Insurance Company Employees' Financial Expertise and Practices: Implications on Benefit Participation and Satisfaction

Abstract

AbstractEmployers continue to shift financial decision‐making responsibility for employee benefits to employees. This article examines employees' financial practices, financial expertise, and levels of benefit participation and overall satisfaction. We show that there are significant differences in employees' financial practices and financial expertise based on socio‐demographic characteristics. While levels of benefit satisfaction and employer ranking are high, significant differences in how employees feel toward their employer exist. Employees more highly value traditional benefits than nontraditional benefits, but satisfaction with benefits was high regardless of take‐up rate. We also find that respondents are more knowledgeable over experiential financial concepts than more specific financial concepts like qualifying conditions for a traditional individual retirement account. Employer‐sponsored financial education programs, which increase employee understanding of employer‐provided benefits and their importance to employees' financial well‐being, should improve overall employee satisfaction, loyalty, and productivity.