PRUDENTIAL G R O UP INSUR A NCE
SIXTH ANNUAL
STUDY OF EMPLOYEE BENEFITS:
TODAY & BEYOND
Insight into the Next Generation of Employee Benefits
The Prudential Insurance Company of America
751 Broad Street, Newark, NJ
0208136-00002-00
Sixth Annual
STUDY OF EMPLOYEE BENEFITS: TODAY & BEYOND
Table of Contents
Welcome1
Study Overview
2
Methodology3
Key Themes
7
The Growing Importance of the Workplace9
Gauging the Success of Voluntary Benefits
Grappling with a Changing Benefits Landscape
Putting Technology Front and Center47
The Evolving Role of the Broker/Consultant61
25
35
Summary of Key Findings
70
About Prudential
72
WELCOME
The slowly recovering economy and the passage of last year’s health care bill continue to weigh heavily
on the business environment. It is against this backdrop that we introduce our latest research report,
the Sixth Annual Study of Employee Benefits: Today & Beyond, which I am once again pleased to
share with you.
Focused on five themes, this research offers the in-depth perspectives of plan sponsors, plan participants,
and the brokerage community. After six years of conducting this research, we have built a solid
foundation on which to effectively gauge where the industry is headed over the next five years,
and where it was.
In this year’s report, we see a fundamental shift in how employers think about and deliver benefits.
Interestingly, cost looms large, but is not the primary driver of change overall. For 2011, the following
trends have emerged:
Employees are obtaining personal insurance and savings products on the job in greater volume.
Technology has grown in importance, even if it produces uneven results.
Benefits decisions are being made differently—not just to save money but to attract
and retain employees.
Brokers/consultants are changing the way they service their clients and do business.
Employers are happy with their voluntary benefits programs but are looking for ways to
better measure success.
I encourage you to review this report in its entirety and share this information with key benefits
stakeholders in your organization. I’m confident you will find this report a valuable tool as you
plan your benefits strategies for 2012 and beyond.
Sincerely,
Lori High
President, Prudential Group Insurance
1
STUDY OVERVIEW
Today, more than ever before, companies are being pulled in many directions. There is a greater need
within companies to cut costs and run more efficiently. Outside companies, consumers are demanding
better prices and higher quality products. With recent economic trends and market influencers, companies
more commonly are using words such as “collaboration,” “accountability,” “sustainability,” and
“transparency.” This is trickling down to employee benefits departments and decisions as well.
This report shows the changing landscape of benefits around several trends—changes in the
decision-making process, consolidation of carriers, and outsourcing of benefits administration.
Results will highlight who is doing what, what is working well for some, where there have been
changes over the past few years, and what the outlook is for the future.
Research Objectives
For the sixth consecutive year, Prudential has conducted research among a representative cross-section
of benefits plan sponsors and benefits plan participants across the United States. Also, as in our
2010 study, we include the views of employee benefits brokers and consultants.
This year’s study addressed many of the emerging issues and trends facing employers, their employees,
and group insurance intermediaries with respect to workplace benefits, including:
Voluntary benefits offerings and participation
The role and usage of technology in employee benefits
Changes to and current involvement in the decision-making process for employee benefits
Specific employee experiences with employee benefits such as life, disability, long-term care,
and retiree benefits
Objectives, strategies, and roles of benefits brokers/consultants
Five Key Themes from This Research
1. The Growing Importance of the Workplace
2. Gauging the Success of Voluntary Benefits
3. Grappling with a Changing Benefits Landscape
4. Putting Technology Front and Center
5. The Evolving Role of the Broker/Consultant
2
METHODOLOGY
The Sixth Annual Study of Employee Benefits: Today & Beyond was fielded via the Internet during
March and April 2011 and consists of three distinct surveys: one among benefits plan sponsors,
another among benefits plan participants, and the third among group employee benefits brokers
and consultants. This allows us to compare and contrast opinions of employers, employees, and
brokers/consultants on key benefits issues.
This year’s study was conducted for Prudential by the Center for Strategy Research, an independent
Boston-based market research firm.
Overview of Plan Sponsor Survey
Plan sponsor results are based on a national survey of 1,501 employee benefits decision-makers.
Respondents included business executives, business owners, human resources professionals, and
financial management professionals. The survey sample covers all industries, including government,
and is nationally representative of all U.S. businesses with at least 50 full-time, benefits-eligible employees.
Data shown in this report are weighted to reflect the actual proportion of U.S. businesses by company
size, industry, and region based on data from the U.S. Census Bureau. The margin of error is +/- 2.5%
at the 95% confidence level.
Below is a breakdown of survey respondents by survey participant region, job function, industry,
company size, approximate 2010 sales, years in business, and business ownership.
Region
West
25%
Northeast
21%
Job Function
Other
10%
South
32%
Midwest
22%
Accounting/
Finance/Treasury
16%
Executive/
Owner
45%
HR/Employee
Benefits
29%
2010 Sales or Fee Income
Years in Business
Under $10 million
17%
$10 million to
under $25 million
21%
$25 million to
under $50 million
14%
$50 million to
under $200 million
14%
$200 million to
under $500 million8%
$500 million to under $1 billion 7%
$1 billion or more
8%
Don’t know
11%
Fewer than 10
9%
10–1919%
20–4941%
50 or more
31%
Mean
44 years
Median
31 years
Industry
Other
28%
Services
32%
Wholesale
Retail
6%
10%
Manufacturing
4% Health Care
Construction
10%
10%
Business Ownership
Private82%
Public17%
Don’t know
1%
Number of Employees
5,000+
5%
1,000–4,999
17%
50–99
33%
500–999
14%
100–499
31%
3
METHODOLOGY
Overview of Plan Participant Survey
Plan participant results are based on surveys conducted among 1,216 employees, age 22 or older,
who work full time for a company with at least 50 employees. The survey of employees was conducted
during the same time period as the plan sponsor and broker/consultant surveys.
The survey sample is nationally representative of all U.S. workers at companies with at least 50 full-time
employees. Data shown in this report are weighted to reflect the actual proportion of U.S. workers
by gender, region, race and ethnicity, education level, household income, and age based on data
from the Bureau of Labor Statistics and the Census Bureau. The margin of error is +/- 3.0% at the
95% confidence level.
Below is a breakdown of survey respondents by region, age, household income, racial and ethnic
background, gender, education level, as well as employer industry and size.
Region
Northeast
19%
Age
60+
7%
South
35%
West
23%
22–29
18%
30–39
23%
40–49
25%
Midwest
23%
Education Level
Some High School
High School Graduate
Some College or
Technical School
College or Technical
School Graduate
Post-Graduate School
50–59
27%
Household Income
8%
27%
27%
21%
17%
$100,000–
$149,999
17%
$75,000–
$99,999
17%
Under
$50,000
29%
$50,000–
$74,999
25%
Employer Industry
Racial Background
Education13%
Public Administration
13%
Manufacturing12%
Professional Services
9%
Retail Trade
8%
Financial7%
Health Care
6%
Information5%
Construction1%
Other26%
White81%
African American
11%
Asian6%
Other2%
Employer Size
50–9910%
100–49926%
500–9998%
1,000–2,49911%
2,500–4,9999%
5,000–9,9997%
10,000–24,9999%
25,000 or more 20%
4
$150,000
or More
12%
Ethnic Background
Hispanic15%
Non-Hispanic85%
Gender
Male56%
Female44%
Overview of Broker/Consultant Survey
As in 2010, we engaged leading employee benefits brokers and consultants to participate in this year’s
study to help in providing a clearer picture of the current and future trends and issues facing the industry.
The group insurance intermediaries surveyed have the following characteristics:
Focused on employee benefits—over two-thirds spend 75% or more of their time in these activities.
Experienced—more than half (57%) report working in the field for more than 10 years.
Broad product perspective—75% or more sell or service medical, life, disability, dental, and vision
insurance. Half or more sell or service long-term care and other voluntary insurance products.
Work for large firms—nearly 5 in 10 are in companies with 1,000 or more employees.
Work with plan sponsors of all sizes and in all major industries. (On average, less than 25%
of business from clients have fewer than 50 employees.)
Broker/consultant results are based on surveys conducted among 744 group employee brokers/consultants.
We also categorized them into three groups based on the size of clients they predominantly serve:
33% are “Small Market”—60% or more of their business comes from clients with fewer than
100 employees. (On average, 83% of their clients have fewer than 100 employees.)
38% are “Mid-Market”—The majority of their business comes from clients with 100–999 employees.
(On average, 56% of their clients have between 100 and 999 employees.)
35% are “Large Market”—50% or more of their business comes from clients with 500 or more
employees. (On average, 76% of their clients have 500 or more employees.)
The survey of group employee brokers/consultants was conducted during the same time period
as the plan sponsor and plan participant surveys. The margin of error is +/- 4.0% at the 95%
confidence level.
5
METHODOLOGY
Below is a breakdown of survey respondents by size of firm, size of clients served, region, age,
gender, years in employee benefits and top employer industries.
Size of Broker/Consultant Firm
Age
Size of Clients Served
65+
4%
5,000+
23%
1,000–4,999
21%
Fewer
than 100
35%
100–999
21%
55–64
19%
45–54
29%
Under 35
15%
35–44
33%
Gender
Top Employer Industries*
Male59%
Female41%
Manufacturing40%
Professional/Scientific/37%
Technical Services
Health Care/Social Assistance 28%
Finance/Insurance27%
Educational Services
19%
Public Administration/Government16%
Construction6%
Retail Trade
14%
Information13%
Other Services
12%
(except Public Administration)
Administrative/Support/12%
Waste Management/
Remediation Services
Transportation/Warehousing8%
Accommodation/Food Services 7%
Region
Northeast
28%
West
24%
South
26%
Midwest
22%
Large Market
29%
Small Market
33%
Mid-Market
38%
Years in Employee Benefits
5 years or fewer
6–10 years
More than 10 years
19%
24%
57%
*Benefits brokers/consultants were asked to indicate the three industries in which they have the highest concentration of clients. Numbers will
add up to more than 100%.
6
KEY THEMES
This report examines some of the most pressing
issues facing the benefits industry and projects
how those trends will evolve over the next five years
based on insights from plan sponsors, plan participants,
and group insurance intermediaries. Following are
the key themes that emerged from the research.
7
8
The Workplace
1
THE GROWING IMPORTANCE
OF THE WORKPLACE
9
9
The workforce continues to be impacted by difficult economic factors,
causing employees to remain focused on short-term needs.
Economic trends such as unemployment and foreclosure rates remain high as inflation puts
pressure on household budgets and weighs on consumer confidence.
Unemployment rates in the spring of 2011 have remained at or slightly below 9.0%. This is
an improvement from the average unemployment rate for 2010 (9.6%), but still represents
close to 14 million people out of work.1
Home foreclosures in the first quarter of 2011 accounted for 28% of all home sales; this is
much higher than foreclosure rates in a normal housing market, which average below 5%.2
Inflation, particularly in food and energy products, pushed the Consumer Price Index (CPI)
up 3.2% over the 12-month period ending in April 2011.3
Plan participants continue to feel the impact of the slow economic recovery or what many have
termed “the new normal.” These answers are consistent with responses from plan participants
in both 2009 and 2010.
When asked how they have been personally affected in the past six months by recent economic
conditions, more than half (53%) report they have been either very or somewhat negatively affected.
About one-third (32%) report the economy having a neutral effect on them, and 15% report
a positive effect.
Those most negatively affected tend to have lower household income and tend to be younger
on average.
IMPACT OF RECENT ECONOMIC CONDITIONS ON PLAN PARTICIPANTS — 2009 TO 2011
200920102011
Positively 17%
13%
15%
Neutral 26%
33%
32%
Somewhat negatively 34%
32%
31%
Very negatively 23%
22%
22%
Unfavorable economic conditions contribute to worker concerns focused on immediate needs such
as job security and being able to pay the bills.
10
When plan participants are asked to rate the importance of various financial and personal
needs, roughly four in five identify job security and making ends meet as “highly important”
to them; among a list of 15 needs, these two concerns rated the highest in importance.
Not surprisingly, almost the same number rate having appropriate health insurance
as highly important. Concerns about debt are still strong with just under 7 in 10 rating
paying off or reducing household debt as a highly important issue.
1 Table A-1: Employment Status of the Civilian Population by Sex and Age, U.S. Department of Labor, Bureau of Labor Statistics, http://data.bls.gov.
2 “Foreclosure Sales Down; Mortgage Rates Dip Again,” The Associated Press, May 26, 2011.
3 Economic News Release: Consumer Price Index Summary, April 2011, U.S. Department of Labor, Bureau of Labor Statistics, http://data.bls.gov.
The Workplace
These results indicate that consumer confidence and financial concerns have not improved
significantly since the recession. Important long-term needs such as having financial security
if a wage earner can no longer work due to a disability or serious illness, needing to save for
retirement, having a financial plan for achieving major financial goals, and having financial
security in the event of a premature death continue to fall out of the spotlight, as workers continue
to focus on the short term.
Fewer than two in three plan participants cite these concerns as “highly important” this year.
At the very bottom of the list in importance are less immediate needs such as having enough
money for a child’s education and finding a trusted source for financial advice, with only 3 in 10
participants rating these issues as “highly important.”
IMPORTANCE OF NEEDS AND CONCERNS
PERCENTAGE OF PLAN PARTICIPANTS SAYING “HIGHLY IMPORTANT”
Highly Important
Having job security
84%
Making ends meet (i.e., paying your mortgage, paying utility bills, buying groceries)
80%
Having appropriate health insurance
79%
Having your retirement savings last as long as you need it to
75%
Maintaining a healthy lifestyle
72%
Paying off/reducing household debt
68%
Reducing your stress level and improving emotional well-being
66%
Having financial security if wage earner can no longer work due to a disability or serious illness
63%
Needing to save for retirement
63%
Achieving a better balance between work and personal life demands
60%
Having a financial plan for achieving major financial goals
53%
Having financial security in event of a premature death
50%
Having to provide for long-term care needs of either yourself or a spouse33%
Having enough money for children’s college education
30%
Finding a trusted source to provide financial advice
28%
11
In the midst of continued economic uncertainty, the workplace has emerged
as an important source for personal insurance and savings products.
Three in 10 plan participants say it has increased greatly. Almost half (47%) report some level
of increase in importance. Only 10% report that the workplace has decreased in importance on
some level.
Those more likely to say the workplace has increased:
Tend to be younger; those under 35 are more likely to say increased (58%) versus those
ages 35–44 (46%), those ages 45–54 (41%), and those ages 55–64 (41%).
Are more likely to have a lower household income (under $50,000).
When asked to rate the importance of the workplace as a source for personal insurance and savings
products currently, almost two-thirds (64%) of plan participants rate it as a “very important”
source. Combined with those who rate the workplace as “somewhat important,” this group grows
to 80% who view the workplace as an important source for these products.
Those rating the workplace as a “very important” source:
– T hose not married (divorced or widowed) are more likely (74%) than those married (63%)
and never married (62%) to say the workplace is a very important source.
– A re more likely to own more financial and insurance products overall.
– Asians are more likely to rate the workplace neutral or not important.
The benefits of personal insurance and savings products offered in the workplace range from
convenience and price to a more financially secure workforce. As economic trends continue to
buffet plan participants, these benefits will take on even greater importance and employers
who offer competitive benefits packages will be more desirable.
EXTENT WORKPLACE HAS CHANGED AS SOURCE FOR PERSONAL INSURANCE AND SAVINGS PRODUCTS
IN THE PAST FIVE YEARS
PERCENTAGE OF PLAN PARTICIPANTS
Neutral
41%
Somewhat
17%
Decreased
10%
Increased Greatly
30%
Don’t Know
2%
12
The Workplace
IMPORTANCE OF WORKPLACE AS SOURCE FOR PERSONAL INSURANCE AND SAVINGS PRODUCTS
PERCENTAGE OF PLAN PARTICIPANTS
Somewhat
Important
16%
Neutral
10%
Very Important
64%
Not Important
9%
Don’t Know
1%
It is those who have been most negatively impacted by the economy in the past six months
who are more likely to rate the workplace as a “very important” source of personal insurance
and savings products. In contrast, those who have felt no effect of the economy rate workplace
importance at lower levels (58% say “very important”).
Those negatively impacted by the economy in the last six months state that the workplace is
growing as a source for personal insurance and savings products. More than half (53%) of those
very negatively impacted and just under half (46%) of those somewhat negatively impacted say
the workplace has increased in importance; this is significantly more than those impacted in a
neutral way (37%).
WORKPLACE AS SOURCE FOR PERSONAL INSURANCE AND SAVINGS PRODUCTS BY IMPACT OF ECONOMY
PERCENTAGE OF PLAN PARTICIPANTS
Neutral
Somewhat
Negatively Very
Negatively
Those saying the workplace is a “very important” source of insurance and savings products
58%
62%
70%
Those saying the workplace has “increased” as a source of insurance and savings products in
the past five years
37%
46%
53%
13
Plan participants own a variety of insurance and savings products as
part of their financial safety net.
Plan participants were given a list of different insurance and savings products and asked which
of them they own. The large majority (94%) of plan participants report owning at least five and
just over 4 in 10 (44%) participants report owning nine or more. Less than 1 in 10 (6%) indicate
they own fewer than five insurance and savings products.
Nearly all plan participants currently own a checking account and/or ATM/debit card, medical
insurance, and auto insurance (95% or greater). Most report having dental insurance (89%),
life insurance (83%), a retirement savings plan (80%), and home insurance (75%). A far lower
percentage report owning an IRA (37%), long-term care insurance (21%), or an individual
annuity (12%).
Workplace retirement savings plans, owned by 80% of participants, are substantially more
common than IRAs (37%) and individual annuities (12%) among plan participants.
INSURANCE AND SAVINGS PRODUCTS OWNED
PERCENTAGE OF PLAN PARTICIPANTS SAYING “YES”
% Currently Own
Checking account and/or ATM/debit card
99%
Medical insurance
97%
Auto insurance
95%
Dental insurance
89%
Life insurance*
83%
Retirement savings plan, e.g., 401(k)/403(b)
80%
Home insurance
75%
Disability insurance (i.e., insurance that provides income in the case of a serious injury or illness for an extended period of time)
66%
Pension plan
42%
Individual Retirement Account (IRA)
37%
Long-term care insurance (i.e., insurance that covers the cost of
an extended stay in a nursing home, assisted-living facility, or
for at-home care)
21%
Individual annuity
12%
*The percent of participants owning life insurance reported in this study is generally higher than reported in industry news.
This could be due to the sample of this study, i.e., full time employees at companies of 50+ employees.
14
The Workplace
Certain insurance and savings products such as checking accounts and
medical insurance show little variation in ownership between age and
income brackets. Others, however, highlight important differentiations.
Demographics and life stage play a role to some extent as to the type of financial products a person
owns, whether out of availability or necessity.
It’s not surprising to find that plan participants in the youngest age bracket tend to have lower
ownership of nearly all products, most notably life insurance, home insurance, retirement plans,
IRAs, and pension plans.
Life insurance ownership jumps from 73% for those under 35 to 82% when participants
reach the 35–44 age bracket. Ownership is significantly higher for ages 45–64.
Long-term care insurance ownership is highest amongst 65+ (38%).
INSURANCE AND SAVINGS PRODUCTS OWNED BY AGE
PERCENTAGE OF PLAN PARTICIPANTS SAYING “YES”
Medical insurance
Under 35 35–4445–5455–6465+*
94%
95%
99%99%
100%
Dental insurance 90%87%91%87%86%
Disability insurance (i.e., insurance that provides income
in the case of a serious injury or illness for an extended
period of time)
61%
68%
69%69%54%
Life insurance
73%
82%91%91%86%
Long-term care insurance (i.e., insurance that covers the cost of an extended stay in a nursing home,
assisted-living facility, or for at-home care)
19%
22%
23%
18%
38%
This indicates a significant difference from all other age groups.
*Please note the base size is too small for significance testing.
15
Employees already rely heavily on the workplace for many personal
insurance and savings products.
As part of the competitive landscape for attracting employees, most employers offer certain benefits
such as medical insurance.
Larger companies usually offer more benefits.
For plan participants in this survey, medical, dental, and disability insurances are mainly provided
by employers (over 90%). Home and automobile insurance and banking products are purchased
largely outside the workplace (greater than 95%).
When it comes to life and long-term care insurance, the workplace is more often the place
where they are purchased. But these products are also purchased outside of the workplace in
many cases (38% for life insurance and 14% for long-term care insurance).
Income and age are drivers of where life and long-term care insurance are purchased.
Those who are older and have more financial resources are more likely to purchase these products
outside of the workplace than younger and lower income workers who rely much more heavily
on the workplace.
WHERE PRODUCTS WERE OBTAINED
PERCENTAGE OF PLAN PARTICIPANTS WHO OWN PRODUCTS
Employer
16
Spouse’s Employer
Outside
Workplace
Don’t
Know
Medical insurance
91%
9%
2%
<1%
Dental insurance
91%
9%
2%
0%
Disability insurance (i.e., insurance that provides
income in the case of a serious injury or illness
for an extended period of time)
93%
3%
6%
1%
Life insurance
77%
6%
38%
<1%
Long-term care insurance (i.e., insurance that covers 80%
the cost of an extended stay in a nursing home,
assisted-living facility, or for at-home care)
4%
14%
Home insurance
3%
1%
96%
<1%
Auto insurance
3%
1%
96%
<1%
Checking account and/or ATM/debit card
4%
<1%
97%
0%
4%
The Workplace
WHERE PRODUCTS WERE OBTAINED
PERCENTAGE OF PLAN PARTICIPANTS BY AGE
Under 35 35–4445–5455–6465+*
Life Insurance
Employer
85%74%76%74%66%
Spouse’s employer
7%7%5%5%11%
On own
24%
Don’t know
<1%1%0%0%0%
34%46%46%63%
Long-Term Care Insurance
Employer
82%90%87%51%42%
Spouse’s employer
0%3%6%15%
On own
9%
Don’t know
9%0%1%3%15%
0%
9% 11%34%43%
This indicates a significant difference from all other age groups.
*Please note the base size is too small for significance testing.
For products traditionally purchased outside of the workplace, the line
between what would be obtained through the employer or privately has
begun to blur slightly.
Plan participants at companies with between 10,000 and 24,000 employees are more likely than
those at companies with 50 to 499 employees to purchase auto and home insurance from their
workplace, 5% and 7% compared to 1% and 2%, respectively.
Additionally, those at larger companies (10,000–24,999 employees and 25,000+ employees)
are more likely to receive a checking account or ATM/debit card through the workplace,
as compared to those at smaller companies (50–499).
Those who work in Public Administration are more likely to purchase home insurance from
the workplace than other employee groups.
Plan participants who work in Finance or Insurance are the most likely to source a checking
account or ATM/debit card from their workplace.
Purchasing these products from the workplace still represents a small percentage of total
purchases. But evidence does exist that employers may be widening their offerings, especially
larger companies that may be looking to build benefits to attract and keep valuable employees.
17
Employers who provide a well-rounded benefits package are likely to have
an advantage in attracting and retaining employees as the economy recovers.
When asked about their top employee benefits objectives, plan sponsors rated retaining employees
as the second most important objective, with 53% stating this is a “very important” objective;
this is second to controlling health care-related costs.
Attracting employees is another objective that falls not far behind retaining employees and
is mentioned by 41% of plan sponsors as a “very important” objective.
Many employers are focused on increasing employee satisfaction with the value of the overall
benefits package. Just over 40% rate this as a “very important” objective.
Yet, only some plan sponsors are realizing the competitive advantage they can reap with a
comprehensive benefits package. About one-third (36%) strongly agree with the following statement,
“Offering significantly better or more generous benefits than others in our industry gives our
company a significant advantage, including having positive effects on attracting and/or
retaining the employees we seek.”
Additionally, the same number (36%) highly agrees with the statement: “Our company offers
its employees a wide range of benefits.”
Those who feel their employees are “very satisfied” are more likely to agree that “offering
significantly better or more generous benefits than others in our industry gives our company
a significant advantage, including having positive effects on attracting and/or retaining the
employees we seek,” as compared to those plan sponsors who say their employees are somewhat
satisfied or neural/not satisfied (63% saying they highly agree vs. 35% and 18%).
The same holds true for “our company offers its employees a wide range of benefits”:
plan sponsors who say their employees are highly satisfied are more likely to agree with
this than those saying somewhat satisfied or neural/not satisfied (68% saying they
highly agree vs. 33% and 18%).
Plan participants overwhelmingly report that employee benefits are critical when deciding to stay
with a company or take a new job. The majority of plan participants (87%) say employee benefits
are at least somewhat important when deciding whether to take a new job or not; roughly half
(46%) say they are “extremely important.”
18
Those plan participants who see more value in their employee benefits are even more likely
to say employee benefits are essential in deciding which company to work for (94% saying
benefits are at least somewhat important in the decision, compared to 73% for those who
see little to no value in their benefits).
The Workplace
IMPORTANCE OF EMPLOYEE BENEFITS OBJECTIVES
PERCENTAGE OF PLAN SPONSORS SAYING “VERY IMPORTANT”
Very Important
Controlling health care-related costs
65%
Retaining employees
53%
Reducing the cost of benefits administration
52%
Increasing employee productivity
48%
Attracting employees
41%
Increasing employee satisfaction with the value of your overall
benefits package
41%
Helping employees make better benefits decisions 35%
Addressing the diverse benefits needs of your employee population
28%
Increasing enrollment in voluntary and/or optional plans
25%
Education and communication are essential in making benefits
a competitive advantage.
An employer can offer the best benefits in the industry, but unless their employees understand
how those benefits work and what their value is, then the benefits are most likely underappreciated
and overlooked.
For offerings such as life, disability, and long-term care insurance, research suggests that
plan participants need further education as to the benefits and value of these products.
Plan participants were asked about the importance of various financial needs and concerns
as well as the importance of specific employee benefits. Gaps in perception are seen when
comparing responses.
Nearly two in three plan participants identify having financial security if the wage earner can
no longer work due to a disability or serious illness as “highly important;” yet only two in five
rate disability insurance as “highly important.”
Similarly, 50% of employees rate having financial security in event of a premature death as
“highly important” to them, yet only 40% cite life insurance as a “highly important” benefit—
a 10-point gap.
In the 2009 study, plan participants were asked how they plan to fund their own and/or their
spouse’s long-term care expenses. Three in 10 plan participants said they didn’t have a plan or
didn’t expect to need long-term care services, demonstrating a clear need for education around
the value and benefits of long-term care insurance.
19
Additionally, the Prudential Financial Long-Term Care Cost Study, 2010 found that greater awareness
and education are needed about the role of long-term care insurance in retirement and financial planning:
Just over one-third of adults surveyed feel they know at least a moderate amount about
long-term care insurance, but only 7% say they know “a lot.”
More than 10% say they have no knowledge at all about long-term care insurance—
much higher than all other forms of insurance evaluated.
Adults under age 55, a group that is less likely to own long-term care insurance,
are more likely to agree that they should know more about it.
IMPORTANCE OF NEEDS AND CONCERNS VS. IMPORTANCE OF EMPLOYEE BENEFITS
PERCENTAGE OF PLAN PARTICIPANTS SAYING “HIGHLY IMPORTANT”
Need and Concern
Highly
Important Benefit
Having financial security if wage earner can 63%
no longer work due to a disability or serious illness
Disability
Insurance
Having financial security in event of a premature death50%
Life
Insurance
20
Highly
Important Gap
41%
22
40%
10
The Workplace
Determining the best and most effective method of communicating with
employees is essential.
When plan participants were asked which ways their company currently communicates benefits
information with them, email at the workplace was the top response (65%), followed by group meetings
during the work day (56%) and mail received at home (52%).
These three methods are also the most preferred by employees, named by 55%, 49%, and 39%
of plan participants, respectively.
Yet, for several methods, preference scores are greater than current exposure: individual, one-on-one
meetings during the work day; email received at home; webinars; a video, CD-ROM, or DVD presentation
of benefits information; and individual, one-on-one meetings during non-work hours. It’s clear that
employees would like to see more communication in these ways.
These methods seem to have two common traits: they are more personalized (individual meetings)
and/or more convenient (webinars and online presentations) for employees.
Plan participants who cite their benefits communications as “highly effective” are more likely
to say their company uses most methods of communication, as compared to those who cite
their benefits communication as “neutral/not effective.” For most methods, we see about a
20-percentage point gap between the two groups.
This shows that companies who are highly effective at communication use multiple channels
to communicate their message, which is consistent with findings from our 2010 study. In last
year’s study, we reported that benefits communication leaders are using nearly all channels
to a greater extent than other companies, which better addresses the various communication
needs and preferences within their employee population.
21
USED VS. PREFERRED METHODS OF COMMUNICATIONS
PERCENTAGE OF PLAN PARTICIPANTS
22
Company Uses Preferred Difference
Email received at the workplace
65%
55%
-10
Group meetings, seminars during the work day
56%
49%
-7
Mail received at home
52%
39%
-13
Individual, one-on-one meetings during the work day
21%
33%
+12
Mail received at the workplace
33%
23%
-10
Email received at home
11%
20%
+9
An online presentation (Internet or intranet) of benefits information
22%
19%
-3
Webinars (live, hosted, interactive online events)
12%
13%
+1
A video, CD-ROM, or DVD presentation of benefits information
7%
10%
+3
A call(s) from your company or the benefits provider
7%
7%
-
Individual, one-on-one meetings during non-work hours
4%
6%
+2
Group meetings, seminars during non-work hours
9%
5%
-4
Mobile devices (e.g., Blackberry, iPhone, etc.)
2%
2%
-
Social media networking (e.g., Facebook, Twitter, blogs)
1%
1%
-
None
NA
<1%
-
The Workplace
METHODS OF COMMUNICATIONS—BY EFFECTIVENESS OF COMMUNICATIONS
PERCENTAGE OF PLAN PARTICIPANTS
HighlyNeutral/
Effective Not Effective Difference
Email received at the workplace
74%
54%
-20
Group meetings, seminars during the work day
68%
43%
-25
Mail received at home
62%
41%
-21
Mail received at the workplace
40%
27%
-13
Individual, one-on-one meetings during the work day
34%
11%
-23
An online presentation (Internet or intranet) of benefits information
32%
13%
-19
Webinars (live, hosted, interactive online events)
18%
6%
-12
Email received at home
15%
8%
-7
A call(s) from your company or the benefits provider
11%
3%
-8
Group meetings, seminars during non-work hours
11%
8%
-3
A video, CD-ROM, or DVD presentation of benefits information
8%
6%
-2
Individual, one-on-one meetings during non-work hours
4%
3%
-1
Mobile devices (e.g., Blackberry, iPhone, etc.)
1%
2%
+1
Social media networking (e.g., Facebook, Twitter, blogs)
1%
1%
-
None
0%
0%
-
This indicates a significant difference from those who rate their benefits communication as neutral/not effective.
IMPORTANCE OF STRATEGIES TODAY VS. EXPECTED FIVE YEARS FROM NOW
PERCENTAGE OF PLAN SPONSORS SAYING “VERY IMPORTANT”
Currently 2016Difference
Increasing employee benefits education and/or financial advice
27%
37%
+10
Improving the overall effectiveness of benefits communication
33%
42%
+9
Tailoring communication and enrollment for the various employee segments
21%
28%
+7
23
24
Voluntary Benefits
2
GAUGING THE SUCCESS
OF VOLUNTARY BENEFITS
25
25
Voluntary benefit offerings have been growing over the past few years.
Voluntary benefits are optional programs that are made available at the workplace and 100% paid
for by employees. In Prudential’s Study of Employee Benefits: 2008 and Beyond, 60% of plan sponsors
reported offering at least one voluntary benefit. This year, 85% of plan sponsors say they offer one
or more voluntary benefits. Nearly half (48%) indicate that they offer four or more voluntary benefits.
Currently, plan sponsors are most likely to offer their employees the following voluntary benefits:
life insurance (63%), disability insurance (56%), and dental insurance (52%). Products such as
critical illness insurance and long-term care insurance are less prevalent on the list of voluntary
benefits offered (35% and 33%, respectively).
Plan participant results paint a similar picture. Overall, the majority of plan participants (86%)
say that their employer offers them at least one voluntary benefit. More than two-thirds say their
employer offers voluntary life and/or voluntary dental benefits. Voluntary disability and voluntary
vision are also popular offerings.
Brokers/consultants also report the same trend in products, but at a higher level of incidence.
When brokers/consultants were asked which voluntary benefits they sell and/or service, nearly all
(96%) name at least one voluntary benefit. Most brokers/consultants say they sell and/or service
voluntary life (85%), voluntary disability (84%), and voluntary dental (79%). Long-term care
insurance is at the bottom of the list, with only 59% offering this benefit.
PERCENTAGE OF PLAN SPONSORS OFFERING VOLUNTARY BENEFITS—2008 VS. 2011
85%
60%
40%
15%
Offers 1+
Voluntary Benefits
2008
26
2011
Does Not Offer
Voluntary Benefits
CURRENT VOLUNTARY BENEFITS PRODUCT OFFERINGS
PERCENTAGE OF PLAN SPONSORS, BROKERS/CONSULTANTS, AND PLAN PARTICIPANTS SAYING “YES”
Plan Sponsors
Brokers/Consultants Plan Participants
85%
96%
86%
Life insurance
63%85%68%
Disability insurance
56%84%59%
Dental insurance
52%79%70%
Vision insurance
46%NA61%
Accident insurance
43%65%34%
Critical illness insurance 35%
62%
25%
Long-term care insurance
33%
59%
38%
Voluntary Benefits
Offer/is offered at least 1+ voluntary benefit
NA = not asked.
Employers continue to offer voluntary employee benefits to increase
competitiveness as well as improve overall employee satisfaction.
Plan sponsors who offer voluntary benefits see many advantages to offering these products. When
asked to name the top three advantages of voluntary benefits, nearly three-quarters cite the ability
to provide some benefits at a lower cost than what employees could purchase outside the workplace.
In our 2008 study, plan sponsors’ primary objectives for voluntary benefits were to attract and
retain talent and maintain a competitive benefits package, rather than to shift costs to employees
and reduce expenses.
When those who offer voluntary benefits were asked for their agreement with various statements,
more plan sponsors reported agreement with the statement: “offering voluntary benefits has
had a positive impact on employees’ satisfaction with benefits” (70%), than did with the
statement “offering voluntary benefits have helped to lower overall benefits costs” (46%).
This year, there is a strong indication that employers continue to be much more employee focused
when it comes to voluntary benefits, as opposed to cost driven. Three in four plan sponsors report
that their top reason for offering voluntary benefits is to expand the benefits options available to
their employees. About two-fifths (42%) offer voluntary benefits to fulfill an employee need and
30% offer them because they were requested.
More than three-fifths of plan sponsors say they agree with the following statements: “offering
voluntary benefits has had a positive impact on employees’ satisfaction with the benefits program,”
and “offering voluntary benefits is important in maintaining the competitiveness of the employee
benefits program.” More employers expect to agree with these statements five years from now.
Additionally, those who offer voluntary benefits are more likely to think their employees are at
least “somewhat satisfied” with their employee benefits program than those who do not offer any
voluntary benefits (65% of those offering four+ voluntary benefits and 61% of those offering
one to three voluntary benefits compared to 51% of those not offering voluntary benefits).
Historically, there is very little change in the number of plan sponsors using voluntary benefits
for cost retention (14% in 2007 to 19% in 2011).
27
TOP ADVANTAGES OF OFFERING VOLUNTARY BENEFITS
PERCENTAGE OF PLAN SPONSORS WHO OFFER ONE OR MORE VOLUNTARY BENEFIT
% of Plan Sponsors
Your company is able to provide some benefits at a lower cost than
what employees could purchase outside the workplace
73%
Voluntary benefits help to maintain the competitiveness of your benefits program while adding little/no cost to your company
51%
Voluntary benefits are more convenient for your employees (to access and buy via payroll deduction)
48%
Guaranteed issue (no evidence of insurability, medical exams, etc.)
39%
Employer endorsement (your company has done the research, shopping, and made the decision for your employees)
25%
Higher quality service because of your company’s relationship/influence with the provider
25%
There are no advantages to voluntary benefits
4%
AGREEMENT WITH STATEMENTS ABOUT VOLUNTARY BENEFITS—2011 VS. 2016
PERCENTAGE OF PLAN SPONSORS OFFERING ONE OR MORE VOLUNTARY BENEFIT
65%
Offering voluntary benefits has had
a positive impact on your employees’
satisfaction with your benefits program
2011
72%
70%
62%
Offering voluntary benefits is important
in maintaining the competitiveness of
your employee benefits program
2016
EXTENT DOING COST MANAGEMENT STRATEGIES
PERCENTAGE OF PLAN SPONSORS SAYING “DOING TO A GREAT EXTENT”
Change
from
2007
20072008200920102011to 2011
Providing a wider array of voluntary benefit
offerings (where employees pay 100% of the cost)
28
14%
13%
14%
18%
19%
5%
Are plan sponsors moving toward gauging success in voluntary benefits?
In 2008, Prudential reported that only 18% of plan sponsors have goals or target participation
rates for any of their voluntary plans. That made it difficult to gauge the success of these
programs and to identify and track efforts to improve future plan performance.
Voluntary Benefits
This year, study participants who offer voluntary benefits were asked how they gauge success
in those programs. Findings show that employers utilize various methods of measuring success
beyond a straightforward participation rate. More than three-quarters say they have a way of
gauging success in voluntary benefits programs.
Employee satisfaction is the top gauge of success (47%) followed by achieving a certain set
participation rate (34%). More than one-fifth name methods such as reducing benefits costs
and/or adding more benefits options.
The number of plan sponsors using participation rates or goals is 34%; this is nearly double
2008 figures, suggesting that plan sponsors are more aware of the need to measure success
in programs.
Roughly one in four plan sponsors say they do not measure the success of voluntary benefits programs
at all. Although most employers offer voluntary benefits, seeing a return on their investment
(as measured by the success of their voluntary benefits programs) may help improve the use
of these types of benefits.
Among those that do gauge the success of their voluntary benefits programs:
Most (86%) say they have been successful in “adding more benefits options.”
More than three in four indicate success in improving employee satisfaction.
Roughly two in three report success in their target participation rates and/or reducing
their benefits costs.
METHODS OF GAUGING SUCCESS IN VOLUNTARY BENEFITS PROGRAMS
PERCENTAGE OF PLAN SPONSORS OFFERING MORE THAN ONE VOLUNTARY BENEFIT
% Using
% Saying Successful
Improving employee satisfaction with the overall
benefits program
47%
76%
Achieving a certain set participation rate or goal
34%
69%
Reducing benefits costs
29%
66%
Adding more benefits options
22%
86%
Other
1%
43%
We currently are not measuring the success of voluntary benefits programs
23%
NA
Don’t know 2%
NA
29
Plan participants are showing increasing interest in voluntary benefits.
As reported in the workplace theme, plan participants are looking toward and depending more on
the workplace for their financial well-being. It is not surprising that participants are showing more
interest in voluntary benefits, and those who have them are more likely to see their value.
Among plan participants whose employer offers voluntary benefits, roughly half say they would be
at least “somewhat interested” in their employer offering more voluntary benefits.
Those at least somewhat interested:
– T end to have higher income ($75,000).
– A re less likely to be young (ages 25–34).
– A re more likely to have dependents (51% saying at least somewhat interested vs. 44%
for those with no dependents).
– T end to say employee benefits are very important; those who rate employee benefits as
“extremely important” are more likely than those who rate employee benefits as neutral
or not important to say they are at least somewhat interested (56% vs. 35%).
Approximately one-third of employees who are employed by a company that does not offer voluntary
employee benefits are at least somewhat interested in having them offered.
LEVEL OF INTEREST IN MORE VOLUNTARY BENEFITS
PERCENTAGE OF PLAN PARTICIPANTS WHOSE EMPLOYER CURRENTLY OFFERS MORE THAN ONE VOLUNTARY BENEFIT
Neutral
21%
Very Little/
Not at All
28%
Somewhat
Interested
24%
Highly Interested
24%
Don’t Know
3%
30
Plan participants are more knowledgeable about voluntary benefits than
in the past.
Employees are becoming more aware of voluntary benefits—and more knowledgeable, too.
Compared to 2008, plan participants in this year’s study appear to be more aware of and educated
on voluntary benefits. In 2008, 27% of employees said they didn’t know enough about voluntary
benefits to select advantages, compared to 13% this year—a difference of 14 percentage points.
It should be noted that this year’s results are among those plan participants whose employer
currently offers voluntary benefits (85% of the total base), which may account for some of
the difference, but not all.
Voluntary Benefits
Nearly all options that reflect the advantages of offering voluntary employee benefits have
increased since 2008. The largest increase is seen for “voluntary benefits offered by your company
give you access to a wider range of useful benefits than you might otherwise have available”
(33% of employees reported this as a top advantage in 2008 versus 47% currently).
Convenience is perceived as the most common advantage and driving factor in purchasing
voluntary employee benefits. Roughly half of employees report that obtaining voluntary benefits
through the workplace is more convenient because you pay for them through payroll deduction.
This is a nine-point increase from 2008.
More than half of employees (52%) feel that offering voluntary benefits increases the value of
their company’s offerings to some extent. Employees have expressed interest in benefits, and there
seems to be a correlation between voluntary benefits offerings and employee satisfaction, hence
a win-win situation for all.
Employees whose company offers voluntary benefits are more likely to say their employee benefits
package is very valuable to them (51%) compared to employees who are not offered voluntary
benefits by their employers (35%).
EXTENT OFFERING VOLUNTARY BENEFITS INCREASES THE VALUE OF EMPLOYERS’ OVERALL
BENEFITS PROGRAMS
PERCENTAGE OF PLAN PARTICIPANTS
Neutral
22%
Very Little/
Not at All
23%
Somewhat
Increases
29%
Highly Increases
23%
Don’t Know
3%
31
TOP THREE ADVANTAGES OF OFFERING VOLUNTARY BENEFITS—2008 VS. 2011
PERCENTAGE OF PLAN PARTICIPANTS
2008* 2011†Change
Voluntary benefits through the workplace are more convenient because you pay for them through
payroll deduction
42%
51%
+9
Voluntary benefits often cost less than if you purchase the same benefits outside the workplace
39%
49%
+10
Voluntary benefits offered by your company give you access to a wider range of useful benefits than you
might otherwise have available
33%
47%
+14
Your employer has done the research and shopping for you, and endorses the options that you
have available
20%
28%
+8
You can enroll in voluntary benefits without going through a medical exam or providing other evidence
of insurability
28%
27%
-1
Service is often better because of the relationship and contract that your employer has with the
benefits provider
15%
19%
+4
I don’t know enough to say
27%
13%
-14
There are no advantages
6%
5%
-1
*2008 base: Percentage of all plan participants.
†2011 base: Percentage of plan participants whose employer currently offers one or more voluntary benefit.
Insurance company brand name is important to plan participants when
selecting voluntary benefits.
More than half of plan participants whose employer offers one or more voluntary benefits
consider the provider name to be at least somewhat important in deciding on whether
to enroll in voluntary benefits. One-quarter feel carrier brand name is “very important.”
Those who think brand name is more important tend to place more importance on employee
benefits; those who say employee benefits are very important are more likely to rate the
insurance company name as “somewhat important” than those who say employee benefits
are neutral/not important (59% vs. 38%).
Employers are on the same page; they realize the importance of a strong brand name to their
employees. Roughly three-fifths (59%) of plan sponsors (who offer at least one voluntary benefit)
think the insurance company name is important to their employees. Brokers/consultants are even
more sensitive to the value an insurance provider name can provide. More than three-quarters of
brokers/consultants (79%) believe that insurance company name is at least somewhat important
to employees when they are deciding whether or not to enroll in voluntary benefits.
32
Employers see a connection between awareness of provider and competitive benefits; those
who believe the insurance company name is more important are more likely than others to
“highly agree” that “offering voluntary employee benefits is important in maintaining the
competitiveness of their benefits program” (52% for highly agree vs. 36% for somewhat
agree and 29% for very little/not at all).
Voluntary Benefits
The importance of an insurance provider’s name varies by product. When it comes to the
importance of insurance company name by product, plan participants’ ratings range from
a high of 64% (saying at least “somewhat important”) for a retirement plan to a low of 44%
for accident insurance. For all other products (life, disability, dental, and long-term care),
about half think it’s important.
IMPORTANCE OF INSURANCE COMPANY NAME WHEN SELECTING VOLUNTARY BENEFITS
PLAN SPONSORS, PLAN PARTICIPANTS, AND BROKERS/CONSULTANTS SAYING AT LEAST “SOMEWHAT IMPORTANT”
79%
59%
51%
Plan
Sponsors
Plan
Participants
Brokers/
Consultants
Base for plan participants = Employer offers one or more voluntary benefits.
Base for plan sponsors = Offers at least one voluntary benefit.
IMPORTANCE OF INSURANCE COMPANY NAME WHEN SELECTING SPECIFIC
VOLUNTARY BENEFITS PRODUCTS
PLAN SPONSORS AND PLAN PARTICIPANTS SAYING AT LEAST “SOMEWHAT IMPORTANT”
Plan Sponsors
Plan Participants
Difference
Retirement plan, e.g., 401(k)
66%
64%
-2
Dental insurance
58%
52%
-6
Life insurance
62%
50%
-12
Disability insurance
56%
48%
-8
Long-term care insurance
64%
47%
-17
Accident insurance 63%
44%
-19
Base for plan participants = Employer offers one or more voluntary benefits.
Base for plan sponsors = Offers at least one voluntary benefit.
33
34
3
GRAPPLING WITH A CHANGING
BENEFITS LANDSCAPE
Benefits Landscape
35
35
Both brokers/consultants and plan sponsors see a change in the
decision-making process for employee benefits over the past five years—
with bigger companies experiencing larger changes.
When brokers/consultants were asked whether the benefits decision-making process (including
the functional areas and titles involved) has changed in the past five years, more than two-thirds
(69%) feel it has to some extent.
Mid- and large market brokers/consultants report greater change to the process versus small
market brokers.
Brokers/consultants who report their role has changed greatly in the past five years are also
more likely to report some extent of changes to the employee benefits decision-making process
(80% of those who say their role has changed greatly compared to 67% of those who say their
role has changed somewhat and 48% for those saying neutral/no change).
Plan sponsors also report changes, but to less of an extent than brokers/consultants do. Two in five
(40%) say the employee benefits decision-making process in their company has changed to some
extent over the past five years; this is significantly less than brokers/consultants.
Larger plan sponsors are more likely to report changes to the decision-making process over
the past five years versus those plan sponsors with fewer employees.
Plan sponsors operating in Information, Real Estate, Finance/Insurance, Health Care, and Arts/
Entertainment tend to report greater changes to the employee benefits decision-making process
over the past five years, as compared to their counterparts in Wholesale Trade and Retail Trade.
EXTENT BENEFITS DECISION-MAKING PROCESS HAS CHANGED IN THE PAST FIVE YEARS
PERCENTAGE OF PLAN SPONSORS VS. BROKERS/CONSULTANTS
38%
36%
33%
23%
17%
Greatly
Plan Sponsors
36
18%
Somewhat
Brokers/Consultants
16%
Neutral
13%
Very Little/
Not at All
4%
3%
Don’t Know
EXTENT BENEFITS DECISION-MAKING PROCESS HAS CHANGED IN THE PAST FIVE YEARS—BY COMPANY SIZE
PERCENTAGE OF PLAN SPONSORS SAYING “CHANGED TO SOME EXTENT”
Fewer than 500–1,000–2,500–
Overall 500
999 2,499 4,999 5,000+
Those saying to some extent 40%35%50%49%52%50%
This indicates a significant difference.
EXTENT BENEFITS DECISION-MAKING PROCESS HAS CHANGED IN THE PAST FIVE YEARS—
BY MARKET SERVED
PERCENTAGE OF BROKERS/CONSULTANTS SAYING “CHANGED TO SOME EXTENT”
Overall
Small Market Mid-Market Large Market
Those saying to some extent 69%63%74%70%
This indicates a significant difference from small market brokers (differences between large and small are marginal).
Benefits Landscape
Plan sponsors report that senior management’s influence has increased the most in the past
five years (45%). Human resources is the second most common area to gain in influence (39%).
Employee benefits, finance/treasury, employees, and board of directors all increased in influence
relatively equally (22%, 22%, 21%, and 21%, respectively).
Smaller companies are more likely to name senior management, and less likely to say
board of directors. Smaller companies also tend to say none of the areas have increased
in influence, compared to larger companies.
Mid-size companies are more likely than small and large companies to say finance/treasury
and brokers/consultants.
Larger companies are more likely to say employee benefits, HR, risk management,
and internal benefits committee.
Strategy also plays a role; companies that are more strategic are more likely than others to say
the following areas (see chart on page 38) have experienced the greatest increase in influence
in the past five years.
37
AREAS THAT HAVE INCREASED IN INFLUENCE THE MOST IN THE PAST FIVE YEARS
PERCENTAGE OF PLAN SPONSORS VS. BROKERS/CONSULTANTS
Plan Sponsors
Brokers/Consultants
Difference
Senior management
45%
50%
+5
Human resources
39%
38%
-1
Employee benefits
22%
36%
+14
Finance/treasury
22%
53%
+31
Your company’s employees
21%
23%
+2
Board of directors
21%
25%
+4
Benefits brokers/consultants
12%
NA
NA
Risk management
8%
17%
+9
Internal benefits selection committee
7%
15%
+8
Insurance company reps/agents
7%
NA
NA
Procurement
2%
9%
+7
None of these
7%
1%
-6
Don’t know
2%
3%
+1
This indicates a significant difference from plan sponsors.
Additionally, those who report more change to how benefits decisions
are made are more likely to have a greater number of areas involved
throughout the process and report that more people became influential.
Two-thirds of plan sponsors say four or more areas of their organization are influential in the
employee benefits decision-making process: 45% say four to seven areas are involved, 21% say
eight or more areas are involved, and only 34% report zero to three areas are involved to some extent.
Those who report that eight or more areas are involved in decision-making are more likely to say
that the decision-making process has changed in the past five years (58% saying “to some extent”),
as compared to those with four to seven areas (36%) and zero to three areas (34%) involved.
These findings are consistent with the trend toward a more collaborative approach in determining
employee benefits. Most plan sponsors actively engage with four or more internal or external
groups during the decision-making process. Additionally, the increase in influence is across
many groups, indicating that decisions are increasingly collaborative in nature.
38
AREAS THAT HAVE MOST INCREASED IN INFLUENCE IN THE PAST FIVE YEARS—
BY EXTENT DECISION-MAKING PROCESS HAS CHANGED
PERCENTAGE OF PLAN SPONSORS
Greatly
Somewhat
Neutral/Not at All
Senior management
46%50%43%
Employee benefits
34%24%19%
Human resources
43%48%35%
Finance/treasury
26%27%18%
Board of directors
35%25%16%
Your company’s employees
26%
Benefits brokers/consultants
13%16%11%
Insurance company reps/agents
9%
9%
6%
Internal benefits selection committee
12%
9%
5%
Risk management
16%9% 6%
Procurement
6%2%1%
None of these
2%
23%
Benefits Landscape
2%
19%
11%
This indicates a significant difference.
The process for making benefits decisions will continue to focus on
collaboration and inclusion.
Plan sponsors and brokers/consultants will continue the current trend of collaboration with internal
partners to determine the best benefits offerings for employees. With an eye on the future, levels of
influence are expected to remain consistent.
EXTENT AREAS INFLUENCE BENEFITS DECISIONS—2011 VS. 2016
PERCENTAGE OF PLAN SPONSORS SAYING “A GREAT DEAL”
2011
2016Difference
Senior management
48%
51%
+3
Human resources
41%
45%
+4
Employee benefits
34%
40%
+6
Finance/treasury
33%
38%
+5
Your company’s employees
27%
33%
+6
Board of directors
26%
29%
+3
Internal benefits selection committee
23%
26%
+3
Benefits brokers/consultants
18%
22%
+4
Risk management
17%
21%
+4
Insurance company reps/agents
14%
17%
+3
Procurement
12%
14%
+2
39
EXTENT AREAS INFLUENCE BENEFITS DECISIONS—2011 VS. 2016
PERCENTAGE OF BROKERS/CONSULTANTS SAYING “A GREAT DEAL”
2011
2016Difference
Finance/treasury
48%59%+11
Your company’s employees
30%
39%
+9
Internal benefits selection committee
29%
37%
+8
Risk management
30%
37%
+7
Employee benefits
59%
65%
+6
Procurement
20%
26%
+6
Board of directors
25%
30%
+5
Senior management
49%
54%
+5
Human resources
52%
54%
+2
This indicates a significant difference from 2011.
Companies that say employee benefits decision-making has changed
over the past five years are more likely to consider the needs of their
employees, as well as overall financial business objectives.
Plan sponsors rate factors such as attracting employees and helping employees make better benefits
decisions as more important to them. Additionally, they are more likely to say addressing the diverse
benefits needs of their employee population and desiring to increase enrollment in voluntary and/or
optional plans are more important objectives.
Plan sponsors who say decision-making has changed to a great extent over the past five years
are more likely to think their employees are satisfied with their benefits program (46% saying
very satisfied vs. 22% for some change and 23% of those neutral/no change).
40
Plan sponsors who report a great amount of change to the decision-making process are more
likely to agree that employees would make better benefits decisions if their life and disability
enrollment were separate from their medical insurance enrollment (44% saying greatly, vs. 20%
somewhat and 9% of neutral/no change).
Effectiveness of communications also demonstrates care and concern for employees and their
decisions. Plan sponsors who say decision-making has changed to a great extent over the past
five years tend to rate the effectiveness of their benefits communications higher than others
(48% saying “highly effective,” vs. 25% of somewhat and 18% of neutral/no change).
EXTENT DECISION-MAKING PROCESS HAS CHANGED IN THE PAST FIVE YEARS
PERCENTAGE OF PLAN SPONSORS
Greatly
Somewhat
Neutral/Not at All
Satisfaction of employees with overall benefits package
Those saying “highly satisfied”
46%
22%
23%
Those saying “highly agree”
44%
20%
Benefits Landscape
Level of agreement that employees would make better benefits decisions if their life and
disability enrollment was separate from their medical insurance enrollment
9%
Effectiveness of company’s benefits communications
Those saying “highly effective”
48%
25%
18%
41
With nearly half of plan sponsors consolidating to some extent, it clearly
plays a role in the overarching landscape of employee benefits.
When plan sponsors were asked to what extent they are consolidating benefits providers today,
42% say they are consolidating to some extent.
Those that are consolidating to some extent:
Tend to be larger companies.
Tend to be in the following industries: Retail, Information, Financial Services, Health Care,
and Accommodation Services.
Are more likely to say recent economic conditions have greatly impacted their benefits strategy.
Are more likely to expect health care reform to greatly impact all aspects of employee benefits.
Are more likely to say their benefits strategy is linked to their business and financial goals.
Findings indicate that employers who are consolidating are reaping rewards.
More than three-quarters of plan sponsors (76%) who receive multiple benefits from any one
provider agree that using the same provider for multiple benefits has improved the ease of
administration; 52% strongly agree.
More than two-thirds (67%) agree that using the same provider for multiple benefits has
helped to reduce benefits costs; 41% strongly agree.
Yet, prevalence of this strategy has not grown in the past five years. Two in five (41%) study
participants in 2007 said they were consolidating to some extent—equaling no growth over
the five-year period.
EXTENT COMPANY IS CONSOLIDATING BENEFITS PROVIDERS TODAY
PERCENTAGE OF PLAN SPONSORS
Neutral
19%
Somewhat
Consolidating
25%
42
Very Little/
Not at All
35%
Fully
Consolidating
17%
Don’t Know
4%
EXTENT COMPANY IS CONSOLIDATING BENEFITS PROVIDERS TODAY—BY COMPANY SIZE
PERCENTAGE OF PLAN SPONSORS
Fewer than 500–1,000–2,500–
Overall 500
999 2,499 4,999 5,000+
42%37%50%50%55%48%
Those saying “to some extent” This indicates a significant difference from all other size segments.
While some plan sponsors will continue to consolidate in the future, those
not consolidating today do not plan to do so in the future.
Results of this study suggest a polarization when it comes to consolidation of providers.
Among those who are currently consolidating greatly, the vast majority expects to be consolidating
to some extent five years from now. On the flip side, among those who are currently not
consolidating, only 14% anticipate bundling carriers five years from now.
Consolidation trends by company size remain the same: those with fewer than 500 employees
are less likely to be consolidating to some extent five years from now, compared to those at
mid- and large size companies (500+ employees).
Results by industry stay relatively the same as well as for consolidation five years from now;
the Information, Financial Services, and Health Care industries (and to a somewhat lesser
extent, Accommodation Services) say they will be consolidating more so than the Manufacturing,
Wholesale Trade, and Public Administration industries.
Benefits Landscape
EXTENT COMPANY EXPECTS TO CONSOLIDATE BENEFITS PROVIDERS FIVE YEARS FROM NOW
PERCENTAGE OF PLAN SPONSORS CONSOLIDATING CURRENTLY VS. NOT CONSOLIDATING CURRENTLY
57%
57%
32%
4%
11%
Greatly
Consolidating
Somewhat
6%
15%
Neutral
3%
Very Little/
Not at All
2%
14%
Don’t Know
Not Consolidating
EXTENT COMPANY EXPECTS TO CONSOLIDATE BENEFITS PROVIDERS FIVE YEARS FROM NOW—
BY COMPANY SIZE
PERCENTAGE OF PLAN SPONSORS
Fewer than 500–1,000–2,500–
Overall 500
999 2,499 4,999 5,000+
Those saying “to some extent” 52%47%62%59%54%64%
43
Plan sponsors are outsourcing administration more today than four years ago,
yet it is unclear what the future will hold.
Many plan sponsors (61%) say they use a third-party administrator (TPA) to outsource benefits
administration for their retirement plan; this is the most commonly outsourced benefit. Nearly
half outsource administration for medical insurance, while roughly two-fifths use TPAs for life
insurance, disability insurance, and dental insurance.
For all products asked about, mid-size and large companies are more likely to be outsourcing
currently than small companies with fewer than 500 employees.
Public companies are more likely to be outsourcing than private companies for life, dental,
and disability insurances, while no differences are seen for medical and retirement.
Those who offer four or more voluntary benefits are more likely than those who do not offer
voluntary benefits (and sometimes those who offer one to three voluntary benefits) to be
outsourcing—for all products.
In general, roughly two in five plan sponsors (37%) say they are increasing the use of third-party
administrators (outsourcing benefits administration) to some extent in order to manage costs. Among
those using this strategy, 65% indicate it has been successful in achieving desired cost savings.
Those who are consolidating to a greater extent are more likely than those consolidating somewhat
to say this strategy has been successful in achieving cost savings (71% vs. 57%).
Plan sponsors whose employee benefits strategy is closely linked to their business and financial
goals are more likely to say this strategy has been successful, as compared to those whose
strategies are not linked (70% vs. 53%).
In addition, plan sponsors who rate their communication as highly effective tend to say this
strategy has been successful, as compared to those whose communication is neutral/not
effective (73% vs. 52%).
No differences are seen by company size.
These numbers are higher than reported in 2007, indicating that there has been a substantial
increase in outsourcing benefits administration over the past four years—for all benefits. When
asked about outsourcing in 2007, results ranged from a high of 47% for retirement benefits to a
low of 29% for disability insurance.
44
When asked about their expectations for outsourcing by product five years from now, results are
flat. Plan sponsors do not anticipate doing more outsourcing in five years. However, roughly one in
five plan sponsors report that they don’t know whether they will outsource or not.
For all products asked about five years from now, mid-size and large companies again are
more likely to be outsourcing than small companies with fewer than 500 employees.
Again, those who offer four or more voluntary benefits are more likely than those who do not
offer voluntary benefits (and sometimes those who offer one to three voluntary benefits) to say
they will be outsourcing—for all products—five years from now.
Plan sponsors who report the decision-making process for employee benefits has changed
greatly in the past five years are more likely to expect to be outsourcing for all products
(except retirement), as compared to those who are neutral/report no changes.
USE OF THIRD-PARTY ADMINISTRATORS—ACTUAL 2007 VS. ACTUAL 2011
PERCENTAGE OF PLAN SPONSORS
2007
2011Difference
Retirement plan, e.g., 401(k)
47%
61%
+14
Medical insurance
36%
46%
+10
Life insurance
28%
40%
+12
Dental insurance
31%
39%
+8
Disability insurance
29%
37%
+8
Benefits Landscape
USE OF THIRD-PARTY ADMINISTRATORS—ACTUAL 2011 VS. EXPECTED 2016
PERCENTAGE OF PLAN SPONSORS
2011
2016
Difference
Don’t Know
in 2016
Retirement plan, e.g., 401(k)
61%
57%
-4
17%
Medical insurance
46%
45%
-1
18%
Life insurance
40%
38%
-2
20%
Dental insurance
39%
38%
-1
21%
Disability insurance
37%
37%
0
21%
45
46
4
PUTTING TECHNOLOGY
FRONT AND CENTER
Technology
47
47
The majority of plan sponsors report they are utilizing technology systems—
both a payroll and an HR system—to manage their employee benefits.
Only 3% of plan sponsors say they do not utilize benefits technology (having neither a payroll nor
an HR system). However, the majority of plan sponsors (72%) indicate they have both a payroll
system and an HR system.
More often than not, these systems are maintained separately. More than two in five (42%) of plan
sponsors report having both a payroll and HR system with the two systems independent of each other.
Three in 10 employers have an integrated payroll and HR system, which provides one point of access
for managing payroll and benefits information for their employees.
One-fifth of plan sponsors have a payroll system but not an HR system, while 4% have the
converse.
Plan sponsors who have a payroll system and lack an HR system also seem to be less strategic
in nature:
They are less likely to agree with the statement: “Upper management sees decisions regarding
employee benefits as being strategically important,” 38% saying “highly agree” compared to
49% of those with two independent systems and 51% for those with two integrated systems.
This is a strong indication that plan sponsors who do have an HR system are more likely to
believe employee benefits are strategically important.
These plan sponsors are also less likely to say their employee benefits strategy is closely linked
to their business strategy and financial goals today (15% vs. 25% of those with two independent
systems and 26% of those with two integrated systems).
CURRENT BENEFITS TECHNOLOGY—BY COMPANY SIZE
PERCENTAGE OF PLAN SPONSORS
Fewer than 500–1,000–2,500–
Overall 500
999 2,499 4,999 5,000+
We have both a payroll system and an HR system
and they are independent of each other
42%36%50%52%62%59%
We have a payroll system and HR system, and they
are the same system
30%29%30%34%33%32%
We have a payroll system, but not an HR system
20%
We have an HR system, but not a payroll system
4%4%6%4%1%2%
We have neither a payroll system nor an HR system
3%4%1%3%0%1%
Don’t know
1% 1% <1%<1%<1% 2%
This indicates a significant difference from all other size segments.
48
27%12%7%3%4%
Plan sponsors would like a streamlined benefits process and increased
connectivity between their benefits systems and carriers’ systems.
Nearly three-fifths (59%) of plan sponsors say it is at least somewhat important that their current
benefits systems have the capability to interface with carriers’ systems; 36% consider it to be
“very important.”
Those who work in an HR role believe an interface between their benefits systems and carriers’
systems is more important compared to all other roles.
There are sharp differences by company size: those at small companies (with less than
500 employees) are less likely to say the capability to interface with carriers’ systems is
“very important” (30%) compared to mid and large company sizes (with importance scores
ranging from 43% up to 56%).
– M
id-size and large companies tend to have more locations and employees outside of the
United States. With a wider spread operation, a strong interface between benefits systems
and a carriers’ system is fundamental to a strong, successful benefits strategy.
Plan sponsors whose employee benefits strategy is more closely linked to their business strategy
and financial goals tend to say the ability to interface with carriers’ systems is very important
(56% of closely linked say “very important” compared to 38% of somewhat linked, 22% of
neutral, and 28% of not at all linked).
More than half (51%) of plan sponsors think it’s at least somewhat important that the carriers
they work with have the flexibility to do “plug ‘n play,” meaning they can adapt and connect to
other carrier or third-party administrator (TPA) systems; 27% say it’s “very important.”
Similar to the perspective regarding interface technology between benefits systems and carriers’
systems, plan sponsors in an HR role are more likely to think plug ‘n play capability is more
important than all other roles.
The same holds true for company size. There is a significant upward trend by company size
for plan sponsors who report plug ‘n play as an important feature.
Technology
– F or companies with less than 500 employees, 22% said this was “very important,”
compared to all other company sizes.
– N early half of companies with 5,000+ employees consider plug ‘n play to be “very important.”
Again, these companies have more locations and also tend to have an international
workforce. The larger a company, the more complex its technology needs can be.
Also as seen for interfacing with carriers, those companies whose employee benefits strategy is
more closely linked to their business strategy and financial goals are more likely to say the plug
‘n play capability is more important (45% saying “very important” for closely linked compared
to 28% for somewhat, 17% for neutral, and 18% for not at all).
Those plan sponsors with a payroll system only are less likely than those with two independent
systems and those with two integrated systems to rate plug ‘n play as “very important”
(12% vs. 30% and 34%, respectively).
49
IMPORTANCE THAT CARRIERS HAVE THE FLEXIBILITY TO “PLUG ‘N PLAY”
PERCENTAGE OF PLAN SPONSORS
Neutral
14%
Somewhat
Important
23%
Not Important
23%
Very Important
36%
Don’t Know
4%
IMPORTANCE THAT BENEFITS SYSTEM(S) CAN INTERFACE WITH CARRIERS’ SYSTEMS
PERCENTAGE OF PLAN SPONSORS
Neutral
17%
Somewhat
Important
24%
Not Important
24%
Very Important
27%
Don’t Know
8%
IMPORTANCE OF CAPABILITIES—BY COMPANY SIZE
PERCENTAGE OF PLAN SPONSORS
Fewer than 500–1,000–2,500–
Overall 500
999 2,499 4,999 5,000+
50
Those saying it is “very important” that their benefits system(s) have the capability to interface
with carriers’ systems
36%30%43%49%52%56%
Those saying it is “very important” that they have the flexibility to do “plug ‘n play” to carrier or
TPA systems
27%22%34%37%37%47%
This indicates a significant difference from all other size segments.
Plan sponsors report pluses such as cost savings and improved
productivity from the use of technology.
More than half (53%) of employers indicate they are expanding the use of technology to some extent
in order to manage costs associated with employee benefits programs. This is the second highest strategy
utilized, behind making plan design changes (66%), out of cost-management strategies asked about.
Again, those with a payroll system only are less likely to be using technology to manage costs
(43% saying to some extent), compared to those with two independent systems (56%) and
those with two integrated systems (56%).
Among those who are expanding the use of technology to manage costs, the majority (69%) report
it has been as least somewhat successful in this goal; two in five say it’s been “highly successful”
as a cost-management strategy.
EXTENT DOING COST-MANAGEMENT STRATEGIES
PERCENTAGE OF PLAN SPONSORS “DOING TO SOME EXTENT”
Currently
Making plan design changes in order to control benefits costs
66%
Expanding the use of technology
53%
Sharing more of the cost of contributory benefits with employees
52%
Implementing consumer-directed health plans (i.e., a health plan that
costs less, but has higher deductibles than most other health plans.
It may also include a health savings account.)
50%
Using fewer carriers and/or consolidating carriers to reduce costs
and/or improve efficiencies
50%
Increasing the use of wellness programs to improve the health of employees47%
Providing accommodations to assist employees in returning to work
following a leave of absence, serious illness, or disability
43%
Technology
THE USE OF TECHNOLOGY AS A COST-SAVINGS STRATEGY
PERCENTAGE OF PLAN SPONSORS
Somewhat
Successful
29%
Highly Successful
40%
Neutral
19%
Not Successful
10%
Don’t Know
2%
51
Monitoring and tracking absences is one function of benefits technology. Nearly half (45%) of plan
sponsors report that benefits technology has helped to improve worker productivity to some extent;
22% feel that benefits technology has helped improve worker productivity by a great deal.
Those who say technology has improved productivity greatly:
Are more likely to be strategic:
– T hose whose employee benefits strategy is more closely linked to their business strategy
and financial goals are more likely to say worker productivity has improved (56% saying
improved to some extent for closely linked, and 51% for somewhat linked compared to 41%
for neutral and 29% for not at all).
Tend to identify increasing worker productivity as a “very important” objective (57% vs. 42%
for those who say benefits technology has not improved worker productivity).
Are more likely to be in the Information, Finance/Insurance, Professional Services, Health Care,
and Arts/Entertainment industries.
Tend to be mid-size and larger companies; 50% or more of companies with 500+ employees
say benefits technology has helped to some extent to improve worker productivity, compared
to 39% of companies with fewer than 500 employees.
Tend to have employees outside the United States (60% report improvement vs. 40% for
U.S.-based only companies).
Again, those with a payroll system only are less likely to report improvement in worker
productivity (33% saying to some extent), compared to those with two independent systems
(52%) and those with two integrated systems (44%).
EXTENT BENEFITS TECHNOLOGY HAS HELPED TO IMPROVE WORKER PRODUCTIVITY
PERCENTAGE OF PLAN SPONSORS
Neutral
19%
Very Little/
Not at All
33%
Somewhat
23%
Greatly
22%
52
Don’t Know
3%
Plan sponsor ratings of their web tool experiences leave room
for improvement.
Findings in the 2008 study reported that access to web functionality by benefits staff increased
from 2006 to 2008 for all functions asked about. Also, in 2008, at least half of plan sponsors
reported that their benefits administrators had access to 9 of 14 types of online functionality
asked about in the study, and at least 75% expect to have access to 12 of the 14 tools by 2013.
Currently, plan sponsors report moderate usage of benefits web tools ranging from a high of 66%
for handling enrollment to a low of 14% for real-time online chats/live chats.
Usage by functional role varies significantly: the HR/employee benefits function uses
benefits web tools more so than other functions.
As in 2008, mid-size and larger plan sponsors continue to make broader use of benefits web
technology when compared to small size firms.
Obviously, those with a payroll system only are more likely to say “none of these,”
compared to those with two independent systems and those with two integrated systems
(17% vs. 6% and 10%).
When asked how well the functionality of the employee benefits online activities work, plan sponsors
seem happy overall and gave most activities a “good” rating with just a few exceptions.
Employers report the following online activities could be improved: submitting claims,
integrating payroll processing, managing/tracking employee absences, and checking for
and submitting evidence of insurability.
Interestingly, those who say benefits technology has improved worker productivity greatly are
more likely to rate their experiences as “good” for managing and tracking employee absences
(e.g., paid time off, disability leave, FMLA, workers’ compensation), compared to those who
reported neutral/no improvement in worker productivity (71% vs. 61%).
Technology
Generally, plan sponsors report that small improvements to web functions would help increase
their use. More than half indicate that if the site was easier to navigate, functionality was more
useful, and/or tools/sites were less cluttered/easier to read, it would greatly help to increase
their use of online benefits tools.
53
RATING OF FUNCTIONALITY WHEN USING TECHNOLOGY IN THE LAST YEAR
PERCENTAGE OF PLAN SPONSORS
Don’t
Good
Fair
Poor Know
Pay bills
78%
18%
1%
3%
Access claims forms
78%
19%
2%
1%
Review and process monthly deferrals for 401(k) or other defined
contribution plans
77%
17%
3%
3%
Access, review, and amend billing information
76%
20%
2%
2%
Process employee eligibility information
75%
21%
1%
3%
Access updates on eligibility processing
75%
22%
1%
2%
Handle enrollment (enroll, terminate, or make changes to
employee benefits)
75%
21%
2%
2%
Manage beneficiary information
75%
20%
2%
3%
Access claims reports
73%
22%
2%
3%
Check claim status
73%
22%
3%
2%
Submit claims
68%
27%
2%
3%
Integrate payroll processing*
66%
27%
4%
3%
Check status of insurability (proof of good health)*
66%
25%
5%
4%
Manage and track employee absences (e.g., paid time off, disability leave,
FMLA, workers’ compensation)
65%
28%
3%
4%
Submit evidence of insurability (proof of good health)*
64%
25%
7%
4%
Real-time online chats/live chats*
52%
28%
7%
13%
*Base size under 500.
Plan participants report low to average use of benefits web tools,
which is consistent with employer perspectives.
No more than half of plan participants have conducted any one activity this year. However, several
of the tools are related to claims that would not necessarily happen for most in a given year.
The most commonly used online tools are: online enrollment (50%) and managing their 401(k) (47%).
Employees report differences in utilization of web tools based on company size. Plan participants
at larger companies are utilizing online tools more commonly than those at smaller companies.
Nearly one in five plan participants (17%) say they have not conducted a benefits activity online
in the past year:
54
Tend to be from smaller companies (26% of 50–499 vs. 6% for 25,000+).
Tend to have lower household income.
Tend to own zero to four insurance and savings products total.
Tend to rate employee benefits lower in importance.
Tend not to have any voluntary benefits offered to them.
Employers report the most often used benefits tools by employees are for managing medical insurance
(33%) and retirement plans (37%). While other products (life and disability insurance, dental
insurance and long-term care insurance) have lower utilization rates, some consideration may
be given to what kinds of benefits products an employer offers.
Generally, the larger a company is, the more likely an employer is to report higher utilization
of benefits web tools by product.
Plan sponsors in the Finance/Insurance industry are more likely than those in Construction,
Retail Trade, and Wholesale to report a great deal of use of online benefits tools for all products.
Employers whose decision-making for benefits has changed greatly in the past five years are
more likely to report higher usage for all products, compared to those who have seen little to
no change in the decision-making process.
Employees are generally satisfied with the quality of online tools, rating most features as “good.”
The following features received the highest ratings of “good” by employees and seem to be on
track with employee expectations:
Access paid time off information/balances (89%).
Update personal or dependent information (87%).
Online enrollment (86%).
Manage 401(k) (or other defined contribution plan) accounts, such as check account balances,
change asset allocations, and change investments (85%).
Update beneficiary designations (84%).
The functions that need the most attention are obtaining educational information about your
company’s insurance and retirement plans (27% saying fair or poor) and downloading/obtaining
forms (19% rating as fair or poor). These areas have relatively high usage, but less than good
satisfaction ratings.
Technology
Other areas with lower usage, but also lower satisfaction include using financial planning
information and tools/calculators (27%), verifying benefits eligibility (26%), checking status
of insurability (27%), and submitting claims (26%).
Plan sponsors believe the following improvements are most critical to increasing employee utilization
of benefits web tools: site is easier to navigate (53%), more useful functionality (50%), and less
cluttered/easier to read (48%). There is ample opportunity for improvements to the tools, which
employers believe would help encourage increased use and ultimately would lead to greater efficiency.
Again, differences are seen by company size. Mid-size and larger companies (500+ employees)
are more likely to feel various improvements to online tools would increase usage, as compared
to small companies (fewer than 500 employees).
Employees compare similarly to employers when it comes to utilization of benefits web tools.
There is room for both increased usage and improvement of the tools themselves.
55
EMPLOYEE BENEFITS ACTIVITIES CONDUCTED ONLINE IN THE PAST YEAR—BY COMPANY SIZE
PERCENTAGE OF PLAN PARTICIPANTS
Fewer than 500–1,000–2,500–
Overall 500
999 2,499 4,999 5,000+
Online enrollment
50%29%50%56%62%71%
Manage 401(k) (or other defined contribution plan)
accounts, such as check account balances,
change asset allocations, change investments
47%
Obtain educational information about your company’s insurance and retirement plans
39%31%41%40%41%52%
Obtain/download forms
36%32%40%38%36%39%
Access paid time off information/balances
33%26%29%31%42%48%
Update personal or dependent information
29%22%32%27%34%40%
Update beneficiary designations
28%18%23%31%31%41%
Verify benefits eligibility
24%16%19%26%35%33%
Check claims status
22%20%24%20%22%28%
Submit claims
16%12%17%15%18%22%
Use financial planning information and tools/calculators
16%9%17%18%20%24%
Check status of insurability
5%4%3%5%11%7%
Submit evidence of insurability (proof of good health)
5%3%3%4%6%8%
Real-time online chats/live chats
3%3%1%3%2%4%
None of the above
17%26%18%15%10% 6%
38%41%50%46%61%
This indicates a significant difference from all other size segments.
EXTENT EMPLOYEES USE BENEFITS TOOLS FOR EACH PRODUCT—BY COMPANY SIZE
PERCENTAGE OF PLAN SPONSORS SAYING “GREATLY”
Fewer than 500–1,000–2,500–
Overall 500
999 2,499 4,999 5,000+
56
Retirement plan, e.g., 401(k)
37%
31%41%50%50%
Medical insurance
33%
28%38%43%46%44%
Dental insurance
22%
16%27%35%33%36%
Life and disability insurance
15%
10%21%26%24%24%
Long-term care insurance (i.e., insurance that covers the cost of an extended stay in a nursing
home, assisted-living facility, or for at-home care)
12%
7% 17%24%17%18%
58%
EXTENT TECHNOLOGY WOULD HELP INCREASE EMPLOYEE UTILIZATION OF BENEFITS TOOLS
PERCENTAGE OF PLAN SPONSORS SAYING “GREATLY”
Fewer than 500–1,000–2,500–
Overall 500
999 2,499 4,999 5,000+
Site is easier to navigate
53%50%56%55%62%60%
More useful functionality
50%46%59%58%56%58%
Less cluttered/easier to read
48%45%55%53%53%58%
Live help via phone
45%41%58%46%53%49%
Better online help
42%37%51%47%52%48%
More training of benefits staff
40%36%48%42%50%51%
Live help online via chats or email
34%29%49%39%41%36%
In contrast to employers and employees, brokers/consultants generally
report higher utilization rates of benefits web tools over the past year.
Brokers/consultants are using online benefits tools more than their plan sponsor and plan
participant counterparts. Several aspects of the benefits process—including selling products—
depend on web-based applications. Additionally, with multiple clients, there are more chances
for a need to utilize technology for some aspect of benefits.
Among web tools asked about, brokers/consultants cite the most commonly used online tools as:
getting product plan information (71%), accessing client reports (70%), accessing marketing
materials (70%), and accessing claims reports (69%). For brokers/consultants, these are critical
features for any benefits technology.
Interestingly, less than two-thirds of brokers/consultants submit and receive proposals online.
Other areas where usage lags and could be improved include: access commission statements,
access benchmarking reports, access compensation reports, and lead generation.
Technology
Brokers/consultants report moderate satisfaction with their online experiences. Roughly 75% say
the online tools they’ve used function well/good. Accessing client reports and accessing marketing
materials are two of the highest rated online features (both 77%).
Similar to employees, brokers/consultants report the following features as most important to
increased utilization: site is easier to navigate (70%), more useful functionality (70%), and less
cluttered/easier to read (63%). Brokers/consultants report higher scores than other groups here;
these high scores suggest a greater need or desire for improvements in web functionality among
this group.
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RATINGS OF FUNCTIONALITY OF EMPLOYEE BENEFITS ACTIVITIES CONDUCTED ONLINE IN PAST YEAR
PERCENTAGE OF BROKERS/CONSULTANTS
Have Don’t
ConductedGood Fair Poor Know
58
Getting product plan information
71%75%24% 1% 0%
Access client reports
70%77%22% 1% 0%
Access marketing materials
70%77%22% 1% 0%
Access claims reports
69%75%21% 3% 1%
Receiving proposals
61%76%20% 3% 1%
Submitting Request for Proposal (RFP)
57%74%22% 1% 3%
Access commission statements 55%76%22% 2% 0%
Access benchmarking reports
53%55%38% 4% 3%
Access compensation reports
43%71%25% 2% 2%
Lead generation
21%40%41%14% 5%
Real-time online chats/live chats
19%59%35% 3% 3%
Other
4%NANANANA
None of these
5%----
Technology is expected to play an increasingly more important role.
Yet, without well-functioning tools and high usage, it’s unclear whether
plan sponsors will realize their goals.
Benefits technology is perceived slightly differently by employers, employees and brokers. Yet while
actual utilization of benefits web tools varies from group to group, a trend is consistent: both usage
and experience could be improved among all three groups.
Currently, technology is moderately important, but employers expect it to grow in importance
substantially over the next five years. This echoes the findings from the 2008 study.
About one-quarter (27%) of employers say expanding availability and/or utilization of benefits
Internet technology is a “very important” strategy for meeting objectives. About half (45%)
expect this to be “very important” five years from now—an increase of 18 percentage points.
As with other aspects of technology, there is a significant upward trend by company size for
plan sponsors who feel expanding availability and/or utilization of benefits Internet technology
will be “very important” in 2016:
– 4 1% saying “very important” for companies with fewer than 500 employees, compared
to 51% of companies with 5,000+ employees.
– C ompanies with 2,500 – 4,999 employees expect the highest level of importance
(68% saying “very important”).
Those who say benefits technology has improved worker productivity greatly are more likely
to think expanding availability and/or utilization of benefits Internet technology will be a
“very important” objective five years from now, compared to those who reported neutral/
no improvement in worker productivity (60% vs. 35%).
Interestingly, no differences are seen by the type of benefits technology plan sponsors
are currently using (HR system and payroll system independent of each other,
HR system only, etc.).
Technology
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60
5
THE EVOLVING ROLE OF
THE BROKER/CONSULTANT
61
Broker/Consultant
61
The uncertain economic climate paired with continued rising health care
costs and a lack of clarity about health care reform are greatly impacting
the way brokers/consultants do business.
When asked how they have been personally affected in the past six months by recent economic
conditions, roughly half of brokers/consultants (48%) report a negative impact. About one in five
say the effect has been neutral and 30% report a positive impact on their businesses.
Looking back over the last two years, there appears to be some small improvement. However, the
overarching story remains the same: more brokers/consultants have been negatively impacted by
recent economic conditions (48% report negative impact vs. 30% who reported positive impact).
Those most negatively affected:
– A re more likely to be small market brokers than mid- or large market brokers/consultants
(20% saying very “negatively impacted” compared to 13% and 9%, respectively).
– Tend to have been in the employee benefits brokerage business longer.
– Are more likely to serve the Manufacturing and Health Care industries.
Plan participants and plan sponsors have also been impacted by the economy in similar ways
to brokers/consultants. Results are consistent across the three groups:
Just over half (53%) of plan participants and plan sponsors have been somewhat or very
negatively impacted by the economy over the last six months.
Fewer plan participants (15%) and plan sponsors (22%) have been positively impacted by the
economy than brokers/consultants (30%). But the larger trend of all three groups being more
negatively affected than positively affected continues to hold nonetheless.
Brokers/consultants report that these issues—health care costs, changing regulations, and
health care reform, in addition to the economy—are greatly impacting their business. The continued
rising cost of health care is the top factor, with almost three in four (74%) of brokers citing it as a
factor that is “greatly impacting” their business.
Legislative issues are the next most common factor impacting broker business with 58% of brokers/
consultants naming changing federal and/or state regulations and 55% noting the uncertainty
around health care reform as having an impact.
IMPACT OF RECENT ECONOMIC CONDITIONS ON BROKERS/CONSULTANTS—2009 TO 2011
62
200920102011
Positively 26%
25%
30%
Neutral 19%
19%
21%
Somewhat negatively
41%
43%
34%
Very negatively
12%
13%
14%
EXTENT FACTORS ARE CURRENTLY IMPACTING BUSINESS
PERCENTAGE OF BROKERS/CONSULTANTS SAYING “GREATLY IMPACTING”
Greatly Impacting
Continued rising costs of health care
74%
Changing federal and/or state regulations
58%
Uncertainty regarding health care reform
55%
Slow economic recovery 53%
Lingering effects of the financial crisis
52%
Continued expansion of benefits web technology
34%
Consolidation of the insurance/brokerage/consulting industry 27%
Increased competition from non-traditional players
26%
Brokers/consultants are anticipating a significant impact from health
care reform on their clients and their business.
For a majority of brokers/consultants, the impact of health care legislation on employee benefits
is anticipated to be very substantial. These changes include:
How benefits are paid for:
– T wo-thirds of brokers/consultants believe employer contributions to employee benefits
will be “greatly impacted” by the legislation.
– O ver 6 in 10 expect employee benefits funding will be “greatly impacted.”
Benefits servicing:
– M
ore than half of brokers/consultants believe that the level of internal support by benefits
departments, employee benefits communications, and employee benefits service and
support in general will all be “greatly impacted.”
How and where benefits are received:
– O ver 50% of brokers/consultants think that health care reform will have a great impact
on the number of employee benefits offered and on the shift of employee benefits to
consumerism/employees with the new legislation.
In 2010, brokers/consultants were also asked about the expected impact of legislation on various
areas of employee benefits. Between 2010 and 2011, the percentage of brokers/consultants
anticipating a significant impact on employer and employee health benefits increased for every
category. In 2011, more than half believe the impact of the legislation will be great in every
category asked about.
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Broker/Consultant
Brokers/consultants who are closer to and concentrate more heavily in the employee benefits
space are more likely to anticipate large impacts from health care reform legislation than those
who have less than half of their business in employee benefits.
EXPECTED IMPACT OF HEALTH CARE REFORM LEGISLATION—2010 VS. 2011
PERCENTAGE OF BROKERS SAYING “GREATLY IMPACTING”
2010 2011Change
Employer contributions to employee benefits
58%
67%
+9
Employee benefits funding
56%
63%
+7
Employee benefits service and support
47%
58%
+11
Employee benefits communications
52%
56%
+4
The shift of employee benefits to consumerism/employees
49%
56%
+7
The number of employee benefits offered
48%
54%
+6
The level of internal support by benefits department
43%
51%
+8
There is a disconnect between the expectations of brokers/consultants
and plan sponsors with regard to health care reform.
In all areas of employee benefits asked about, brokers/consultants are more likely to say
health care reform will have a larger impact than plan sponsors are. In most cases, there is
a 20–30 percentage point difference in opinion between the two groups.
The largest differences tend to lie in the area of services, with communications, service
and support, and internal support by the benefits department all showing a 24-point or
higher difference between brokers/consultants and plan sponsors.
Plan sponsors have not changed their views much from 2010.
Additionally, plan sponsors were asked the extent to which they feel their company is on track with
the necessary changes to adapt to the health care reform legislation. Many do not feel they are on
track with the necessary changes; about two in five say they are neutral/not at all on track with
changes, while about half feel they are on track.
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Small companies with 50–99 employees (28%) and large companies with 5,000+ (24%)
are more likely than mid-size companies with 1,000–2,499 employees (14%) and those with
2,500–4,999 (9%) to say they are not on track.
Those who have been most negatively impacted by recent economic conditions are more likely
to say they are not on track (33%) compared to all others.
Those in accounting/finance and executive roles are more likely to say they are not on track
compared to those in HR (23% and 26% vs. 13%).
Those who feel that their employees are neutral or not satisfied with their employee benefits
are more likely to say they are not on track, as compared to those reporting high levels of
satisfaction (32% saying not on track compared to 10%).
EXPECTED IMPACT OF HEALTH CARE REFORM LEGISLATION—PLAN SPONSORS VS. BROKERS/CONSULTANTS
PERCENTAGE SAYING “GREATLY IMPACTING”
Plan Sponsors
Brokers/Consultants
Difference
Employee benefits communications
28%
56%
+28
Employee benefits service and support
31%
58%
+27
The level of internal support by benefits department
27%
51%
+24
The shift of employee benefits to consumerism/employees
34%
56%
+22
Employee benefits funding
42%
63%
+21
Employer contributions to employee benefits
47%
67%
+20
The number of employee benefits offered
36%
54%
+18
EXPECTED IMPACT OF HEALTH CARE REFORM LEGISLATION—2010 VS. 2011
PERCENTAGE OF PLAN SPONSORS SAYING “GREATLY IMPACTING”
2010 2011Change
Employer contributions to employee benefits
41%
47%
+6
The shift of employee benefits to consumerism/employees
31%
34%
+3
The level of internal support by benefits department
24%
27%
+3
Employee benefits funding
40%
42%
+2
Employee benefits service and support
31%
31%
0
The number of employee benefits offered
36%
36%
0
Employee benefits communications
29%
28%
-1
EXTENT COMPANY IS ON TRACK WITH ADAPTING TO HEALTH CARE LEGISLATION
PERCENTAGE OF PLAN SPONSORS
Neutral
20%
Somewhat on Track
26%
Don’t Know
4%
65
Broker/Consultant
Completely on Track
29%
Very Little/
Not at All
21%
The broker/consultant role is continuing to evolve, driven by their
clients’ increased sensitivity to cost.
In the wake of heightened cost consciousness, plan sponsors are trying to find the most costeffective employee benefits offerings and solutions. Employers have fewer people on staff to
service these benefits and to monitor changes in legislation. As such, plan sponsors are looking
to brokers/consultants more and more to assist with these challenges and fill these gaps.
Overall, 7 in 10 plan sponsors in this study reported that their overall benefits cost per employee
increased from last year.
When asked about the importance of various employee benefits objectives, plan sponsors place
“controlling health care costs” at the top of the list; nearly two-thirds (65%) say “controlling
health care costs” is a “very important” objective currently. Slightly more than half (52%) identify
“reducing the cost of benefits administration” as “very important.”
The majority of brokers/consultants (81%) feel that their role has changed to some extent in
the past five years. A sub-sector of this group believes their role has changed a great deal.
This subsector makes up almost half (46%) of all brokers/consultants.
Those whose business is more than 75% from group employee benefits are more likely than
those in the 0–49% range to say their role has changed greatly (49% saying “greatly” vs. 37%).
Those in business development only and both business development and account management
are more likely to say their role has changed significantly in the past five years (56% and
50% saying “greatly” vs. 39% for account management only and 25% for other).
There are no differences by size of clients served.
Brokers/consultants who feel the greatest impact of external factors, on themselves and their clients,
report their role changing the most. When brokers/consultants are asked about the effect of various
external factors, percentage point differences of 20–30 points are seen between those whose role
has greatly changed compared to those whose role has not changed over the past five years.
EXTENT ROLE AS A BROKER/CONSULTANT HAS CHANGED IN PAST FIVE YEARS
PERCENTAGE OF BROKERS/CONSULTANTS
Somewhat
35%
A Great Deal
46%
66
Neutral
11%
Very Little/Not at All
7%
Don’t Know
1%
EXPECTED IMPACT OF EXTERNAL FACTORS—BY EXTENT ROLE HAS CHANGED
PERCENTAGE OF BROKERS/CONSULTANTS
Greatly
Somewhat
Neutral/
Not at All
Continued rising costs of health care
82%
67%
65%
Changing federal and/or state regulations
70%
51%
46%
Uncertainty regarding health care reform
65%
50%40%
Slow economic recovery 63%
48%
Lingering effects of the financial crisis
63%
46%35%
Continued expansion of benefits web technology
43%
30%21%
Consolidation of the insurance/brokerage/
consulting industry
37%
21%
Increased competition from non-traditional players
35%
22%11%
40%
15%
Brokers/consultants are becoming more consultative and service-oriented
than ever before.
The role of the broker/consultant can involve many areas of employee benefits and encompass
various responsibilities and tasks—from suggesting new products to assisting in enrollment
to handling case implementation.
Brokers/consultants who feel their role has changed to some extent in the past five years were
asked unaided how they have seen it change. Changes seem to be driven by clients’ reactions
to economic, market, and regulatory pressures. Brokers/consultants report their role changing
in a number of ways:
The top response (unaided) is being more consultative (24%).
One in five brokers/consultants mention an idea related to challenges from legislation and
regulatory changes.
Other common mentions include: providing more hands-on services (16%), providing more
education (9%), taking on more responsibility (8%), a larger focus on cost (7%), the need to
keep up with technology changes (5%), and becoming more of a subject-matter expert (5%).
The ways roles are evolving involve deeper commitments, greater in-depth knowledge, and more
attention to the bottom line. The impetus of providing all of these services is necessitated by
strong competition and the need to stand out among the crowd. Successful brokers/consultants
will likely focus on these new role characteristics to build a competitive edge.
Broker/Consultant
67
WAYS ROLE HAS CHANGED IN THE PAST FIVE YEARS
PERCENTAGE OF BROKERS/CONSULTANTS ANSWERING UNAIDED
Percentage of Brokers
Being more consultative
24%
More challenging due to legislative and regulatory changes
20%
Clients are demanding more and brokers are providing more hands-on service
16%
Brokers are providing more education as clients are more dependent
on them for advice about health care reform changes
9%
More responsibility (often for less pay)
8%
More focused on cost
7%
Keeping up with technology changes 5%
Have become more of a subject-matter expert, have deepened
product knowledge 5%
More competition
4%
It’s harder to retain clients, keep relationships
3%
Broker/consultants’ top objectives for their business include retaining
current clients and attracting new ones.
Overall, the majority of brokers/consultants surveyed report being very focused on their clients.
More than three-quarters cite client-focused objectives such as retaining clients, providing high
quality service, attracting new clients, increasing client satisfaction, and deepening relationships
with current clients as “highly important” objectives in their business.
When asked about strategies they are currently using to achieve objectives, 71% mention being
more consultative with clients. Again, the top strategies are all client focused, including improving
overall client communications (65%) and increased sharing of information about legal and
regulatory developments with clients (63%).
Small market brokers are more likely to say increasing cross selling (65%) and increasing
efficiency of administrative capabilities (60%) are “highly important” compared to large
market brokers (57% and 47%, respectively).
Consultative selling is the top skill noted by brokers/consultants when asked about skills that
would contribute most to success this year, with 41% of brokers/consultants choosing this.
Roughly one-third name prospecting/generating leads, benefits industry trends, marketing,
legal/regulatory, and underwriting/pricing as top skills that contribute to success.
68
Small and mid-size market brokers/consultants (46% and 31%) are more likely than their
counterparts selling in the large market (21%) to say prospecting/generating leads is a
top skill.
Mid-size and large market brokers/consultants (35% and 36%) tend to say benefits industry
trends are more important, as compared to small market brokers/consultants (24%).
IMPORTANCE OF OBJECTIVES TO BUSINESS
PERCENTAGE OF BROKERS/CONSULTANTS SAYING “HIGHLY IMPORTANT”
Highly Important
Retaining current clients
86%
Providing high quality service
85%
Attracting new clients/growing number of clients
82%
Increasing client satisfaction
78%
Deepening relationships with current clients (adding additional products and services)
76%
Increasing productivity and efficiency
72%
Improving learning and development
61%
Reducing business costs
59%
EXTENT USING STRATEGIES TO ACHIEVE OBJECTIVES
PERCENTAGE OF BROKERS/CONSULTANTS SAYING “GREATLY”
Greatly
Being more consultative with clients in making recommendations about benefit program changes
71%
Improving overall client communications
65%
Increased sharing of information about legal and regulatory developments with clients
63%
Increasing cross-selling activity
59%
Improving efficiency of administrative capabilities
54%
Increasing the use of web technology
54%
Increased sharing of industry trends and research with clients 54%
Improving effectiveness of marketing activities, including more targeted marketing
53%
Broker/Consultant
69
SUMMARY OF KEY FINDINGS
Theme 1: The Growing Importance of the Workplace
This change has proved to be a win-win for both plan sponsors and plan participants.
Roughly half of all plan participants say the workplace has increased in importance as a source
for personal insurance and savings products in the past five years.
Four in five plan participants today say the workplace is currently at least “somewhat important”
as a source of personal insurance and savings products.
Plan sponsors are not yet fully realizing the extent of this growing importance and the potential
competitive advantage that their benefits offering can bring; only about one-third of plan sponsors
strongly agree that offering significantly better or more generous benefits than others in their
industry gives their company a significant advantage.
Education and communication are vital when turning benefits into a competitive advantage.
Theme 2: Gauging the Success of Voluntary Benefits
Plan sponsors continue to offer voluntary benefits mainly to increase employee satisfaction.
But now more than ever before, they are measuring success.
There is a strong indication that employers continue to be much more employee focused when it
comes to voluntary benefits, as opposed to cost driven; three in four plan sponsors report that their
top reason for offering voluntary benefits is to expand the benefits options available to their employees.
Three-quarters of plan sponsors are currently gauging the success of their voluntary benefits
programs. Among that group, most (86%) say they have been successful in adding more benefits
options. Roughly three in four indicate success in improving employee satisfaction.
Plan participants have demonstrated increased interest in the voluntary benefits they receive on the job.
More than half of plan participants whose employer offers more than one voluntary benefit consider
the carrier’s name to be at least somewhat important in deciding whether to enroll in voluntary benefits.
Theme 3: Grappling with a Changing Benefits Landscape
The decision-making process is shifting, with bigger companies experiencing larger changes.
When asked whether the benefits decision-making process (including the functional areas and titles
involved) has changed in the past five years, more than two-thirds (69%) of brokers/consultants
and two-fifths of plan sponsors feel it has changed to some extent.
Plan sponsors who say the employee decision-making process has changed over the past five years
report that various areas have increased in influence, indicating a more collaborative process than
seen previously, with many groups involved.
70
Roughly two in five plan sponsors say they are consolidating providers to some extent.
Results of this study suggest a polarization: the majority of those who are currently consolidating
expect to be doing so five years from now; while those who are not currently consolidating do not
anticipate doing so five years from now.
There has been a substantial increase in the outsourcing of benefits administration over the past
four years.
Theme 4: Putting Technology Front and Center
Plan sponsors are elevating their use of and desire for technology and greater connectivity.
Yet, basic functionality of web tools still needs attention and improvement.
The majority of plan sponsors (72%) are utilizing technology systems—both a payroll and
HR system—to manage their employee benefits. Plan sponsors who have an HR system (77%)
are more likely to incorporate benefits strategy into their business strategy and financial goals,
than those without an HR system (23%).
Nearly three-fifths of plan sponsors say it is at least somewhat important that their current benefits
systems have the capability to interface with carriers’ systems. And, more than half (51%) of plan
sponsors think it is at least somewhat important that the carriers they work with have the flexibility
to do plug ’n play, meaning they can adapt and connect to your other carrier or third-party
administrator (TPA) systems.
Some companies are reaping significant benefits and reporting successes from utilizing benefits
technology—in both cost management and worker productivity.
Yet, use of the basic web tools by plan sponsors, plan participants, and brokers/consultants leaves
room for improvement, and ratings of web functions do as well.
Theme 5: The Evolving Role of the Broker/Consultant
Brokers/consultants are fundamentally changing the way they do business and service their clients
in response to external factors such as the 2010 health care reform legislation.
Health care costs, changing regulations, and health care reform in addition to the economy are
“greatly impacting” the broker/consultant business.
Broker/consultants believe that health care reform will have a more significant impact on all
aspects of employee benefits than plan sponsors do; in most cases, there is a 20–30 percentage
point difference in opinion between the two groups.
The majority of brokers (81%) feel that their role as an employee benefits broker/consultant has
changed to some extent in the past five years. Being more consultative is the main trend.
Brokers/consultants’ top business goals include retaining current clients and attracting new ones.
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ABOUT PRUDENTIAL
Prudential Financial, Inc. (NYSE: PRU), a financial services leader with approximately $883 billion
of assets under management as of June 30, 2011, has operations in the United States, Asia, Europe,
and Latin America. Prudential’s diverse and talented employees are committed to helping individual
and institutional customers grow and protect their wealth through a variety of products and services,
including life insurance, annuities, retirement-related services, mutual funds, investment management,
and real estate services. In the United States, Prudential’s iconic Rock symbol has stood for strength,
stability, expertise and innovation for more than a century. For more information, please visit
www.news.prudential.com.*
About the Prudential Group Insurance Business Unit
Prudential Group Insurance manufactures and distributes a full range of group life, long-term and
short-term group disability, long-term care, dental, and corporate and trust-owned life insurance in
the United States to institutional clients primarily for use in connection with employee and membership
benefits plans. Group Insurance also sells accidental death and dismemberment and other ancillary
coverages and provides plan administrative services in connection with its insurance coverages.
*The information listed above and more detailed financial information can be found at www.investor.prudential.com
72
© 2011 Prudential Financial, Inc. and its related entities.
Prudential, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in
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