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    Sty oEmpoyeeBeeitsTresA Blueprint or theNew Benets Economy

    9th annual

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    The symbolic centerpiece o the museum is the inspiring

    circular atrium that soars 120 eet to the top o the dome

    creating a unique relationship between the undamental

    elements o earth and sky. In many ways the architectural

    atrium is a metaphor or how employee beneits serve to

    connect the undamental elements o a business. Beneits

    help build the loyal workorce that is both the oundation

    and the power o a successul enterprise.

    Viw Pmac Aim in SmisniansNaina Msm Amican Indian, Wasinn, DC

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    section 01

    ExectiveSmmary

    02. A Blueprint or theNew Benets Economy.

    section 02

    Cracs i teFoatio

    06. Erosion o Employee LoyaltyMay Mean etention Is at isk.

    A Workforce Ready to Take Flight

    Employers Primary Focus Is on Cost

    Less on Employee Satisfaction

    Employees See Things Differently

    section 03

    ReiorcigBeeits Strctre

    18. Flexibility, Choice andCustomization efect NewWorkorce and Economic ealities

    Leveraging the Loyalty Impact of Benefit

    Funding Flexibility and Choice

    Making Communications Count

    section 04

    Remoeig teBeeits a

    Retiremet Space

    34. Fresh Perspectives onFamiliar Solutions.

    Focus on Facilitating Employee Actions

    to Build Financial Security

    Financial Wellness

    Protecting and Preserving Income

    Income for Retirement

    section 05

    Preservig Eqityi Beeits

    56. Benets Strategy Scenarios orthe Era o Health Care Reorm.

    Employers Role Is Evolving

    A Benefits Crystal Ball

    section 06

    Metooogy 64. About the Survey.

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    ExectiveSmmary

    section 01

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    Te 9th Annual Study o Employee

    Benefts Trends delivers a clear

    message to employers: Reprioritiz

    employee loyalty and satisaction,or economic recovery may arrive

    with unanticipated setbacks or

    retention and productivity.

    This years indings reveal a workorce that has

    grown more dissatisied and disloyal, to the point

    where a startling one in three employees hopes

    to be working elsewhere in the next 12 months.

    Yet employers continue to believe employees are

    loyal, and they do not appear to be tuned in to this

    potential light risk. Focused on the challenging

    business environment, employers remain conident o

    strong levels o employee job satisaction and loyalt

    A loyal and satisied workorce is part o the

    oundation o business growth. Widening cracks

    in this oundation may orce employers to pay a

    price in reduced retention and productivity when

    the job market improves.

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    MetlIe Study o Employee Benets Trends 9th ANNuAl

    A New Perspectiveon Benets

    Beneits remain an important mechanism to

    support business goals o employee attraction,

    retention and productivity, and to orge an

    employer-employee bond by helping to inancially

    protect employees and their amilies. The impact

    o the recession has made employee beneits

    more important than ever. And, as the Study

    shows year ater year, employees who are

    satisied with their beneits are more likely to be

    satisied with their jobs.

    ProVIDINg beNeItS oN

    DIereNt terMS

    But there is no going back to the earlier,

    paternalistic beneits model one in which

    employees exchanged loyalty and productivity

    or lielong inancial security and health care.

    In the ace o new economic realities, including

    escalating health care costs and a growing

    aging population, employers must provide

    beneits on dierent terms. And this requires

    a new beneits blueprint. Balancing business

    costs and beneit needs is not about spending

    more its about spending dierently.

    Reconstructing Benetsto Reect New Realities

    The recession has impacted workers dierentlyat dierent stages o lie, with varied inancial

    implications. The Study

    highlights how this diverse

    employee experience can

    translate into disparate

    beneits attitudes and

    needs, and why employers might do well to

    consider a generational strategy or beneits,

    utilizing lexibility, customization and choice.

    VoluNtAry beNeItS AND SoCIAl

    MeDIA hAVe A key role

    Employers may be surprised at the reported

    readiness o their workers to pay or more

    personally relevant beneits, which indicates

    that voluntary beneits have a key role to play

    in enabling individual choice, customization

    and lexibility within budget constraints.

    In addition, there is compelling evidence that

    incorporating social media into beneits

    communications tools might be an increasingly

    important solution or capturing the attention

    o younger workers.

    baancin sinss css and nnds is n a spndin m is a spndin diffn.

    section 02 section 03

    MetlIe Study o Employee Benets Trends 9th ANNuAl

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    MetlIe Study o Employee Benets Trends 9th ANNuAl

    tis as Sd sws a mps and mps cni is as a cnncin wnnancia wnss and psica andmna a.

    Nw tims ri a Nw Appac bns

    Employers who seek to rebuild employee loyalty must ocus benefts strategies

    on helping to create a saety net rather than providing a security blanket or their

    employees. Findings rom the Study suggest actions employers could take to

    help their employees enjoy healthier lives and greater fnancial security. In return,

    employers may reap the rewards o improved retention and productivity.

    section 04 section 05

    Raising EmployeeResponsibility or

    Financial Securityand Retirement

    Employees also have to look at beneits dierently.

    The new beneits blueprint requires employees to

    become more engaged in eorts to improve their

    health and in building inancial security or today

    and tomorrow.

    INANCIAl ProgrAMS ADD A

    NeW DIMeNSIoN

    Wellness programs are now widely accepted asa way to help control company health care costs

    and improve productivity by reducing absenteeism.

    Taking this a step urther, this years Study shows

    that both employers and employees recognize there

    is also a connection between inancial wellness

    and physical and mental health. Programs that

    treat inancial illness appear to hold promise

    or improving productivity as well as reducing the

    incidence o stress-related health conditions.

    roM SeCurIty blANket to SAety Net

    Having a reliable income during working years and

    during retirement is something most Americans

    count on. Yet most do little to preserve or protect

    that income. Although most employees recognize

    that they must accept more responsibility or their

    inancial security, taking action is a challenge. The

    new beneits blueprint looks to employers to

    acilitate and support employee eorts with access

    to the right coverages and by providing eective

    education and guidance.

    Distracted byHealth Care Reorm

    The impact o the Patient Protection and

    Aordable Care Act (PPACA) has been

    controversial and distracting or companies o

    all sizes. The Study revealed

    a wide variety o anticipated

    responses to PPACA on

    the part o employers. But

    most notable is that, at the

    time o the survey, 32% o

    all employers, and 45% o

    small businesses with ewer than 50 employees,

    report that they still do not know what they willdo in response to legislative requirements.

    WhAt beNeItS WIll look lIke IVe

    yeArS roM NoW

    To more ully understand health care reorms

    broad, long-term implications or beneits,

    MetLie interviewed employers across the

    country to investigate how they expect their

    beneits roles and activities to change ive years

    rom now. The resulting projections reveal

    beneits scenarios that are both amiliar and

    also surprising. Many employers expect non-medical beneits and retirement oerings to

    become more important components o their

    beneits strategy in the wake o health care

    reorm. This bodes well or employees, given

    Study indings about their desire or income

    protection and retirement security.

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    Cracs i teFoatioErosion o Employee Loyalty

    May Mean etention Is at isk.

    section 02

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    A Workorce Ready to ake Flight

    In a turbulent economy when employment is

    precarious, many employees are earul about job

    security, and changing jobs is ar rom tempting.

    But as the economy recovers, there is evidence

    that employees may become more likely to seek

    other employment opportunities especially as

    many are eeling rustrated in their current jobs.

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    MetlIe Study o Employee Benets Trends 9th ANNuAl

    Seeking Another Employer

    More than one in three surveyed employees

    hopes to be working elsewhere in the next

    12 months. And this intent is true no

    matter the company size. Employers

    ulled by a period o low turnover

    may have become less ocused

    on employee job satisaction

    and retention.

    loW turNoVer MAy beCoMe A thINg o the PASt

    Since the recession began, employers have become used to a relatively low rate o voluntary

    turnover, but this may be changing. In October 2010 the Bureau o Labor Statistics reported that

    the number o employees voluntarily quitting their jobs surpassed involuntary terminations through

    layos and discharges, reversing the situation seen in October 2009.1

    fig. 2.1

    For compaies o a sies, oe i tree empoyees may become a igt ris

    Employees agree that i its their choice, they hope to be working or a diferent employer sometime in 2011

    0%

    40%

    Under 50employees

    34% 34%

    Under 500employees

    500 or moreemployees

    38%

    10,000 or moreemployees

    35%

    36%

    All employees

    1 Job Openings and Labor Turnover October 2010,Bureau of Labor Statistics, DOL. News release, December 7, 2010.

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    MetlIe Study o Employee Benets Trends 9th ANNuAl

    eMPloyee loyAlty IS Not reCeSSIoN-Proo

    For the past three years the recession has understandably absorbed employers attention. Forced

    into expense-control mode, perhaps it is not surprising that attention to employee satisaction and

    retention was not top o mind or many employers. With a shrinking economy and ewer voluntary

    resignations, it seemed that employees were grateul just to have a job.But while employers were ocused on dealing with a diicult business climate, the recession has

    taken a toll on employees. The Study has reported a decline in employee loyalty year over year

    and that loyalty has now reached a three-year low. But what is disturbing is that employers seem

    unaware o this downward trend. Employer responses show that they assume employees eel as

    loyal today as they did three years ago.

    A similar trend is apparent in that each year employees perceive less loyalty rom their employers

    than the year beore. But each year employers assume an unwavering perception o loyalty.

    The widening gap in loyalty perception is a sign that employers may be taking employee retention

    or granted. They are not paying attention to serious cracks in the loyalty oundations o their

    workorce; cracks that can expand to threaten their ability to retain the key talent theyll need most.

    fig. 2.2

    Empoyees a empoyers ave ieret views o oyaty

    51%50% 50%

    0%

    2008 2009 2010

    60%

    0%

    60%

    A very strong sense of loyalty to their employees

    Employees have a very strong sense of loyalty to the company

    57%57% 57%

    59%

    53%

    41%39%

    47%

    33%

    2008 2009 2010

    A very strong sense of loyalty to their employer

    Their company has a very strong sense of loyalty to them

    Employees who feel:

    Employers who feel:

    t Sd as

    pd a dcinin mp a

    a v a,and a a nw acda -a w.

    INSIGHT

    bt empoyers are aware o te ecie i oyaty

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    MetlIe Study o Employee Benets Trends 9th ANNuAl

    CoSt CoNtrol IS buSINeSS-CrItICAl

    Not surprisingly, employers this year report that managing beneits costs is by ar their most

    important beneits objective. When asked to rank the relative importance o their top beneits

    objectives, employee retention and productivity are considered important, but rank below the

    need to manage the bottom line or beneits costs.

    fig. 2.3

    Most empoyers rae cost cotro as teir most importat beefts objective

    Employers identied their top objectives and then ranked these in order o priority

    0%

    40%

    Controlling health andwelfare benefits costs

    33%

    Retaining employees

    22%

    Increasing employeeproductivity

    19%

    Attracting employees

    5%

    Employers Primary Focus Is on Cost Less on Employee Satisaction

    bcas ma, I dnin w ascncnd wimp saisacin.bcas can sam mpwi a s and wisHR Professional

    (1,0003,000 employeesChicago, July 2010

    TESTIMONIAL

    36% mpspd acs siin isn i

    v impansais.

    INSIGHT

    CoSt ShItINg IS here to StAy

    Employers believe that employees now expect to pay a greater share o their beneits costs. And

    36% reported that transitioning beneit costs to employees is a very important beneits strategy. This

    trend has been accelerated by cost shiting associated with health care reorm in the orm o moves

    to high-deductible plans, as well as passing on some o the medical insurance rate hikes that many

    employers incurred or 2011.

    fig. 2.4

    Cost-sitig strategies cotie to grow i importace year over year

    0%

    Employers who indicated that cost shifting is a very important strategy in their company

    40%

    32%29%

    2008 2009 2010

    36%

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    MetlIe Study o Employee Benets Trends 9th ANNuAl

    Cost shiting is a widely accepted practice. Close to two out o three companies (61%) recognize

    that shiting beneits costs to employees is now an accepted practice, and is necessary i they are

    to continue to provide the beneits employees want and need.

    fig. 2.5

    Cost sitig is more accepte i arger compaies

    Under 500 employees 500 or more employees

    Our company avoids shifting employee benefits costs whenever possible

    This is the way business is going and employees expect to pay more of their benefits cost

    Our company does not want to shift employee benefits costs to employees but we have no choice

    43%28%

    29%

    32%26%

    42%

    lookINg to eMPloyeeS to helP reDuCe CoMPANy heAlth CoStS

    Not only are employers transitioning more o the cost o beneits to employees, they are also looking

    to employees to help hold the line on escalating health care costs.

    The growing importance o wellness programs relects this dynamic. Employers are betting on

    the belie that i employees work harder at staying healthy and manage chronic diseases moreeectively, they and the company will beneit rom lower health costs and reduced absences.

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    MetlIe Study o Employee Benets Trends 9th ANNuAl

    DrIVINg eMPloyee SAtISACtIoN hAS A loWer PrIorIty

    At the same time that employers are emphasizing their ocus on cost control and cost shiting, they

    are placing less importance on increasing employee job satisaction. There is also reduced emphasis

    on beneits that help employees achieve a better work-lie balance; perhaps a questionable course

    given that many employees are dealing with increased stress at home and work.

    fig. 2.6

    Empoyers report ess ocs o empoyee satisactio a wor-ie baace

    79%83%

    52%56%

    50%

    Increasing employee job satisfaction

    Providing employees with benefits designed to better balance their work and personal lives

    100%

    2009 2010

    Employers who indicated the following benefits goals were very important to their company in the last 12 months:

    eMPloyeeS Are WorkINg hArDer IN A tough eCoNoMy

    The need in the recession to do more with less has had a positive impact on employee

    productivity. Even the smallest businesses enjoyed productivity gains over the past 12 months.

    But these productivity gains were not viewed as avorably by employees, and they could begin

    to wane i employees head out the door once the economy recovers.

    fig. 2.7

    Empoyers o a sies saw proctivity gais i te ast 12 mots

    Employers who reported productivity increased at their company in 2010

    0%

    10,000 or moreemployees

    48%

    50%

    Under 500employees

    38%

    500 or moreemployees

    43%

    5,000 or moreemployees

    45%

    All companies39%

    Under 50employees

    35%

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    MetlIe Study o Employee Benets Trends 9th ANNuAl

    eMPloyerS thINk AllS Well WIth theIr WorkorCe

    Despite these changes in the beneits and workplace environment, employers assume that job

    satisaction and beneits satisaction are on par with previous years. They do not seem to expect

    any negative employee reactions to managements tough recession tactics.

    fig. 2.8

    Empoyers aticipate virtay o ecie i empoyee satisactio year ater year

    0%

    50%

    44%44%43%

    41%40%40%

    Workplace satisfaction is high among our employees

    Our employees are satisfied with the benefits that we offer

    2008 2009 2010

    Employers who strongly believed that:

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    MetlIe Study o Employee Benets Trends 9th ANNuAl

    Employees See Tings Diferently

    job SAtISACtIoN AND loyAlty MeASureS Are oN the DeClINe

    During the economic meltdown, employees demonstrated their loyalty and went along with the

    tough measures required to keep businesses running but now they eel that they have been a

    partner in that pain or long enough. The Study shows many measures o employee engagement

    such as job satisaction are starting to decline.

    M wis cmpaad a aff

    And said,W aid ff

    man. W in i pp act avn dni , and ss

    win 16 sinsad 12.HR Professional

    (1,0003,000 employees)San Francisco, July 2010

    TESTIMONIAL

    reezeS AND urloughS hAVe let eMPloyeeS ruStrAteD

    Even though reports show the economy is improving, employees are not eeling it. As they wrestlewith the inancial impact o the recession, in the workplace and in their personal lives, there appears

    to be a satisaction disconnect. Feeling overworked and underappreciated, 40% o employees

    report that they worked harder in the last 12 months, and 25% eel less secure in their jobs than

    they did a year ago. These burnt-out employees are the most likely to say that they hope to be

    working elsewhere in 2011.

    fig. 2.9

    Empoyees wo pa to eave are more iey to report greater job isecrity a woroa icreases

    Strongly agree, hope to be workingsomewhere else in 2011

    Strongly disagree, hope to be workingsomewhere else in 2011

    Decreased job security

    Increased workload

    0%

    60%

    51%

    42%

    33%

    13%

    Strongly disagree, hope to be workingsomewhere else in 2011

    Strongly agree, hope to be workingsomewhere else in 2011

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    MetlIe Study o Employee Benets Trends 9th ANNuAl

    fig. 2.10

    Eac year, ewer empoyees report job satisactio a compay oyaty

    40%

    60%

    51%

    53%

    59%

    47%

    53%

    59%

    I am satisfied with the job that I have now

    I feel a strong sense of loyalty to my employer

    2008 2009 2010

    Employees who strongly agree with the following statements:

    Are eMPloyerS loSINg SIght o the PurPoSe o beNeItS?

    These trends are a clear warning o potential problems in the near uture. Employers have kept talented

    employees through the recession. Are they about to lose them just as things start to turn around?

    Despite budget pressures, employers would do well to keep their eyes on employee satisaction

    and engagement. Have employers tended to view beneits as table stakes and taken them or

    granted? This is not the time to lose sight o how beneits help to achieve the business goals o

    employee attraction, retention and productivity.

    fig. 2.11

    Beefts cotie to retai a attract empoyees

    The employee benefits offered to mewere an important reason why I cameto work for this company

    49%The employee benefits offered to meare an important reason why I remainwith my employer

    EMPLOYEES

    60% EMPLOYEES

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    MetlIe Study o Employee Benets Trends 9th ANNuAl

    Why beNeItS MAtter More thAN eVer

    Once again, the Study shows that how employees eel about their beneits is associated with eelings

    about their job and the company. Employees who report that they are very satisied with the beneits

    they receive through work are more than three times as likely to indicate that they are highly satisied

    with their current job compared with those who are very dissatisied with the beneits program.In addition, they are also more likely to say that they eel a strong sense o loyalty to their employer.

    fig. 2.12

    Empoyees wo are satisfe wit beefts are more iey to be oya a satisfe wit teir jobs

    0%

    80%

    Employee is very satisfied with job

    Employee is very loyal to employer

    Strongly disagreesatisfied with benefits

    Strongly agreesatisfied with benefits

    76%

    71%

    24% 25%

    Furthermore, the Study reveals that there is an association between employee beneits satisaction

    and retention. Those who indicate that they are highly satisied with their beneits are less likely to say

    that they are hoping to leave in the next 12 months and more likely to conirm that beneits are an

    important reason why they remain with their current employer.

    fig. 2.13

    Empoyees wo are satisfe wit beefts are east iey to eave a beieve beefts are aimportat reaso to stay

    0%

    70%

    Disagree, hope to be working somewhere else in 2011

    Benefits are an important reason to stay

    Strongly disagreesatisfied with benefits

    Strongly agreesatisfied with benefits

    53%

    67%

    32%

    9%

    t Sd cna mpsaisacinwi ns issn assciawi va saisacinand a.

    ts w asaisd wii nsa ss i pannin av in 2011.

    INSIGHT

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    MetlIe Study o Employee Benets Trends 9th ANNuAl

    eMPloyeeS VAlue beNeItS

    The economic events o the past 12 months have made employees place greater value on their

    workplace beneits and have sharpened their interest in making sure that they understand the

    opportunities that these beneits provide. Meaningul employee beneits are a very important tool

    in any eort to rebuild employee loyalty.

    fig. 2.14

    Base o evets o te past 12 mots, empoyees report tat tey igy vae teir beefts

    Have taken even greater interest inunderstanding the employee benefitsthey receive from their employer

    40%Place even greater value on the benefitsthey receive from their employerEMPLOYEES

    41% EMPLOYEES

    A Nw bns bpinWhen it comes to sustaining employee loyalty and satisaction, the possibility o

    reconstructing the generous beneit packages o the past is remote. But indings

    rom the Study reinorce that beneits remain a very important tool or increasing

    employee loyalty and satisaction.

    Balancing business costs and beneit needs is not about spending more its about

    spending dierently. Striking the right balance requires a new blueprint or beneits,

    one that emphasizes employees taking responsibility and employers providing more

    choice and lexibility.

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    ReiorcigBeeits

    StrctreFlexibility, Choiceand Customizationefect New Workorceand Economic ealities.

    section 03

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    Leveraging the Loyalty Impact

    o Benets

    Most successul companies depend on a strong

    oundation o loyal and productive employees.

    However, this years Study shows that it is a

    oundation at risk; 36% o employees plan to take

    light at the irst sign o an active job market.

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    structure

    MetlIe Study o Employee Benets Trends 9th ANNuAl

    loyAlty IS ASSoCIAteD WIth greAter eMPloyee SAtISACtIoN WIth beNeItS

    Beneits can be an eective tool or the task o rebuilding loyalty and job satisaction. Study indings

    reinorce the connection between satisaction with beneits and employee loyalty. In act, employees

    who are satisied with beneits are nearly three times as likely to express a strong sense o loyalty to

    their employers.

    fig.3.1

    Satisactio wit beefts is associate wit greater empoyee oyaty

    Employees who are highly satisfiedwith their benefits

    Employees who are highly dissatisfiedwith their benefits

    71%Strong senseof loyalty

    25%Strong senseof loyalty

    100% 100%

    reCogNIzINg NeW WorkorCe reAlItIeS

    Beneits dollars work harder when employees perceive their beneits program as valuable. But

    perceived value depends on beneits being relevant to an employees personal needs, and this

    requires employers to take a closer look at workorce realities. While nearly all workers were

    impacted by the recession, they were at dierent stages o lie when it hit. The resulting shits

    in personal inancial paradigms are also likely to be dierent or various age groups. The Study

    highlights how this can translate into dierent generations o workers having dierent priorities

    and views about what their beneits should include.

    Workplace generational dierences are most oten addressed in the context o behaviors and

    management styles, but the 9th Annual Study of Employee Benefits Trends shows that today

    there is also an important opportunity to approach beneits strategies rom a generational

    perspective and to do this with greater beneits choice, lexibility and customization.

    Benets Build Loyalty

    The Study conirms the power o beneits

    to engage and retain employees. In act,

    employees who are satisied with beneits

    are nearly three times as likely to

    express a strong sense o loyalty

    to their employers.

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    geNerAtIoNAl beNeItS StrAtegIeS

    Each generation tends to have certain attitudes and issues in common. Insights rom the Study into

    these dierences can help employers recognize the beneits value proposition or each generation

    and thus more eectively position beneits to address speciic retention and productivity challenges.

    gen Y(age 2129)

    Gen Y has been

    hardest hit by the job

    reeze. The challenge

    presented by this group

    is that they are more

    and more dissatisied

    with their current job

    than older workers.

    While they are

    satisied with their

    beneits, they do not

    eel as strongly as

    others that beneits are

    a reason to stay with

    the company. However,

    Gen Y employees do

    say that the beneits

    they receive at work

    are the oundation o

    their inancial security.

    The solution or Gen Y

    employees is to engage

    them in recognizing

    the value o their

    beneits. This could

    be achieved through

    more eective beneits

    communications, such

    as using media andmessaging that they

    relate to.

    The age range or

    Generation Y is 16 to 29,

    but the Study only

    interviewed employees

    21 or older.

    gen X(age 3045)

    The oldest Gen X

    employees are now

    approaching early

    middle age and are

    acing the costs o

    raising children and

    juggling two-career

    amilies. They value

    workplace beneits and

    see them as a strong

    reason to stay with

    their current employer.

    However, the challenge

    or this group is that

    they are

    and as a result, are a

    greater light risk. The

    solution is to ensure

    that Gen X employees

    have opportunities

    to obtain the right

    amount o income

    protection and savings

    that they need or

    their amilies, as well

    as access to advice andguidance on building

    inancial security.

    Helping them make

    the most o their

    beneits will increase

    the perceived value o

    those beneits.

    Younger boomers(age 4654)

    Younger Boomers

    do not appear to be

    a serious light risk,

    but the challenge

    presented by this

    group is that job

    dissatisaction could

    lead them to be

    less engaged and

    a potential

    Beneits are not the

    loyalty anchor or this

    group that they are

    or other employees

    Younger Boomers

    tend to be less

    satisied with their

    beneits. The solution

    is to re-engage

    Younger Boomers

    with the company by

    showing them how

    their beneits can help

    with their inancial

    issues. Employers could

    ocus on educating

    them on how they

    might recover lost

    ground in retirementsavings and provide

    access to voluntary

    beneits such as critical

    illness insurance

    that can help relieve

    inancial stress.

    older boomers(age 5565)

    Older Boomers are

    satisied with their jobs

    and their beneits, and

    are unlikely to leave.

    However, they ace a

    major challenge in that

    many are

    Employers recognize

    this changing work-

    orce dynamic, and

    62% expect their older

    employees to delay

    retirement and work

    longer. The solution is

    to help Older Boomers

    close savings gaps

    and plan or an

    aordable retirement

    by providing inancial

    planning tools and

    services. In addition,

    incentives to participate

    in wellness and

    disease management

    programs could help

    reduce the health

    and disability costs

    potentially associatedwith older workers.

    anis av

    n as saisdwi ins asgn y and

    od bms

    a pdcivi

    nancia

    nppad imn

    I in amps caia in av a mcics and av m cn.HR Professional

    (1199 employees)

    Chicago, July 2010

    A n-si-s-ans pacaa in pasInsad, mpsd cnsidcic, fiiiand csmiai

    na anincasin div

    wpac.

    INSIGHT

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    loyAlty DrIVerS Are DIereNt or youNger WorkerS

    Salary, health beneits and retirement beneits are important loyalty drivers or all employees.

    However, the relative ability o other beneits, such as non-medical and voluntary beneits, to drive

    loyalty varies by generation.

    For example, younger workers are much more likely to eel that company culture, advancementopportunities and work-lie balance programs are more important in creating a eeling o loyalty

    to their employers.

    This diversity points to potential opportunities to steer strategies or beneits budgets dierently

    based on the makeup o the workorce.

    A loyAlty gAP CoNtINueS

    Employers continue to have a very dierent view o what contributes most to creating a loyal

    workorce. For example, non-medical beneits, such as lie, dental and disability insurances, are

    nearly twice as important or driving loyalty than employers suspect.

    As employers scrutinize the return on their beneits investment, it is critical that they minimize

    any gaps between employee and employer perceptions about which beneits most eectively build

    loyalty and satisaction. There may be an opportunity to use less-costly beneits products

    and programs to provide greater perceived value or employees.

    fig.3.2

    Factors cosiere extremey importat to oyaty

    70% 79%Salary/wages

    Factors considered extremely

    important to loyaltyEMPLOYERS EMPLOYEES

    58% 74%Health benefits

    38% 64%Retirement benefits

    52% 44%Company culture

    46% 51%Advancement opportunities

    37% 59%All other benefits

    (dental, disability, vision, life, etc.)

    32% 43%Programs that help create

    work-life balance

    21% 36%A choice of voluntary benefits

    26% 35%Health and wellness programs

    h-V b

    Empoyees pace mc

    iger vae o o-eat a retiremet

    beeits ta may

    empoyers reaie.

    t nnain [is]asin a sins ans. ts csd n adiffn mn nspaca. Is aa fiiiand asicaanin a

    cnis iw aanc.HR Professional

    (1,0003,000 employees)San Francisco, July 2010

    TESTIMONIAL

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    SeeINg beNeItS WIth A booMer leNS

    The Study indicates that employers tend to adopt a more traditional approach regarding what drives

    loyalty in their employee population one that is more likely to relect Boomer values. This may

    not give enough weight to the preerences o younger workers or example, the reduced ocus on

    work-lie balance seen in this years results despite the act that it is highly valued by Gen X andGen Y employees.

    Nearly 50% o employers responding to the survey have over 10 years o Human Resources (HR)

    experience and may not bring Gen X and Gen Y viewpoints to the table. Lack o consideration and

    customization or generational wants and needs may result in employers not oering the right

    beneits to get more return on their beneits investments.

    DIereNt geNerAtIoNS uSe beNeItS IN DIereNt WAyS

    Where employers oer programs that help workers balance lie and work, younger workers are more

    likely than Boomers to take advantage o these programs. Employers might want to put greater priority

    on communicating these options to younger employees to help keep these employees satisied.

    fig.3.3

    Participatio i exibe arragemets varies by geeratio

    0%

    Telecommuting all or part of the workweek40%

    0%

    40%

    Flex time

    17%

    12%

    Job sharing

    19%

    Convenience services (e.g., dry cleaning,

    ATM on premises, hair-cutting/salon on

    premises, on-site convenience store, etc.)

    29%

    Gen Y

    32% 31%

    24%

    12%

    YoungerBoomers

    10%

    OlderBoomers

    29%

    Gen X Gen Y YoungerBoomers

    OlderBoomers

    Gen X

    Gen Y

    4%

    YoungerBoomers

    2%

    OlderBoomers

    Gen X

    26%

    Gen Y

    8%

    YoungerBoomers

    5%

    OlderBoomers

    25%

    Gen X

    on

    27% mpsma diffnnaina na v impansaic cs.

    I in incasdawanss wmivas diffnains is adivin ffin ad spcmand a m fiaa ns.HR Professional

    (1,0003,000 employees)

    San Francisco, July 2010

    INSIGHT

    TESTIMONIAL

    MetlIe Study o Employee Benets Trends 9th ANNuAl

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    offer dental and drug Plans

    Ensure that dental and prescription drug

    beneits are part o the beneits portolio.

    Nearly 50% o Gen X and Gen Y employees

    surveyed ranked these programs in their top

    ive most important beneits.

    coVer What matters to them

    Work with carriers to ensure that plan designrelects the needs o younger workers. For

    example, cover white illings and orthodontics

    in dental plans and appropriate medications

    in the preerred drug ormulary.

    offer choices

    Streamline plan options to keep premiums and

    service costs aordable or younger workers.

    go VoluntarY

    Map beneits to needs and explore voluntary

    plan options to close gaps.

    get fleXible

    Add telecommuting and lex time and

    encourage usage this group highly values

    lexibility in work time and place.

    get to the Point

    Simpliy, shorten and make electronic beneits

    education materials to suit younger workers

    communication preerences.

    Insight to Action

    Younger workers are a greater light risk. Boost retention by emphasizing beneits

    that this group especially values.

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    To some extent, employers can achieve greater choice and lexibility in the beneits program by

    spending dierently and reallocating resources to where they may be more eective. But i some othe cost o greater customization has to be borne by employees, will this create more dissatisaction?

    The Study indicates that it will not.

    eMPloyeeS WIllINg to PAy to PerSoNAlIze

    Flexibility and choice in beneits are a way to deliver personalized and customized beneits to drive

    loyalty while still managing the bottom line.

    Employees across the board highly value personalized beneits to the point that they are prepared

    to pay the entire cost i necessary. They also say that the availability o beneits that meet their needs

    is likely to increase their eelings o loyalty to the company.

    fig.3.4

    Coice rives oyaty, especiay or yoger worers

    Employees who said choice o benets that meet their needs is extremely important or creating loyalty

    (even i they pay 100% o the cost)

    0%

    50%

    Gen X

    40%

    YoungerBoomers

    30%

    OlderBoomers

    31%

    Gen Y

    41%

    Funding Flexibility and Choice

    Na w-id mps vavna nas a wa ain

    ns a mi psna n

    INSIGHT

    MetlIe Study o Employee Benets Trends 9th ANNuAl

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    teeINg uP VoluNtAry beNeItS

    Voluntary beneits allow employers to expand the types o beneits oered without signiicant

    increases to beneits costs. Voluntary beneits include not only legal plans, critical illness and pet

    insurance but also supplemental levels o lie and disability coverage that are employee-paid.

    Nearly two-thirds (61%) o employees report that they value these products as a way to obtainbeneits that meet their personal needs.

    Employees also appreciate that they can save time and money when they obtain coverages

    through the workplace. They also expect they would have to pay higher costs i they purchased

    similar coverages elsewhere.

    fig.3.5

    Empoyees o a ages see coice, cost a coveiece avatages i votary beefts

    0%

    70%

    More likely to choose benefits that meet their personal needs

    Comparable products outside of the workplace would cost more

    Buying through the workplace is convenient and saves time

    Employees said they value voluntary benefits because:

    Older

    Boomers

    61%

    66%68%

    Younger

    Boomers

    59%

    62%64%

    Gen X

    64%66% 67%

    Gen Y

    57%

    64% 65%

    eMPloyeeS Are oN boArD WIth VoluNtAry beNeItS but Where Are eMPloyerS?

    Despite the opportunity to use voluntary beneits as a way to increase the perceived value o

    the company program, many employers are not making the most o what voluntary beneits

    can do or them.

    Nearly hal (43%) o employers surveyed underestimated the level o employee interest andappreciation or these products, and did not recognize their potential or reinorcing employee loyalty.

    I iv avna na a acmpan cas can mmps nnds wi cmpan pain cs.HR Professional(1199 employees)

    Chicago, July 2010

    TESTIMONIAL

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    fig.3.6

    Empoyers are ot reaig te sigas correcty we it comes to empoyee iterest ivotary beefts

    Our employees are not interestedin a wider range of voluntarybenefits products

    43%I am interested in a wider array ofvoluntary benefits that I can chooseand pay for on my ownEMPLOYEES

    52%EMPLOYERS

    fig.3.7

    Empoyees ee ie, isabiity a eta israce trog te worpace are importat eve i

    tey ave to pay 100% o te cost

    Interested in life insurance Interested in disability insurance Interested in dental insurance

    0%

    60%

    54%

    58% 59%

    on

    17% mpsindica a

    vnans a a vsinican pa cmpansns sa

    on

    14%sa a vi incas nm

    vna nd in nw as.

    INSIGHT

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    structure

    take a close look

    Analyze current beneits or gaps and identiy

    opportunities to enrich the program based

    on the preerences and proiles o the current

    (and uture) workorce.

    get an outside VieW

    Seek recommendations rom brokers and

    carriers or eective voluntary plan solutions

    to ill any gaps and add perceived value to theprogram without adding direct cost. Forty-

    two percent o employers reported that their

    broker has recommended voluntary beneits as

    a cost-eective way to enhance their beneits

    program. It is a worthwhile conversation to have.

    eXtend income Protection

    Turn to employee-paid options or supplemental

    lie and disability coverage when the current

    plan does not provide employees with adequate

    income protection coverage levels. Employeescan choose to pay or the option no need to

    add to the employers beneits costs.

    focus on sPecific needs

    Explore specialty voluntary beneits that

    address speciic employee concerns. For

    example, 57% o employees are very worried

    about meeting extra costs not covered by

    medical insurance in the event o a major

    illness. Critical illness insurance is a voluntary

    beneit that can help address this concern.

    shift costs, dont droP

    Dont drop beneits because o cost constraints;

    consider a voluntary replacement instead. Sixty-

    one percent o employees are clear that they

    would rather pay or beneits than lose them.

    Insight to Action

    How to venture into voluntary beneits.

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    More than hal (56%) o employers surveyed made no modiications to their beneits materials

    last year, and a third (33%) o them indicated that changing employee communications is simplynot a priority right now. While recognizing the very real inancial challenges that many companies

    ace in this economy, deciding to save money in the area o beneits communications could be

    shortsighted. Employees who say that their company has eective beneits communications, or

    who recognize that their employer has improved communications, are more than twice as likely

    to say they are loyal to their employer. They are also more likely to be more satisied with their

    beneits and with their jobs.

    Eective communication can make the dierence between beneits that are understood and valued,

    and beneits that are overlooked and underutilized.

    fig.3.8

    Improvig beefts commicatios as a oyaty payo

    57%

    0%

    Strongly agree that... Strongly disagree that...

    80%

    65%

    78%

    Strongly agree that... Strongly disagree that...

    16%

    My employer is loyal to me

    I am very loyal to my employer

    ...my company benefits communications

    are effective

    ...my employer improved our benefits

    communications this year

    70%

    15%

    25%

    30%

    oNe CoMMuNICAtIoNS PACkAge or All So yeSterDAy

    One communications platorm/package approach no longer makes sense or todays diverseworkorce. An eective beneits communications strategy requires messaging that resonates with

    dierent lie stages and generational attitudes in the workplace and highlights beneits that will

    engage them. Yet, in the last 12 months, only 10% o employers have brought a generational point

    o view to their communications materials, and only 13% have added a survey to help identiy their

    employee beneits needs and attitudes.

    StePS IN the rIght DIreCtIoN

    The good news is that nearly hal o employers (44%) did make some changes to their beneits

    communications in the past 12 months. And their employees noticed: 43% o employees reported

    that their company had improved beneits communications in the last year.

    Making Communications Count

    An mp camp m ffic ansaid, I nd asss. W dnw av visincva? And Isaid, W d. ynw, is is anmp as

    wi s v asHR Professional

    (4,000+ employees)

    San Francisco, July 2010

    TESTIMONIAL

    MetlIe Study o Employee Benets Trends 9th ANNuAl

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    StIll oPPortuNIty or IMProVeMeNt

    Despite this welcome progress, there is still opportunity to do more. Employers should strive to

    keep up with todays ast-changing communications trends and technology to keep beneits

    communication relevant. Fity-ive percent o employees reported that they did not ind their

    beneits materials clear or comprehensive. Only 23% o employees are satisied with their beneitscommunications and these satisied employees tend to be older employees, not the younger

    workers who need to engage more on the subject o beneits.

    eMPloyerS get 30 MINuteS to tell theIr beNeItS Story

    Showing employees the value o their beneits and options requires getting their attention. The

    Study again conirms that employees (regardless o age) spend on average 30 minutes on beneits

    enrollment. And in this world o short attention spans, this is unlikely to change. Employers are

    going to have to make every minute count.

    Employers who changed their communications strategies ocused mainly on communicating

    more oten (25%) and expanding into new media (19%). Making assumptions rom an HR point

    o view may not always give the right answers, but only 13% added employee surveys to helpguide their thinking.

    fig.3.9

    Cages tat empoyers mae to beefts commicatios i te ast 12 mots

    0%

    30%

    Increased thefrequency of

    communications

    25%

    Tailored materialsfor differentgenerations

    10%

    Changeddesign and/or

    messaging

    12%

    Added employeesurveys

    13%

    Added types ofmedia (paper, web,

    video, podcast,social media, etc.)

    19%

    Where should employers make beneits communication improvements or maximum eect? This

    year the Study asked employees what would make their beneits communications more meaningul

    or them and they said they would like to see more requent communications (34%) and

    inormation tailored to lie events (39%).

    But even more, employees said that receiving beneits inormation on the internet (44%) would be

    more meaningul. Younger workers eel most strongly about this, yet 36% o Older Boomers also are

    interested in online communications. Not surprising, since 74% o Americans now are actively using

    the internet.2 So employers appear to be on the right track although they could add more ocus to

    dierentiating beneits messaging by lie stage and generation.

    2 Internet, Broadband and Cellphone Statistics, Pew Research Centers Internet & American Life Project, Jan. 2010.

    55% mpspd a did n ndi nsmaias ca cmpnsiv.

    INSIGHT

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    PreereNCe or A lIVe PerSoN

    Automation and outsourcing have reduced the visibility o HR in most organizations especially

    large ones. Yet over one-third (36%) o all employees surveyed would preer to have access to a live

    person to explain their beneits. This speaks to the need or a multichannel approach to providing

    beneits inormation, since this preerence exists across the generational spectrum.

    SoCIAl MeDIA the NeW keyStoNe IN the CoMMuNICAtIoNS brIDge

    Many people assume that social media is another name or social networking sites, such as Twitter,

    Facebook and LinkedIn, but the deinition is much broader. Social media is about on-demand

    inormation, access and engaging people in two-way dialogue. It includes videos, blogs, mobile

    content and podcasts. It is not a ad; it is undamentally changing the way people communicate

    about all subjects not just beneits. A smart social media communications strategy is as much

    about connectivity and leveraging mobile technologies as it is about any one particular medium.

    As part o an integrated communications campaign, social media can make beneits more relevant

    and improve results. It also lets employers gather real-time eedback rom employees.

    gettINg INterCoNNeCteD

    Seventy percent o employers say they do not use social media, and the Study uncovers some o the

    perceived barriers to including it in the communications mix. Some employers (25%) believe there

    is a lack o interest on the part o their employees, while others cite legal concerns (23%) or lack o

    resources (37%). Others say it is just not valuable or their company (33%).

    fig.3.10

    Compaies are esitat to aopt socia meia

    0% 40%

    Do not think it is valuable 33%

    Do not think employeeswould use it

    25%

    Have legal concerns 23%

    Have technical

    support challenges

    15%

    Do not know how tocurrently implement it

    12%

    Other reason 12%

    Do not have the resources 37%

    structure

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    However, despite these reservations, the Study also shows that many companies recognize the

    advantages o using social media. These companies see new media as a way o engaging employees,

    and 74% acknowledge that it provides an easy, convenient way or employees to obtain beneits

    inormation. Yet only 8% o those who do not currently use some orm o social media plan to put a

    toe in the water in the next year.

    PAy AtteNtIoN to youNger WorkerS CoMMuNICAtIoNS PreereNCeS

    Gen Y workers are the most interested in receiving beneits inormation through social networking,

    mobile devices and text messaging, while older workers are less interested. But older workers

    preerences alone should not drive the communications strategy.

    Employers might consider exploring some aspects o social media to build a beneits bridge to

    younger employees, especially since they are more likely to be a light risk and to rate company

    beneits communications as less eective.

    fig.3.11

    Yoger empoyees are most itereste i receivig beefts iormatio trog socia etworig,

    mobie evices a text messagig

    Gen YEmployee interestin social media Gen X

    Mobile device to access

    he internet (e.g., cell phone,

    BlackBerry, iPhone)

    Text messaging

    Social networking sites

    (e.g., LinkedIn, Twitter,

    Facebook, etc.)

    YoungerBoomers

    OlderBoomers

    Internet site

    42%

    42%

    40%

    75%

    39%

    38%

    37%

    80%

    12%

    12%

    12%

    66%

    10%

    11%

    10%

    61%

    74% cmpanisacnwda scia mdiapvids an as,cnvnin wa mps ain ns

    inmain.

    INSIGHT

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    tn in emp Diffncs Sap

    an effciv bns Pam

    Not all employees are the same. Their stages in lie, personal needs and individual

    preerences all impact how they perceive the value o their beneits. As employers

    strive to make their beneits dollars work harder, they will need to pay close

    attention to ensuring their beneits programs are responsive, lexible and aordable.

    simPlifY

    First, review current beneits materials to

    ensure that they are simple, well organized

    and concise. Jettison jargon wherever you can.

    set goals

    Dont jump into social media without a clear

    goal, or else money and eort may be wasted.

    The goal might be to boost participation in

    a wellness initiative, shine a spotlight on anunderutilized voluntary beneit or add new lie

    to a repeat campaign. Decide i social media

    tools can help to accomplish the companys

    chosen objectives.

    understand Your audiences

    Identiy the audiences or this goal and their

    communication preerences. Veriy that social

    media will help them receive the inormation

    easier and aster.

    set a budget

    Decide on an appropriate level o inancial

    investment. Building a communications

    website on the internet (beyond the irewall)

    will provide a sound, long-term platorm. But

    a quick podcast or video also may do the job

    eectively as part o a campaign.

    start small

    A blog or Twitter eed may be the easiestway to start. Keep them simple but resh

    and interesting, with regular updates and

    hints and tips rom the HR stas collective

    knowledge and experience.

    listen and adaPt

    Let employees guide the process by soliciting

    eedback about what they like. Be sure to

    monitor and respond switly to comments so

    employees know they are being heard.

    Insight to Action

    Here are some pointers or setting social media in motion.

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    section 04

    Remoeig teBeefts a

    Retiremet SpaceFresh Perspectives onFamiliar Solutions.

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    Focus on FacilitatingEmployee Actions to BuildFinancial Security

    Economic realities have made the beneits cost

    equation balancing beneits costs with beneit

    needs more challenging than ever, especially as it

    pertains to employee health and inancial security.

    The new beneits blueprint approaches this

    challenge not with radical new architecture, but

    by remodeling the existing beneits space

    or a changed perspective. This means thinking

    dierently. Instead o responsibility or cost being

    primarily the companys concern, it is now shared

    by employees. And employee inancial security is

    approached rom a perspective o income needs

    and income protection.

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    retirem

    ent

    sPace

    Wellness Delivers Returns

    Wellness programs are delivering proven

    returns on investment or employers,

    with nearly three-quarters o them citing

    these programs as being eective in

    reducing the companys overall

    medical costs.

    Financial WellnessAdding a New Dimension to Health and Wellness Strategies

    WellNeSS ProgrAMS eeCtIVeNeSS IS NoW Well eStAblISheD

    Wellness programs are one o the places where employees are engaged in the beneits cost

    equation. The survey shows that encouraging employees to adopt healthier behaviors is increasing

    in popularity as a means to control health costs and drive productivity.

    Employers who oer wellness programs believe that they work; 72% say that they are eective

    at reducing medical costs, and over hal o employers surveyed believe that health and wellness

    programs are eective or improving productivity through reduced absence a number that rises

    to 76% or companies who provide wellness programs.

    fig. 4.1

    Empoyers tat oer weess programs are especiay iey to report tat tey are eective at

    recig meica costs

    Say they are effective at reducingmedical costs

    EMPLOYERS THAT OFFER WELLNESS PROGRAMS ALL EMPLOYERS

    72%Say they are effective at reducingmedical costs

    59%

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    rooM or WellNeSS exPANSIoN

    Since employee liestyle choices account or the majority o health care costs, a successul wellness

    strategy requires investment in programs that create and sustain healthy employee behaviors. Across

    all companies, there has been a steady increase in wellness programs, as well as growth in associated

    wellness initiatives such as medical and dental disease management programs. But more employerscould beneit rom a solution that is proven to help manage their greatest beneits expense

    medical costs.

    fig. 4.3

    Weess programs ave steaiy icrease over te ast tree years

    50%

    0%

    2008 2009 2

    Wellness program

    Medical disease management

    Dental disease management

    010

    Employers who said their company offered:

    33%

    15%

    8%

    45%

    26%

    14%12%

    37%

    20%

    fig. 4.2

    Empoyers tat oer weess programs are especiay iey to report tey ep mae worersmore proctive

    Say they are effective atimproving productivity

    76%Say they are effective atimproving productivity

    58%

    EMPLOYERS THAT OFFER WELLNESS PROGRAMS ALL EMPLOYERS

    W a discn n ns wn wimpmnd

    wnss pamS nw vdin cmpans a an ff[m] i w .HR Professional

    (1,0003,000 employees)

    San Francisco, July 2010

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    fig. 4.4

    Growt i weess programs as bee sigifcat i compaies wit 500 or more empoyees

    57%

    500 or more employees

    Under 500 employees

    80%

    19%

    72%

    29%

    2008 2009 2010

    0%

    22%

    61%

    ADDINg A INANCIAl ASPeCt to WellNeSS

    Stress is associated with exacerbating and driving health problems, and inancial stress is a prime

    cause o personal stress.3 The recession has resulted in widespread inancial insecurity across all

    employee age groups. In act, there is a virtual epidemic o inancial illness.

    As much as employers have been ocused on traditional health and wellness, there is compelling

    evidence that inancial illness also contributes to health care costs, as well as to reduced

    productivity. Employee inancial security may be a major driver in accomplishing business goals.

    fig. 4.5

    A geeratios o te wororce ser rom facia i-eat

    Gen Y Gen X

    ob security

    Have trouble paying bills

    All employeesEmployees who report thathey are very concerned about:

    Employees who strongly agree they:

    YoungerBoomers

    OlderBoomers

    Live paycheck to paycheck

    52%

    33%

    43%

    49%

    32%

    41%

    50%

    30%

    40%

    51%

    31%

    43%

    52%

    23%

    35%

    Having enough money

    o make ends meet 49% 52%53% 58% 52%

    3 Health and Personal Finances, The Personal Finance Employee Education Foundation, (http://www.personalfinancefoundation.org/research/hpf.html).

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    INANCIAl IllNeSS IS lINkeD to PhySICAl IllNeSS

    There is an association between health risk and the kind o stress experienced with inancial

    struggles. The Study shows that employees who say they are not in control o their inances, or who

    live paycheck to paycheck, are more likely to report worse health than those not similarly stressed.

    Employers recognize this dynamic. Over two-thirds (69%) say that inancial stress contributes tohealth costs at their company.

    fig. 4.6

    Poorer eat is associate wit stress facia sitatios

    Employees who report they are verymuch in control of finances

    Employees who strongly disagree thatthey live paycheck to paycheck

    Employees with excellent/very good health

    Employees with fair/poor health

    0%

    70%

    68%

    7%

    65%

    7%

    fig. 4.7

    Stress rom ebt is associate wit a rage o eat probems tat impact costs a proctivity 4

    Headache Severe anxiety

    51%

    Muscle tension Ulcers ordigestive tract

    problems

    Severedepression

    Heart attacks

    0%

    60%

    High debt stress

    Low debt stress

    31%

    44%

    15%

    29%

    4%

    27%

    8%

    23%

    4%6%

    3%

    4 AP-AOL Health Poll Debt Stress: The Toll Owing Money Takes on the Body, 2008.

    I in sss isa div inss psicamina andis a mid. W avs ppavin nanciass i nDisaiiis a Dpssin is p.HR Professional

    (1,0003,000 employees)Chicago, July 2010

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    INANCIAl StreSS AlSo StIleS ProDuCtIVIty

    Employers agree that inancial stress, in addition to impacting employee health, also aects

    productivity. Fity-eight percent say that inancial illness contributes to employee absences at their

    companies, and an amazing 78% also agree that worry about personal inancial problems while at

    work can distract employees to the point that they are less productive.In act, according to the Study, 27% o employees admit they took o unplanned time and/or were

    distracted at work dealing with personal inancial issues. This was especially true or younger workers.

    fig. 4.8

    Abseteeism a preseteeism e to facia stress ca tae a to o proctivity

    Say employees are less productive

    while at work at our company whenthey are worried about personalfinancial problems

    78%Say that financial stress contributes to

    employee absences at our company

    58%

    EMPLOYERS EMPLOYERS

    INANCIAl eDuCAtIoN AND guIDANCe CAN ProMote INANCIAl WellNeSS

    Changing inancial behaviors can create a sense o inancial control and help reduce stress. But

    many employees lack a source o sound inancial advice and guidance; nearly one in two employees

    reports that they do not currently consult with anyone regarding personal inancial matters, and one

    in ive seeks advice rom a riend or relative who is not a inancial proessional.

    More than hal o employees surveyed said that they would be interested in their employers helping

    to ill this gap by providing inormation on how to address issues that can create inancial stress.

    fig. 4.9

    Empoyees wo ave bee abset rom wor e to facia cocers are especiay itereste i

    avice a giace rom teir empoyers

    I s i v daWv ad s

    man mpsws msav n incs, isps was aidff, sic.W sin a asnismsndins isss

    HR Professional(4,000+ employees)

    San Francisco, July 2010

    TESTIMONIAL

    Are interested in financial adviceand guidance

    ALL EMPLOYEES

    EMPLOYEES WHO HAVE TAKEN TIME OFF

    FROM WORK OR SPENT MORE TIME THINKING

    ABOUT PERSONAL FINANCIAL ISSUES

    52%Are interested in financial adviceand guidance

    81%

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    78% mps a as p a insin civin asamn asws w mcincm iimn savinwd na.

    fig. 4.10

    Yoger a oer worers ave ieret preereces or ow tey wo ie teir empoyerto provie facia ecatio i te worpace

    % of employees who expressed interest:

    0%

    90%

    Online tools (e.g., written materials, learningmodules, calculators, or scenario planning)

    69%66%

    75%79%

    Gen Y YoungerBoomers

    OlderBoomers

    Gen X

    0%

    Financial planning/retirement webinarsvia the internet

    90%

    Financial planning/retirementin-person seminars

    55%53%

    62% 63%

    65%

    54%50%

    Gen Y

    63%

    YoungerBoomers

    OlderBoomers

    Gen X

    Gen Y YoungerBoomers

    OlderBoomers

    Gen X

    Advice and guidance from an expertvia telephone

    50%

    37%34%

    Gen Y

    46%

    YoungerBoomers

    OlderBoomers

    Gen X

    INSIGHT

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    INCoMe ProteCtIoN CAN helP SuStAIN INANCIAl SeCurIty

    In addition to providing inancial advice and guidance programs, employers can help their

    employees gain a measure o inancial security by providing access to adequate amounts o lie

    insurance and disability income insurance. People who eel in control o their inances are more

    likely to take planning steps to protect their amilies against the eects o premature death

    or being unable to work due to injury or illness. This can contribute to peace o mind and less

    distraction at work.

    fig. 4.11

    Empoyees wo ow ie a isabiity coverage worry ess abot facia isses

    0%

    50%

    Employees who own

    Employees who do not own

    Disability insurance

    Employees with disability and/or life insurance who say they strongly agree that because of workplace benefits,

    they worry less about financial issues

    Life insurance

    46%

    26%

    43%

    25%

    INANCIAl WellNeSS beNeItS WorkerS AND eMPloyerS

    Helping employees reduce and manage their inancial stress has a positive impact that is recognized

    by both workers and employers. It is an important and eective way to help achieve the goals o

    wellness programs reduced health costs and improved productivity.

    fig. 4.12

    Empoyees wo ee strogy tat teir beefts rece worry are more iey to report better eat

    Report fair/poor health

    7%Report excellent/very good healthOF EMPLOYEES WHO WORRY LESS BECAUSE

    OF BENEFITS AT WORK

    OF EMPLOYEES WHO WORRY LESS BECAUSE

    OF BENEFITS AT WORK

    67%

    I dn in isa scI ins dnia cnncin [wn iinsanc nand disaiins andnancia wnssHR Professional

    (4,000+ employees)

    San Francisco, July 2010

    TESTIMONIAL

    74% mps wff wnsspams cnca wnssiniiaivs wd m ffcivi incddpams andsvics p

    mpsmana inancia sss.

    INSIGHT

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    WellNeSS ProgrAMS CAN reINorCe reteNtIoN

    Wellness programs not only help companies reduce costs and improve productivity, they can also

    help drive loyalty. Employees who participate in wellness programs are more likely to report loyalty

    to their employer and perceive that their employer is more loyal to them. In addition, they are more

    likely to say that beneits are a reason they remain with their employer.

    fig. 4.13

    Empoyees wo ave access to, a participate i, weess programs are more iey to be oyato teir empoyer

    Believe their companyis very loyal to them

    Feel very loyal totheir company

    Say benefits are an importantreason they stay at their company

    0%

    80%

    Participate in company wellness programs

    Do not participate

    73%

    27%

    62%

    38%

    62%

    38%

    Employees who:

    I pp aavin nanciadifficis, andan mp canp, a ads id pa mndsamn aand as snds amssa w cmpana is aca a amiand n s mp andIm mpHR Professional

    (4,000+ employees)San Francisco, July 2010

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    gauge the need

    To maximize the eectiveness o advice and

    guidance programs in the workplace, irst

    determine the kind o support employees

    require a preerence or retirement

    planning, basic inancial literacy, income

    protection advice or maybe debt counseling.

    consider Worker ages

    Consider generational preerences whendeciding the best ormat or providing the

    inormation. Younger workers may preer

    the convenience and sel-serviceaspects

    o online webinars and podcasts on their

    own time.

    taP into outside resources

    Work with providers to develop and promote

    on-site seminars or inancial education and

    planning. Usually theres no cost to employers

    or employees or these services. Also, dontassume that only older workers are interested

    in retirement planning; many younger

    workers see what is happening to their

    parents and are interested in how they can

    be better prepared.

    offer essential tools

    Connect employees to online inancial tools

    and calculators. There are eective online

    resources such as lie insurance calculators

    and retirement planning tools that

    employees can use to help assess inancial

    needs and plan appropriate solutions. Many

    carriers, brokers and government websites

    oer such resources, which would be helpul

    to employees i they know where to ind them.

    focus on hoW emPloYees gain

    Frame the potential beneits o wellness

    initiatives in terms o improved quality o

    lie or employees not reduced costs or

    the company.

    reinforce behaVioral change

    Rewiring bad habits is hard and takes

    repeated and regular reinorcement. This

    is not a once-and-done commitment.

    Insight to Action

    Investing in inancial wellness.

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    heADS IN the SAND

    Given the recession and a sluggish economic recovery, it is no surprise that the Study inds many

    employees eeling concerned and vulnerable about their inancial security. O more concern, is an

    apparent inertia to take action to get themselves on a better track. It would seem that many are

    unaware o the risks they ace or perhaps earul that the solution is beyond their control.

    INCoMe INterruPteD

    Most working Americans rely on their income to cover essential living expenses or themselves

    and those who depend on them. But what happens i that income is interrupted? Forty percent o

    survey respondents o all ages admit that they currently live paycheck to paycheck, and 45% o theworkorce says they could not cover inancial obligations or more than a month i they lost that

    paycheck.5 In act, most employees are not in a position to pay their bills or very long in the event

    o income loss, but many have done little to protect themselves against that possibility.

    CoNCerNeD but Not CoVereD

    What i the principal wage earner in the amily was unable to work because o illness or injury?

    Although more than hal o employees (56%) say they are very concerned about this possibility,

    only hal (53%) o these worried workers have disability income insurance to protect their incomes.

    In addition, less than a third o all surveyed employees have calculated how much income they

    would need to meet essential living expenses in the event o illness or injury that prevented them

    rom working.

    Similarly, 51% o survey respondents are very concerned about the impact o their premature death

    on amily inancial security, but only about two-thirds o them have lie insurance coverage. And less

    than a third have calculated their income replacement needs.

    An alarming number o those who have obtained insurance suspect that their coverage levels are not

    adequate to maintain their liestyle i disaster were to strike. Forty-nine percent o those with disability

    income insurance and 41% o those with lie insurance say they may be underinsured, or do not know

    i they have enough coverage to maintain their liestyle.

    Protecting and Preserving IncomeEmpowering Employees to Conront and ControlTeir Economic Realities

    5

    MetLife, 2010 MetLife Study of the American Dream , 2010.

    41% s wii insancsa ma ndinsd,

    d n nwi avn cva mainaini isin vn pma da

    INSIGHT

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    fig. 4.14

    Most respoets ave ot cacate teir icome repacemet ees

    Employees who have calculated how much theywill need to protect against loss of income due

    to death of a wage earner in the household

    Employees who have calculated how much theywill need to protect against loss of incomedue to a health problem of a wage earner

    in the household

    No

    Yes

    Not sure

    61%

    7%

    32% 62%

    8%

    30%

    bArrIerS to INCoMe ProteCtIoN

    Many people preer to believe that bad things will not happen to them; denial can play a large

    part in why people do not take the necessary steps to protect their income. Unortunately, the

    statistics do not support this illusion. The Social Security Administration estimates that one in our

    20-year-olds will become disabled beore reaching age 67.6

    Also, many mistakenly believe that other employee beneits would kick in to replace lost income

    which is not the case. Disability beneits may be available through Social Security, but can

    sometimes be diicult to obtain. Government disability beneits are only available i a person is

    expected to miss at least a year o work, or their illness or injury is expected to end in death. 7

    When asked why they do not purchase levels o coverage that would better protect them,

    employees cite lack o money: 39% say they cannot aord to pay or more disability coverage,

    and 61% say they cannot aord to pay or more lie insurance. Communicating the cost-eective

    value o their group beneits program may help stimulate participation.

    ProteCteD INCoMe MAkeS or loyAl eMPloyeeS

    Helping employees obtain adequate income protection has advantages or employers too, in the

    orm o increased employee loyalty. Non-medical beneits including income protection products

    are very important loyalty drivers or 59% o employees. Yet only 37% o employers recognize

    this. In reality, the right amount o lie and disability coverage can bring high employee satisaction

    at relatively low cost.

    hIttINg the CoVerAge CeIlINg

    The workplace is the primary source or obtaining insurance coverage or 88% o employees

    who own disability insurance and or 91% o employees who own lie insurance. But it is not

    always possible or employees to obtain enough coverage through their current beneits program.

    Sometimes the maximum oered is not enough to meet employees personal needs. This was the

    reason cited or being underinsured by 42% o employees or disability income protection and or

    19% o employees or lie insurance.

    6 Social Security Basic Facts, Social Security Online (http://www.socialsecurity.gov/pressoffice/basicfact.htm).7 Social Security Frequently Asked Questions, How does Social Security decide i f I am disabled? Social Security Online (http://www.social security.gov).

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    However, those who have hit the maximum ceiling oered by their employers are very interested

    in having an opportunity to purchase additional coverage through the workplace i their company

    were to make higher coverage levels available. Yet currently, o employers who oer some lie

    and disability insurance to employees, only 38% say it is very likely they will oer access to

    supplemental levels o lie insurance, and only 28% say it is very likely they will oer additional

    long-term disability coverage.

    PArIty or hIghly CoMPeNSAteD eMPloyeeS

    Because o group plan maximums, there can be a signiicant gap between the insurance coverages

    that top talent needs and what the standard company group plan can provide, especially when it

    comes to lie and disability beneits. Closing this gap can increase a companys ability to compete or

    the critical skills they depend on.

    Creating an executive plan carve-out that supplements executive Group Lie with Group Variable

    Universal Lie (GVUL) insurance and augments Group Disability coverage with Individual Disability Income

    (IDI) insurance can be a cost-eective way to provide income protection parity or these key employees.

    However, only 46% o companies report they oer executive beneits.

    PAyINg or ProteCtIoN

    Having disability income insurance through work is considered important to employees so much so

    that 58% o respondents say that they are prepared to pay the ull cost o the product, i necessary.

    Fity-our percent eel the same way about lie insurance. Providing access to supplemental levels o

    coverage on an employee-paid basis can help meet this demand without adding to the beneits budget.

    fig. 4.15

    Empoyees beieve it is importat to ave israce avaiabe i te worpace eve i tey ave to

    pay 100% o te cost

    0%

    Gen Y Gen X YoungerBoomers

    OlderBoomers

    70%

    55%55%57%

    Disability insurance

    63%

    Gen Y Gen X YoungerBoomers

    OlderBoomers

    44%

    51%

    58%

    Life insurance

    60%

    65% mps wav maimdisaii cvaavaia mi mpa insd in ppni pcasm wpac.

    INSIGHT

    MetlIe Study o Employee Benets Trends 9th ANNuAl

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    focus attention

    Help employees understand the risks they

    ace, and how they can better provide or their

    amilies by protecting against such risks.

    clarifY costs

    Demonstrate that income protection

    insurance is relatively inexpensive compared

    to the costs o not having coverage idisaster strikes.

    share useful tools

    Provide access to online tools through

    carriers and brokers that help simpliy

    beneits calculations.

    simPlifY concePts

    Clariy explanations or complex insurance

    products so that there is no reason or

    employees to postpone decisions.

    let them choose

    Oer employee-paid lie and disability

    insurance options to give workers access

    to adequate coverage amounts.

    Insight to Action

    Employers can help employees protect the income that underpins inancial security

    in their everyday lives.

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    Many employees are even more unprepared or what might lie ahead in retirement. Since the

    advent o the MetLie Annual Study of Employee Benefits Trends, the story has been one oemployees being behind in savings and worried about the outcome. And the recession has done

    nothing to change this grim situation. Fity-two percent o employees surveyed are behind

    schedule in retirement savings and 10% have not even started.

    fig. 4.16

    Over 60% o Boomers iicate tey are bei i savig or retiremet

    Employees were asked to identify the scenario which best describes the current progress of their retirement savings

    0%

    Behind schedule70%

    48%

    62%60%

    Achieved/on track to achieve goals

    19%

    24%

    Gen Y

    43%

    35% 33%

    YoungerBoomers

    OlderBoomers

    Gen X Gen Y YoungerBoomers

    OlderBoomers

    Gen X

    0%

    Havent yet started to save for my retirement40%

    11%9%

    7%

    Dont have savings goals

    11%

    9%

    Gen Y

    9%

    14%

    8%

    YoungerBoomers

    OlderBoomers

    Gen X Gen Y YoungerBoomers

    OlderBoomers

    Gen X

    Income or Retirement

    I in a m mpsa wina in a

    npacc I dnin ainin aimn. ta inina cis n w.HR Professional

    (1199 employees)

    Chicago, July 2010

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    lookINg to SoCIAl SeCurIty to MAke uP the ShortAll

    Social Security beneits will be a major source o retirement income or about a third o workers,

    with 85% o workers planning to rely on it to some degree. However, while Older Boomers are

    counting on Social Security to be there or them, others are not so sanguine. Eighteen percent o

    Younger Boomers now in their early 50s question whether the Social Security saety net will beavailable by the time they retire.

    fig. 4.17

    Over oe-tir o empoyees are cotig o Socia Secrity or a or a major portio o teir

    retiremet icome.

    All Employees

    Only source of retirement income

    A major source of retirement income

    A moderate source of retirement income

    A minor source of retirement income

    An unreliable source of retirement income, as it mayno longer be available by the time of retirement

    30%

    9%15%

    16%

    30%

    fig. 4.18

    Yoger Boomers are ess cofet abot te avaiabiity o Socia Secrity ta Oer Boomers

    Social Security will not be a reliable source of retirement income as it may no longer be available by the time of retirement

    0%

    30%

    YoungerBoomers

    18%

    OlderBoomers

    6%

    Why olDer eMPloyeeS CoNtINue to Work INSteAD o retIrINg

    Employees age 55 and older who are behind in saving or retirement are more likely to say they

    keep working because they need the money (64%). But those who are on track in their retirement

    planning are more likely to say they are working to stay meaningully engaged (63%).

    Both groups say that maintaining health insurance beneits until they qualiy or Medicare is an

    important reason that they continue to work.

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    eMPloyeeS Are Not DoINg the MAth

    In general, Boomers and Gen X are still expecting to retire at age 65 even though they are behind

    schedule in their savings. And, on average, they have planned or only 20 years in retirement.

    However, based on lie expectancy data, a man age 65 has a 50% chance o living beyond age 85.

    A woman age 65 has a 50% chance o living beyond age 88. And or a couple, both age 65, at leastone person has a 50% chance o living beyond age 92.8 And because these igures are averages,

    50% o the people will live longer than the 20 years they have planned or.

    fig. 4.19

    O average, empoyees ave pae or 20 years i retiremet a to retire rom wor at age 65 bt tis

    is iey to eave more ta a sort o savigs give crret ie expectacies

    Age at retirement

    64.8Years planned for in retirement

    20

    AVERAGE OF ALL EMPLOYEES AVERAGE OF ALL EMPLOYEES

    retIreMeNt requIreMeNtS MAy be too DePreSSINg to CoNteMPlAte

    Over hal o survey respondents (56%), including those on the cusp o retiring, are not conident

    that they know how much annual income their savings will generate once they retire. And most are

    not doing the calculations to ind out.

    They have various reasons or this, but the reality is they ear that the resulting number will be more

    than they have. And that number is likely more than they can save in their remaining working lie,

    especially i they have to retire ive years beore they planned to. Sixty-our percent o people who

    are over 50 say that their retirement would be in jeopardy i this happened.

    fig. 4.20

    Eve tog tey are cose to retiremet, oe-tir o Boomers say it is too eary to ow wat tey

    wi ee, sowig ac o paig or teir retiremet iestye

    Employees indicate the following reasons for why they have not calculated how much annual income they will need in retirement

    0%

    40%

    Younger Boomers

    Older Boomers

    Dont understandhow to calculate it

    28%

    31%

    Dont havethe money

    39%

    37%

    Dont havethe time

    10%

    6%

    Dont feel thatthey need to

    5%

    13%

    Too early to knowwhat is needed

    34%33%

    8 Society of Actuaries Annuity 2000, Male and Female Tables.

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    A relIAble PAyCheCk IN retIreMeNt

    Employees are used to budgeting their living expenses based on a regular paycheck, and lie in

    retirement might be easier to manage i it included a predictable and guaranteed income stream

    a retirement paycheck.

    For several years, the Study has noted that employees have expressed interest in receiving someor all o their retirement savings in the orm o a guaranteed income stream. Sixty-six percent are

    interested in learning more about how they could use annuities as part o their 401(k) plan.

    Nearly hal o employers surveyed strongly agree that oering employees retirement products that

    provide a guaranteed stream o income during retirement years is an important beneits strategy, but

    only 15% o employers report that they currently oer annuities at the point o distribution in their

    deined contribution plans. And only 28% o those companies that do not oer an annuity option

    as part o the 401(k) plan indicate that they are interested in doing so.

    Many employers are understandably somewhat hesitant to oer annuities because o iduciary

    concerns. However, given the signiicant employee interest in options that provide a guaranteed

    stream o income rom retirement savings, it may be time or employers to work closely with

    providers to move more quickly, especially regarding sae harbor legislation.

    fig. 4.21

    Empoyees are itereste i aities, bt empoyers are ot yet respoig

    100%

    15%

    Employers who currentlyoffer annuities

    100%

    28%

    Employers who do not currentlyoffer and are interested

    in offering annuities

    69%

    100%

    Employees who would like theiremployer to offer an annuity

    option as part of their 401(k) plan

    gettINg SerIouS About SAVINg

    Developing a serious savings habit is more likely when saving becomes simple and routine. Many

    employees, including younger workers, are interested in auto-enrollment savings options or

    retirement to help them sta