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Principal® Survey Finds Nonqualified Plans Critical in Key Employee Recruitment and Retention
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As the workforce becomes more mobile, nonqualified deferred compensations plans cited as critical offering
DES MOINES, Iowa--(BUSINESS WIRE)--
As employers look for ways to attract and retain the most qualified candidates, employee benefits are becoming more critical to securing top talent who play important roles in their organization1. According to the U.S. Bureau of Labor Statistics, employees change jobs for better pay, improved benefits, opportunities for growth, or a different career altogether. New research conducted by Principal Financial Group® indicates that nonqualified deferred compensation (NQDC) plans – employer-sponsored plans that enable key employees to save more of their earnings for retirement – remain valuable in helping employers recruit and retain key talent, and important in helping participants reach retirement savings goals.
There’s no shortage of openings for employees to consider as there are now 1.9 job openings for every unemployed worker2. In fact, employers (88%) and employees (91%) agree that most key employees are actively looking for a new job, according to the Principal research. While employers say they’re increasing pay to help retain existing key talent, employees state employers could do more.
“Labor has been incredibly mobile this year, as employees have changed jobs or career paths in search of better pay, benefits, and growth opportunities. Our research clearly indicates that a non-qualified deferred compensation plan serves as a valuable benefit to the retention of key employees, and attractive to prospective candidates,” said Nate Schelhaas, senior vice president and head of life protection solutions at Principal®.
Some of the key takeaways for plan participants include:
For participants, NQDC plan availability plays an important role in the decision to stay with an employer (53%) or take a new job (60%)
Eight in ten participants say a NQDC plan is important in reaching their retirement goals
Of the 27% of participants with a NQDC match from their employer, nearly all (93%) contribute enough to get the maximum match
From a plan sponsor point of view:
The top two reasons plan sponsors provide NQDC plans is to provide a competitive benefits package (89%) and to help participants save for retirement (88%)
59% of plan sponsors are concerned with attracting key employees, and 55% are concerned about losing key employees to competitors
The majority say offering a NQDC plan is valuable for recruiting (59%), and retention (66%)
About Nonqualified Plan Participant and Plan Sponsor Satisfaction Survey
Between June 6-27 and September 6-26, 2022, Principal conducted two online surveys with employers and employees who have nonqualified deferred compensation plans with Principal®. A total of 159 completed surveys were received from employers and 758 from key employees. This marks the 15th consecutive year Principal has conducted this research and the results provide statistics and trends to help financial professionals and employers benchmark their key employee benefit offering against their peers.
Principal Financial Group® (Nasdaq: PFG) is a global financial company with 19,000 employees1 passionate about improving the wealth and well-being of people and businesses. In business for more than 140 years, we’re helping more than 55 million customers1 plan, protect, invest, and retire, while working to support the communities where we do business, and build a diverse, inclusive workforce. Principal® is proud to be recognized as one of America’s 100 Most Sustainable Companies2, a member of the Bloomberg Gender Equality Index, and a Top 10 “Best Places to Work in Money Management3.” Learn more about Principal and our commitment to building a better future at principal.com.
1 As of September 30, 2022 2 Barron’s, 2022
3 Pensions & Investments, 2021
Insurance products issued by Principal National Life Insurance Co (except in NY) and Principal Life Insurance Company®. Plan administrative services offered by Principal Life. Principal Funds, Inc. is distributed by Principal Funds Distributor, Inc. Securities offered through Principal Securities, Inc., 800-247-1737, member SIPC and/or independent broker/-dealers. Referenced companies are members of the Principal Financial Group®, Des Moines, IA 50392. Principal®, Principal Financial Group®, and Principal and the logomark design are registered trademarks of Principal Financial Services, Inc., a Principal Financial Group company, in the United States and are trademarks and services marks of Principal Financial Services, Inc., in various countries around the world.
