Many in "Gratification Nation" Live Paycheck-to-Paycheck;
63% Carry Credit Card Debt
NEW YORK, December 27, 2004 –

The number one concern of today’s employees is having enough money to pay bills during a period of income loss, with 71% of full-time employees surveyed in the MetLife Employee Benefits Trend Study reporting that they are "extremely concerned." Other key concerns include having enough money to make ends meet (63%), "having appropriate health insurance" (59%) and outliving their retirement savings (49%). Despite the high level of anxiety, however, most full-time employees value paid vacation days (cited as most important by 64% of workers) significantly more than income protection and retirement savings products such as employer-funded pension plans (32%), disability insurance (26%), life insurance (24%) and long-term care insurance (8%). Among the youngest employees surveyed (age 21 -30), sick leave (49%) and flexible work schedules (29%) also take precedence over employer-funded pension plans (25%), life insurance (21%) and disability insurance (19%).

"Many employees are stuck in a personal finance impasse," notes C. Robert Henrikson, president and chief operating officer of MetLife, Inc. "They worry deeply about having the proper healthcare and benefits in place for their families. But far too often, they allow their long-term plans to get derailed by short-term priorities. The lure of – and often the real need for – big-ticket purchases such as cars and home furnishings, paid/unpaid vacations and small discretionary expenditures: these are just some of the shorter-term priorities that can crowd out longer-term goals."

When it comes to retirement savings, a similar pattern emerges. Almost half of full-time employees (49%) say that they worry a great deal about outliving their retirement money, yet almost one-third either haven’t started saving for retirement or haven’t established savings goals. As a result, only 24% of full-time employees feel in control of their finances, and nearly three-quarters (70%) do not have a financial plan.

"Today’s employees need a financial roadmap to get them back on track," says Craig Guiffre, senior vice president, Institutional Business, at MetLife. "With employees now responsible for selecting and funding a significant share of their healthcare, retirement and insurance-related benefits, they need more financial education and advice than most are currently receiving."

Only 40% of full-time employees – and 29% of those age 21 – 30 – state that they understand which benefits options best meet their needs. To fill the gap, 27% of full-time employees overall rely on friends and relatives for financial advice, while 46% don’t consult with anyone. Almost half (43%) of employees would like their employer to provide them with access to a financial planner to help make decisions about how to invest their 401(k) money.

Not surprisingly then, only 31% of employees give their companies’ current benefits communications program high marks. Roughly the same percentage (36%) give high marks to their companies’ benefits package, up only slightly from last year (32%). Among workers who are highly satisfied with their companies’ employee benefits, overall job satisfaction is nearly three times as high (68%) as it is for employees who are not satisfied (23%).

Among other key survey Findings:

• Four in Ten Workers Live Paycheck-to-Paycheck – Approximately one-third (28%) of all full-time employees (and 37% of female employees) report that they sometimes have trouble paying their monthly bills. Four in ten full-time employees (42%) report that they are living paycheck-to-paycheck. Among women and widows who work full-time, the current percentage living paycheck-to-paycheck rises to 51% and 70% respectively.
• Burdened with Credit Card Debt, Employees Struggle to Make Ends Meet – Compounding cash-flow worries, more than three-quarters (76%) of full-time employees are carrying debt other than home mortgages and auto loans, and 63% have credit card debt. Somewhat surprisingly, the debt level is fairly consistent across all age groups, with 16% of employees making the minimum monthly payment on their credit cards and 47% paying off somewhat more than the minimum most months.
• Voluntary Benefits Grow in Popularity, Especially Among Young Workers – More than one-third (34%) of full-time employees surveyed say they are interested in having their employer provide a wider array of voluntary (i.e., employee-paid) benefits, up from 28% in 2003. Full-time employees view the payroll deduction associated with voluntary benefits as a "convenient way to make payments" (62%) and as a "means for becoming more disciplined about saving" (51%). The ability to "sign up for insurance without going through a medical exam" is also a strong selling point for 50% of full-time employees. In terms of buying patterns, young workers are more likely than their peers to purchase financial and protection products at work. While only 18% of full-time employees currently identify the workplace as their primary channel for purchasing insurance, retirement savings and financial/legal planning products, the percentage rises to 25% for young workers age 21 – 30.
• Employee Cost Sharing is Here to Stay, Even as Company Profits Rebound – Fewer employers are paying the full cost of their employees’ insurance – and this trend is unlikely to reverse itself any time soon. Nearly two-thirds (60%) of employers say that they expect employees to continue paying for some or all of their benefits costs, even though the economy is improving. Currently, only 27% of companies pay the full cost of their employees’ medical insurance, while even fewer fully subsidize dental coverage (19%) and vision care (16%). A somewhat higher percentage of employers pay the full cost of their employees’ disability insurance (30%) and term life insurance coverage (32%).

The MetLife Employee Benefits Trend Study was conducted during the third quarter of 2004 and consisted of two distinct surveys. The employee survey, fielded by NOP World, polled 903 full-time employees, age 21 and older, at companies with at least two employees, and 1,542 voting-age consumers. The employer survey was conducted by TNS NFO and polled a total of 1,528 HR/Benefits executives from companies with at least two employees participated in the employer survey.

MetLife, a subsidiary of MetLife, Inc. (NYSE: MET), is a leading provider of insurance and other financial services to individual and institutional customers. The MetLife companies serve individuals in approximately 13 million households in the U.S. and provide benefits to 37 million employees and family members through their plan sponsors. Outside the U.S., the MetLife companies serve approximately 8 million customers through direct insurance operations in Argentina, Brazil, Chile, China, Hong Kong, India, Indonesia, Mexico, South Korea, Taiwan and Uruguay.