Employer Resources for 401(k) | Betterment for Business

A 50-state guide to state-mandated retirement plans [Updated for 2024]

Almost 50% of Employees Think Their Companies Should Offer This Benefit

Almost 50% of Employees Think Their Companies Should Offer This Benefit Oct 11, 2024 2:07:41 PM Our recent survey of 1,000 full-time U.S. workers found that nearly half of employees agreed employers should focus on one thing. Let’s see what that is…. In our 2023 Retirement Readiness Annual Report, we surveyed 1,000 full-time U.S. workers to learn more about how retirement readiness and financial well-being have evolved over the last year. One theme stood out to us: Employees want more help from their employers with student loan debt. In fact, 49% of employees believe that employers should play a role in helping them pay off their student loan debt — this was felt most strongly among Gen Z (71%) That’s something to consider: Nearly half of employees think their companies should offer a benefit helping to pay student loans. It’s clear, employees want student loan benefits And there’s a good reason for this: 40% of workers currently have student loan debt that they’re responsible for paying down. 64% of borrowers said their student debt had impacted their ability to save for retirement. What’s more, our study also found that a 401(k) with an employer match is the number one most desired benefit. But what should employers do? Talk to your employees about their needs Before you jump into offering a new student loan benefit, first take a step back to gain a wider view of your employee’s needs. Ask your employees what they want in terms of a financial benefits package. A simple approach is to have employees rank benefits in order of most likely to use to least likely, and give them a chance to submit open-ended comments. You can start with a list of benefits, like this, for your employees to rank: 401(k) retirement plan 401(k) employer match 401(k) match on student loan payments Access to a financial advisor 529 college savings plan If you already offer some of these benefits, it’s still good to have employees rank their perceived value of them. Additionally, add other benefits to the list that you may consider offering. After you step back and look at the data, you can implement financial benefits that make sense for your company. Betterment at Work offers a variety of benefits to help you meet your employees’ needs Once you’re ready to implement new benefits for your employees, we’ve got you covered. And if you need help deciding what’s best, our team can talk you through the decision. You’ve got options. 401(k) match on student loan payments: When it comes to alleviating student loan debt, we offer an industry-first 401(k) student loan payment matching program. We’ve found that it solves a larger problem when we help employees save in a 401(k) while at the same time they pay down their student loans. Employees don’t have to choose between reducing their debt and saving for retirement. (See it in action: Watch our video to learn how you can offer a 401(k) match based on an employee's student loan payments.) 529 education savings plan: Forward-thinking employers can take it a step further and provide a state-sponsored 529 to save up for higher education costs. Many younger parents are doing three things at once: paying down their student loan debt, saving for their retirement, and saving for college for their kids. That’s a lot to balance. We offer a tax-advantaged 529 savings plan to help your employees tackle rising education costs. Access to a financial advisor: Take your Betterment 401(k) to the next level with Financial Coaching. Offer a benefits package that includes 1:1 financial guidance to help every employee better achieve their goals in and out of work. Award-winning 401(k) for small businesses: Get an affordable and customizable retirement plan designed to scale with you. After all, a 401(k) plan with an employer match is the most wanted benefit among employees. Plus, we’re trusted by some great companies Here are some of the many companies with a Betterment at Work 401(k)... Ready to offer financial benefits your employees want? Betterment at Work makes it easy for small and mid-market businesses to provide a scalable 401(k) plan with an employer match. Plus, our platform empowers you to offer additional benefits like 529 plans, student loan payment 401(k) matches, and 1:1 advice from our financial advisors. Set up a call today to learn more.

5 ways small to mid-sized businesses can attract and retain employees

5 ways small to mid-sized businesses can attract and retain employees Sep 11, 2024 10:04:49 AM Our recent survey of 1,000 full-time U.S. workers uncovers five ways to attract and retain employees of small businesses. According to the U.S. Chamber of Commerce, companies are “facing unprecedented challenges trying to find enough workers to fill open jobs.” In today’s competitive job market, data from our recent survey has found that small to mid-sized businesses can—and should—consider expanding their employee benefits packages to attract and retain talent. In our 2023 Retirement Readiness Annual Report, we surveyed 1,000 full-time U.S. workers to learn more about how retirement readiness and financial well-being have evolved over the last year. And what employees told us about financial benefits could help small businesses build loyal workforces. One of the report’s findings revealed that retirement security appears to decrease by company size. Only 8% of small business employees expect to have a million or more dollars saved for retirement, compared to 17% of midsize and 16% of large business employees. With that in mind, here are five employee financial benefits that smaller companies can implement to help support and retain their staff. 1. Offer a 401(k) program with matching contributions Out of all financial benefits, a 401(k) program is the place to start if you are aiming to attract and retain employees. According to the Retirement Readiness Annual Report, a 401(k) plan is the most desired benefit among employees, yet only 59% of employers currently offer access to a 401(k). A few other stats from the report jumped out at us, showing the demand for these benefits: For employees with access to a 401(k), 83% reported they contribute to that 401(k). 68% of workers receive a match from their employer—a 23% increase from the year before. Of the employees who receive an employer match, 86% contribute enough to get the full match. 92% of employees without a 401(k) match wish their employer matched, a 16% increase in one year. When you offer a 401(k) with employer-matching contributions, your company not only shows that you care about your employees’ future but you also provide a significant financial incentive for employees to stick around. It’s a win-win situation: Employees save for retirement, and you benefit from increased loyalty and reduced turnover. 2. Implement a student loan/401(k) matching program Offering a 401(k) match on student loans can help employees save for retirement while they pay off their college debt. Student loan debt is a major concern for many employees, especially younger ones. And student loans only become more stressful when one is trying to balance saving for retirement at the same time, as our report shows: 40% of workers currently have student loan debt that they’re responsible for paying down. 64% of borrowers said their student debt has impacted their ability to save for retirement. Almost half (49%) of employees believe that employers should play a role in helping them pay off their student loan debt — this was felt most strongly among Gen Z (71% of whom agreed). Through Betterment at Work’s industry-first solution, employers can provide 401(k) matches on student loan payments. This innovative benefit shows that you understand the financial challenges your employees face and are willing to help them manage both short-term and long-term financial goals. 3. Provide an employer-sponsored emergency fund Financial emergencies can strike at any time, leaving employees stressed and distracted. An employer-sponsored emergency fund can offer a safety net that can reduce financial anxiety. According to our report: 49% of employees said an employer-sponsored emergency fund would reduce their financial anxiety. Just over half (52%) of employees reported currently having an emergency fund — a seven percentage point drop from 2022 (59%), and a 14 percentage point drop from 2021 (66%). 51% of small business employees used their emergency funds, dropping to 43% for workers at midsize and large businesses. Of all generations, millennials (53%) tapped their emergency funds the most — compared to 49% of Gen X, 46% of Gen Z, and just 27% of boomers. One of the most striking statistics in our report is that only 8% of employers offer an employer-sponsored emergency fund, yet it is the third most valued benefit for employees — making it the largest gap of any benefit. In a world where nearly four out of five workers (78%) reported that their finances cause them anxiety, offering an emergency fund shows you care about their well-being. This may lead to higher job satisfaction and increased loyalty, as employees feel supported and valued. 4. Offer access to a live financial advisor Navigating the complexities of personal finance can be confusing. By providing access to a live financial advisor as a financial benefit, you can make a significant difference in your employees’ financial lives. Offering this benefit helps employees make informed financial decisions, including planning for retirement, debt management, estate planning, and more. Our report found that: Only 17% of employees report having access to a financial advisor through their employer. For those who don’t have access to an advisor through their employer, 50% reported that they would want that as a financial wellness benefit and 59% would want to meet with them two to three times a year. Small business employees meet with advisors most at 75% of employees —compared to just 42% of large business employees. Thomas Moore, Sr. Director of Betterment for Advisors, sums it up well, stating that access to a financial advisor “presents a huge opportunity for employers to differentiate by providing more holistic wellness programs to their employees — benefits packages should start, but not end, with the 401(k).” 5. Provide access to a 529 college savings plan Education expenses can be a significant financial burden. And for some parents, it’s a double burden if they are paying off their own student loans while attempting to save for their children’s education. By offering access to a 529 college savings plan, you can help employees save for their children's education and alleviate some of that stress. Our report highlights that: Over a quarter (26%) of employees are currently saving money for education expenses, but less than half (45%) are currently using a 529 education savings plan due to inaction and lack of awareness. Only 5% of employers currently offer 529 plans, which is surprising since, according to research, 70% of parents are concerned about having enough funds to pay for college. Offering a 529 plan can help attract employees who are thinking about their children’s future and want to work for a company that supports their goals. Offer financial benefits your employees want Betterment at Work makes it easy for small and mid-market businesses to provide a scalable 401(k) plan with an employer match. Plus, our platform empowers you to offer additional benefits like 529 plans, student loan payment 401(k) matches, and 1:1 advice from our financial advisors. Set up a call today to learn more.

Bridging the Gap: Benefits Employees Want vs Benefits Companies Offer

Bridging the Gap: Benefits Employees Want vs Benefits Companies Offer Aug 19, 2024 2:11:57 PM We explore new survey data that reveals where financial benefits typically fall short—and what you can do about it at your company. Table of Contents: 3 benefit themes for employers to consider How to conduct a benefits gap analysis Survey results: The employee/employer gap In our 2023 Retirement Readiness Annual report, Betterment at Work surveyed 1,000 full-time U.S. workers to learn more about how retirement readiness and financial well-being have evolved in the last 12 months. We asked survey respondents to review and rank 11 potential benefits to determine what financial benefits employees currently have access to and which matter most. The results? Survey findings showed clear gaps in employee desires and the benefits being offered by their employers. To help explore these gaps, we’ve bucketed benefits into three themes that arose from the report’s findings: 401(k), financial planning, and education savings. 3 benefit themes for employers to consider As we reviewed the survey results, three themes emerged that employers can use to explore potential gaps in the benefits they offer compared to the benefits their workforces want. Theme 1: 401(k) benefits These benefits include: 401(k) plans 401(k) matching programs A 401(k) plan is the #1 desired benefit among employees. However, only 59% of employers currently offer access to a 401(k), up seven percentage points from the previous survey. That is positive growth, showing companies are continuing to recognize this as a crucial need for employees. If you don’t offer a retirement plan, you may want to explore 401(k) options that can help attract and retain talent. A 401(k) matching program was the #2 most desired benefit among employees. Less than half of companies offer a 401(k) matching program, with only 47% percent of workers receiving a match from employers. Of that group, 86% contribute enough to get the full match. It’s no wonder that 92% of those without a 401(k) match wish their employer would offer a 401(k) match—since these programs can help fast-track retirement savings and retain employees. Key takeaway for employers: Offer an easy-to-use 401(k) plan with a competitive matching program to attract and retain employees. Theme 2: Financial health and planning benefits These benefits include: Employer-sponsored emergency fund Flexible spending account (FSA) or health savings account (HSA) Wellness stipend Budgeting and savings tools Access to a live financial advisor Childcare support Employer-sponsored emergency funds were the #3 desired benefit. Only 8% of employers offer an employer-sponsored emergency fund. As the third most valued benefit for employees, this is the largest gap on the list. Our survey also found that 49% of employees said an employer-sponsored emergency fund would help reduce their financial stress. With 46% of employees reporting that they used their emergency fund during the past year, there is a great opportunity for employers to address. Flexible spending account (FSA) or health savings account (HSA) ranked #4. At number four on the list of most desired benefits, FSAs/HSAs are only offered by 37% of companies, which could be another important avenue for employers to explore. Furthermore, we found that 31% of employees said they would be enticed to leave their jobs for an FSA or HSA. Wellness stipends were #5 on the most desired benefits list. Wellness stipends are one of the larger gaps employers should consider. We found that 32% of employees said they would be enticed to leave their jobs for a wellness stipend. However, only 9% of companies offer the benefit. The increasing interest in wellness benefits reflects a growing awareness around mental and physical health in society. Employers who are equipped to meet this need clearly demonstrate their support for well-being in the workplace. Budgeting and savings tools ranked #6 on the list. Only 12% of employees offer budget and savings tools to employees. Similar to other benefits, over a quarter (26%) of employees would consider leaving their jobs for budget and savings tools. Examples include savings calculators, online budgets, educational resources, and the ability to link multiple accounts to see all savings in one view. With 78% of workers reporting that their finances cause them anxiety, financial tools may help them gain clarity and reduce the stress of their financial lives. Access to a live financial advisor was #8. Only 17% of companies offer access to a financial advisor. However, our survey found that 55% of workers with access to a financial advisor have met with the advisor in the past year, and that number jumps to 75% among small business employers. The top two reasons employees meet with an advisor are: retirement planning and investment advice. This data supports the idea of packaging your 401(k) plan with a financial advisor for a valuable employee benefit. Childcare support was the #10 most important benefit. Child care is expensive for parents to afford and for employers to offer as a benefit, which is likely why only 8% of companies offer it. But if you can afford to offer childcare support as a benefit, you’ll be assisting your employees with both convenience and a huge financial benefit, as the average cost of childcare is $11,582. Key takeaway for employers: Offering a benefits package that helps meet critical needs can go a long way with your employees. But you don’t have to offer everything. Rather, it’s important to understand your workforce’s needs to pick and choose which benefits will have the most meaningful impact. Theme 3: Student loan and education benefits These benefits include: Student loan 401(k) matching programs Student loan financial assistance or repayment programs 529 college savings plan Student loan 401(k) matching programs were the #7 most desired benefit. This is where paying for education and saving for retirement collide. With the passage of SECURE 2.0 Act, qualified student loan repayments made by employees can count as elective deferrals and qualify for 401(k) matching contributions from an employer. At the time of our survey, no companies offered this type of benefit, yet we found that 40% of workers currently have student loan debt that they’re responsible for paying down. Now, through Betterment at Work’s industry-first solution, employers can provide 401(k) matches on student loan payments. Student loan financial assistance or repayment programs ranked #9 on the list. Only 11% of employers were reported to offer student loan financial assistance or repayment programs. On top of that, we found that 21% of employees would be enticed to leave their jobs for financial assistance on student loans. 529 college savings plans ranked #11 on the list of most desired benefits. Only 5% of employers currently offer 529 plans, which is surprising since, according to research, 70% of parents are concerned about having enough funds to pay for college. Our survey also found that 26% of employees are currently saving money for education expenses, and of that group, only 45% currently use a 529 to do so. One of the main reasons is a lack of awareness around this state-sponsored plan. Savvy employers can use 529 plans to support the education savings plans for their employees. Key takeaway for employers: To help retain employees, create benefits programs that align with your workforce’s education-related needs, taking student loan debt into account as well. Also, as your workforce evolves, consider future employees and the potential education needs they may have. How to conduct a benefits gap analysis Employers can take the following steps to identify gaps and then implement new benefits that fit their workforce’s needs. Step 1: Make a list of the benefits you don’t offer You likely offer some benefits already. To conduct a gap analysis, you’ll want to focus on what you don’t offer. At this point, make a list of benefits you don’t offer with a description of each. Then compare the benefits you currently offer with ones you might want to add. You’ll likely want to avoid offering a new benefit that is similar in nature to a current benefit. For example, you may want to offer only one type of student loan benefit. Step 2: Run a cost analysis Now, you need to know if you can afford additional benefits. Create a mock budget to illustrate the financial impact on your business for each benefit. Be sure to model the estimated impact that offering each benefit may have on employee acquisitions and retention. This can be difficult to calculate, so consider different scenarios. What you’re really trying to do is calculate the ROI of each benefit’s ability to retain employees. After you run a cost analysis, eliminate any benefits from the list that your business simply cannot afford. (Bonus: Download our planning guide to calculating the ROI of your 401(k) plan.) Step 3: Survey employees Bring your team into the conversation. Once you’ve determined what benefits you can afford, survey your employees to measure their interest in each one. Be sure to include a clear description of each benefit and how it would be administered. A simple approach is to have employees rank benefits in order of most likely to use to least likely to use, and give them a chance to submit open-ended comments. For larger companies, you can also use more sophisticated polling methods such as MaxDiff surveys to identify the ideal mix of benefits for your workforce. Implement your benefits… Once you understand which benefits you can afford to implement, and which ones your employees value most, you’ll want to decide if you can provide the benefits in-house or if you need to partner with a benefits provider such as Betterment at Work. Survey results: The employee/employer gap The chart below shows a snapshot of the top 11 benefits ranked in order of most desired by employees with the percentage of employers who offer each benefit. Use this data as a starting point to help identify gaps in your financial benefits program. Bridge the benefit gap at your company Betterment makes it easy for small and mid-market businesses to provide a scalable 401(k) plan, plus offer additional benefits like 529 plans, student loan payment 401(k) matches, and 1:1 advice from our financial advisors. See how Betterment at Work can enhance your financial benefits package.

What are unallocated funds?

Key 2024 Deadlines for 401(k) Plan Sponsors

The key factors holding back your employees’ retirement readiness

The key factors holding back your employees’ retirement readiness Jan 3, 2024 10:56:07 AM And how the types of benefits you offer can help. Broadly speaking, the economy did alright in 2023. Inflation slowed, stocks rallied, and employment remained strong. But you wouldn’t know it by looking at the current mood of American workers. According to our latest annual survey of 1,000 full-time employees, their levels of financial wellness trended down in 2023 at the same time their financial anxiety climbed by seven percentage points. So what gives? We sifted through the data and saw several trendlines emerge. Explore them in full detail in our Retirement Readiness annual report – and keep reading below for a preview. Inflation’s ripple effect on retirement Inflation slowed significantly in 2023, but that’s not to say that all prices fell. The average American household spent $709 more per month in 2023 compared to 2021 on things like rent, groceries, and gas. Until wage growth catches back up to inflation, workers will continue to feel their paychecks pinched, and two casualties are taking shape as a result: Emergency funds: Although more than half (52%) of employees reported currently having an emergency fund, that’s a 7% drop from 2022, and 14% decrease from 2021. Retirement savings: A worrisome 3 in 10 workers tapped into retirement savings in the past year to pay for short-term expenses, a significant setback for their long-term goals. All of this has left workers feeling stressed. More than half (58%) went so far as to say the anxiety makes it hard for them to focus at work. But our research shows that some employer support and benefits can go a long way toward calming the waters. The growing role of financial benefits in retention If short-term expenses are depleting workers’ savings, it’s no surprise that a strong 401(k) and financial wellness benefits program remains at the top of workers’ wish lists. The importance of these benefits continues to grow as well, with 70% of workers saying financial wellness benefits are more important now than a year ago. A growing percentage of workers (60%) even say they’d be enticed to leave their job for better financial benefits. Student loan debt, however, continues to prevent the adoption of financial benefits for many. 64% of workers said student loan debt impacts their ability to save for retirement, and when asked why they don’t take advantage of their employer’s benefits, by far the most common reason was their paycheck simply won’t stretch that far. On this front, good news is just around the corner. Thanks to the SECURE 2.0 Act, employers will soon be able to offer a 401(k) match on their employees’ qualifying student loan payments, helping workers tackle two goals at once.

How your 401(k) plan can help boost employee financial wellness (and productivity)

How your 401(k) plan can help boost employee financial wellness (and productivity) Dec 12, 2023 3:23:10 PM Financial stress is hurting productivity. Here’s how you can help change that at your business starting with your 401(k). Not only does financial stress make an individual’s personal life more difficult, it can hurt their employer's bottom line. As business leaders, we are in a position to make a positive impact on our employees’ lives and our business performance. Three different studies, one diagnosis Three national studies, including our own, found that financial stress negatively impacts work performance. PwC found that 60% of full-time employees are stressed about their finances and one in three full-time employees says that money worries have negatively impacted their productivity at work. Morgan Stanley found that 66% of employees agree that financial stress is negatively affecting their work and personal life. Our own study at Betterment at Work found that 46% of workers said that financial anxiety impacts their ability to work all or most of the time. The problem is clear but what do we do about it? The right benefits can help ease the pain When asked to rank potential financial wellness benefits that an employer could offer, employees ranked a 401(k) plan first followed by 401(k) matching contributions. These are some of the additional findings in our 2022 Betterment at Work Financial Wellness Barometer survey. If you offer a 401(k), it may be your core financial benefit but it isn’t the sole remedy. Our study also found that 93% of employees said it was at least somewhat important that their employer provides financial wellness benefits. Also, the demand for these benefits is increasing, with 68% saying financial wellness benefits are more important to them now than they were a year ago. It’s important to look at how you can build financial wellness features around your 401(k) plan to support your employees’ financial lives—and your business’s future. A comprehensive approach to wellness that starts with your 401(k) Knowing the needs of a modern workforce, at Betterment at Work, we’ve built a suite of financial benefits designed to support your employees, starting with your 401(k) plan. We believe that evolving your benefits with the needs of your workforce can help provide a strategic advantage in attracting and retaining talent. At our core is our modern 401(k) platform: Your 401(k) plan should be easy to manage for you and easy to use for your employees. Our technology streamlines this, whether via integrations with common payroll providers or through our intuitive platform that helps employees invest in diversified portfolios of generally low-cost ETFs. Enhancing your 401(k) plan: We’ve built additional benefits that integrate with our 401(k) platform to make managing benefits easier and reduce the financial stress that your employees carry. 529 Education Savings: Including 529s in your benefits package helps employees tackle rising education costs and shows your commitment to their financial health. It’s easy to manage, with 529s integrating into your existing benefits platform for a seamless experience. Financial Coaching: Help employees take better control of their finances with tailored 1:1 guidance and advice. Adding Financial Coaching to your Betterment 401(k) can help build a more confident, productive team. Plus, as a fiduciary, every financial advisor at Betterment is legally responsible to act in your employees' best interest.

Betterment Editors

Betterment Editors

Articles by Betterment Editors