Most Americans know shockingly little about their employer-provided benefits

When was the last time you checked what your employer is offering you?

By Laura Sanicola

Oct 12, 2015 @ 6:51 pm EST

When was the last time you checked what benefits your employer is offering you?

Nearly four in 10 Americans report knowing little or nothing about their employer-provided benefits such as health care and life insurance, according to the "2015 MassMutual Employee Benefits Security Survey."

“As a whole, we know that most people understand that personal finances are important but there is a disconnect,” said David Potter, assistant vice president of MassMutual Financial Group. “And the employee benefits is a big critical driver to financial health.”

While it may seem shocking that so many Americans are not capitalizing on benefit plans through their employers, financial adviser Kevin Reardon speculates that the statistic may be inaccurate.

“I would argue [the] statistic is too low,” Mr. Reardon said. “Most people don't understand the group benefits provided by their employer, much less how beneficial the benefit is.”

John Powers, a financial adviser, always asks new clients or those that change jobs to send him a copy of their employee benefits summary. “[It's] so that I can advise them about how to take full advantage,” said Mr. Powers, “which isn't as simple as it sounds. There are often many choices within a 'cafeteria plan' and sorting through them takes some effort and understanding.”

One solution to the benefit selection process may lie in the use of online financial tools. Four out of five Americans are not using an online financial tool to manage their retirement, health care and other forms of insurance. In the same vein, 73% report they would be likely use such a tool if it were available for free, especially if it were provided by a “trusted and respected financial services company.”

The underutilization of financial tools points back to a problem with prioritizing, Mr. Potter said.

“If you have four or five different benefits and four or five different tools you are not going to have clarity on what you should prioritize or how much you should spend on life insurance and retirement,” he said.

However, Mr. Reardon is skeptical that online financial tools are the key to future financial planning success.

“I don't think 73% would use them,” Mr. Reardon said. “People are too busy, may have a discomfort towards looking at their finances, don't have the knowledge to understand the results that are provided, and most importantly... won't follow-up on the necessary to-dos generated from a plan.”

David Jackson, a financial adviser at Waddell and Reed, agreed. “What most people need are free mandatory workshops and seminars explaining basic money principles and retirement planning strategies,” he said.

MassMutual's survey, commissioned by KRC Research, is part of an initiative to help educate workers about their employer-provided benefits and was based on the responses of 1,517 adult working Americans.

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