Plans are a useful tool to recruit, retain and reward key talentNew research from Principal dives into their thoughts about NQDC plans and how their perspectives may have changed this year due to the pandemic.
December 10, 2020–Despite a challenging year for workers and businesses alike, new research conducted by Principal® indicated that nonqualified deferred compensation (NQDC) plans – employer-sponsored benefits plans for key employees—continued to be valuable in helping employers and key talent achieve their goals. Principal gathered and analyzed data from nearly 1,200 plan participants and 137 plan sponsors nationwide to dive into their thoughts about NQDC plans and how their perspectives may have changed this year due to the pandemic.
The survey measured the sentiments of both employers and employees who have NQDC plans in an attempt to understand how the ever-changing pandemic economy may have changed how they view this benefit. Results revealed minimal impact as plan sponsors continued to push NQDC plans as a valuable way to recruit, retain and reward key talent.
“Competition is exacerbated by a more global workforce and the recent forced move of many industries to work from home. The idea of a mobile workforce that can operate from almost anywhere makes the company’s efforts at attracting and retaining even more imperative,” explains John Baergen, vice president of executive benefits consulting at Principal. “In the era of companies needing to squeeze every drop of productivity out of their leadership, losing a top employee or candidate due to an insufficient benefits package is just unnecessary.”
Communication & Participation
Plan participants reportedly valued communication and participation during the pandemic, and largely stayed the course on their contributions. As the use of digital technologies for employer-sponsored plans continues to increase, accessibility, communication and easy-to-use resources could have a significant impact on participation and the perceived value of the plans.
Forty-one percent of plan participants ranked personalized plan related information as the most important type of content they are expecting to receive. Meanwhile, plan sponsors considered the role of financial professionals critical when sharing information about regulatory changes (72%), assisting with annual review (71%) and handling the initial set up (70%).
Kathleen Souhrada, vice president of nonqualified and life administration at Principal, cites innovation as a key element of ongoing efforts at Principal to expand access to products and services. The company’s focus on creative plan design and administration allows them to customize the experience for clients, to the situations they find themselves in.
“Our consulting team has been constantly engaged with plan sponsors to provide input on design and customization of plan features to keep pace with current and unexpected market situations,” said Souhrada. “We also continue to develop our comprehensive package of Principal® Total Retirement Solutions to provide enhanced access and ease for participants when managing their accounts.”
Amidst the pandemic effects, plan participants and sponsors are largely staying the course with their employment and contribution decisions.
The survey revealed low impact on plan participants:
- 89% are likely to stay with their current employer
- 78% not planning to make a career change
- 45% are likely to increase their contributions
Plan sponsors reported:
- 96% would not consider a decrease in contributions
- More than 64% are not planning to make any changes to employee benefits
- 94% are concerned with attracting top talent
- 88% are looking to match the benefits offered by competitors
To see more survey results, view the summary of 2020 key research findings (PDF) here.