PLANSPONSOR - August/September 2018 - 41

Hypothetical Trade-off Scenarios
Respondents were presented with two options for each of the following scenarios and selected their preference
56%
One-time
$5,000
bonus
60%
Guaranteed
3% annual
return
51%
Lower account fees
but " below average "
returns
65%
Job with a firm with
a 401(k) plan but 5%
lower salary
53%
Use of online advice
tools to invest
$10,000
44%
40%
One-time $5,000
contribution to your
401(k) account
64%
6% employer
match vested
after 5 years
Market-based return
that might greatly
exceed 3% but also
could lose money
54%
$250 per month
reduction in health
insurance premiums
49%
Higher account fees
but the possibility
of " above average "
returns
62%
One-time $10,000
contribution made to
401(k) account today
35%
Job with a firm
without a 401(k)
plan but 5% higher
salary
59%
Job with a firm with a
401(k) plan but a 10%
lower salary
47%
In-person meeting
with adviser
to invest $10,000
40%
Use of online advice
tools to invest
$100,000
36%
46%
3% employer match
that is immediately
vested
$250 per month
increase in employer
contribution to your
401(k) account
38%
Guaranteed lifetime of
tax-free payments of
$200/month starting at
age 65
41%
Job with a firm
without a 401(k)
plan but a 10% higher
salary
Participant Trade-Offs: What Tips the Scale in Hard Benefits Decisions?
AFTER five years and more than 5,000
responses, our Participant Survey proves
that employees are largely consistent in
how they value employer benefits. Below
are some highlights.
Rising premiums. Respondents report
that health insurance and retirement plans
are the two most valuable employer benefits,
but do these individuals have a preference
for how employers allocate benefits
dollars between the two? Historically,
the answer has been no-respondents
have been evenly split on whether they
would prefer a $250 decrease in monthly
insurance premiums to a $250 increase
in monthly employer 401(k) contributions.
But the percentage preferring insurance
subsidies has been rising and now stands
at 54%, compared with 48% in 2016.
Stable values. Investors remain a
cautious bunch and seem comfortable
trading higher returns for lower risk
and lower fees. Over the past five years,
a strong majority-more than 60%-of
respondents have consistently chosen low,
fixed guaranteed returns (i.e., 3%) on their
savings over " market-based returns that
might greatly exceed the guaranteed return
but could also lose money. " Respondents
also dislike fees, with 51% this year willing
to accept returns that are below average if
the trade-off is paying lower fees.
" In " -vesting. Low unemployment
rates may be contributing to a change in
perspective on employer contributions
and vesting schedules. In 2014, only 51%
of respondents chose a 6% match with a
five-year vesting schedule over a 3% match
with immediate vesting, but this number
has increased each of the past five years
and now accounts for nearly two-thirds
(64%) of employees. -Brian O'Keefe
PLANSPONSOR.com August-September 2018 41
60%
In-person meeting
with adviser
to invest $100,000
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PLANSPONSOR - August/September 2018

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