-on-one financial wellness coaching (61 percent), health savings accounts (56 percent), and debt counseling (49 percent).

"Many employers are more focused on the immediate financial impact of the pandemic on their employees, but it's important that they look at short and long term challenges as interconnected," said Snezana Zlatar, Head of Financial Wellness Advice and Innovation at TIAA. "Addressing shorter-term challenges such as budgeting and managing debt can be critical to helping employees achieve long-term retirement preparedness, and employers have an opportunity to provide meaningful support across a variety of financial topics that can enhance employees' financial stability."

Other key findings from the survey include:

  • A majority (82 percent) of employers have increased their focus on health and safety amid the pandemic, and seventy-five percent of employees recognize this increased attention.

  • Despite the shift in focus this year, nearly three-quarters of employers say they feel responsible for their employees' financial wellness, and 73 percent still see saving for retirement as a top contributor to employees' overall financial wellness.

  • In terms of concerns, employees and employers are in sync about the risk of not saving enough and outliving one's retirement savings: Roughly six in ten of both groups look at these issues with apprehension.

  • Employers see rising healthcare costs as the biggest issue for attaining financial security in retirement, with 86 percent saying it is a very or somewhat significant issue.

  • When compared with the 2018 TIAA Plan Sponsor Retirement Survey, employers are now more concerned about early withdrawal and loan penalties (61 percent, up from 42 percent in 2018) and investment diversification (50 percent, up from 27 percent), signaling that they may be more focused on the immediate financial impact of the pandemic on their employee's retirement savings over longer-term savings goals.

The survey suggests that employees are also interested in nearly all types of financial education or resources that their employer might offer, with nearly three-quarters saying they'd like more information about their retirement plan and retirement savings in general. While employers recognize the benefits of pre-retirement planning programs (75 percent), and educational resources regarding personal finance (73 percent), 74 percent also said helping employees save for retirement is an area where they say they could use the most assistance, followed by debt management and debt counseling (44 percent).

To see the full survey results, click here.

About TIAA

With an award-winning1 track record for consistent investment performance, TIAA (TIAA.org) is the leading provider of financial services in the academic, research, medical, cultural and government fields. TIAA has $1.2 trillion in assets under management (as of 9/30/2020) and offers a wide range of financial solutions, including investing, banking, advice and education, and retirement services.

1 The Refinitiv Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is a risk-adjusted performance measure calculated over 36, 60 and 120 months. Lipper Leaders fund ratings do not constitute and are not intended to constitute investment advice or an offer to sell or the solicitation of an offer to buy any security of any entity in any jurisdiction. For more information, see lipperfundawards.com. Lipper Fund Awards from Refinitiv, ©2020 Refinitiv. All rights reserved. Used under license. The Award is based on a review of risk-adjusted performance of 39 companies for 2016, 36 for 2017, 35 for 2018 & 2019, and 30 for 2020. The award pertains only to the TIAA-CREF mutual funds in the mixed-asset category. Without such waivers ratings could be lower. Past performance does not guarantee future results. For current performance, rankings and prospectuses, please visit TIAA.org.

2 Based on approximately $1.2 trillion of assets under management across Nuveen affiliates and TIAA investment management teams as of 9/30/20.

TIAA-CREF Individual & Institutional Services, LLC, Member FINRA, distributes securities products.

@2020 Teachers Insurance and Annuity Association of America-College Retirement Equities Fund, 730 Third Avenue, New York, NY 10017

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SOURCE TIAA