A recent Open Enrollment study by Corebridge Financial showcases opportunities for employers to better support their employees during the open enrollment process. I had the opportunity to speak with Terri Fiedler, President, Retirement Services at Corebridge Financial, and dive into the data to uncover what this means for workplaces.
No One Size Fits All – Employees Need Individual Support
Gen-Zers, Millennials, Gen-Xers, and Baby Boomers all had different perspectives in identifying what can be improved in the open enrollment experience. Of the 18% that find their employer’s open enrollment process confusing and complex, 68% of Millennials and Gen-Zers seek one-to-one support (Figure 1). Nearly half of all Baby Boomers surveyed would like more access to interactive educational tools. Interestingly, 16% of Baby Boomers relayed that none of the proposed options would make the process less confusing and complex. This indicates there are other issues, and possible solutions, at play here. Companies need to self-assess on how to uniquely support this generation.
Terri elaborates on this finding, stating that companies need to understand that “Personalization is key. People are in different stages of their lives and may have different benefit needs.” Employees want to be seen as individuals. According a 2023 study by Gartner, 82% of employees feel it’s important for their organization to see them as a person, yet only 45% believe their organization actually views them this way.
Recognizing that a company is a collective of unique and dynamic individuals, Terri recommends that organizations provide a variety of education options and tools for open enrollment. Targeted email communications, webinars, mobile apps, and access to financial planners will make employees feel uniquely supported, allowing them to select the information resource that best works for them.
Gen Z Is Positive About Their Future
Asking about the respondent’s retirement outlook is an interesting aspect of the study. Gen-Zers felt very optimistic about their retirement plans, with 60% having a good retirement outlook – the highest out of all the generations surveyed and a 18% increase from 2023 (Figure 2).
Terri notes that this generation “recognizes the importance of time being on their side when it comes to saving” and that “they realize the onus is on them to prepare for retirement.” This aligns with how Gen Z intends to take responsible action during open enrollment in 2024, with 60% planning to increase their contributions (Figure 3).
Gen-Zers access information from a variety of sources which may be fueling this positive outlook. Nearly 80% of Gen Z and Millennial Americans report getting their financial advice from social media, according to a 2023 Forbes Advisor study.
Gender plays a role in retirement outlook. Women respondents feel more positive about retirement in 2024 compared to last year, however, they still fall 8% short than males surveyed (Figure 2). American women still only earn 84 cents on the dollar to men, which results in lower lifetime earnings, Social Security, and pensions as highlighted in the American Association of University Women Gender Pay Gap Report. Closing this gap will create equal pay opportunities, yielding a more optimistic retirement outlook.
Planning Ahead Takes Time, But Is Essential To Financial And Health Wellness
“Financial wellness is just as important as health wellness” notes Terri, yet there is a disconnect between belief and action. While 82% of survey respondents feel reviewing retirement savings during open enrollment is a good idea, more than a quarter have no plans to review anything related to their employer-sponsored retirement plan.
The open enrollment process can be time-consuming. Over 30% spend 3 hours or more evaluating and selecting benefits during open enrollment (Figure 4). Individuals choosing not to plan ahead may simply lack time and mental bandwidth. The Society of Human Resource Management found that 44% of U.S. Employees feel burned out at work and 51% feel “used up” at the end of a workday, according to their Employee Mental Health in Research survey from May 2024. Organizations should acknowledge this and equip their employees with all the resources available to make the open enrollment process efficient and informative.
Unexpected financial burdens that can arise with the natural inclination to focus on the present versus planning for the future. Terri mentions that a new 2024 provision as part of the United States SECURE 2.0 Act allows individuals in employer-sponsored and individual retirement plans to withdraw $1,000 to cover the costs of personal or family emergencies. With nearly 1 in 3 Americans living paycheck-to-paycheck in 2024, according to a study by Bank of America Institute, this benefit can offset unexpected costs that can occur.
Many experience financial and health planning for the first time at their first job. More than 60% of 2,200 adults surveyed never accessed a personal finance class at any level of school, according to a 2024 study by Corebridge Financial. Companies bear a responsibility when providing benefits to employees. Organizations need to ensure that employees have access to the right information to make informed financial and health wellness decisions. This not only benefits the individual, but also the company’s investments in their workforce.