Employers who try to offer all services all the time may be running a risk of alienating workers, according to new consumer research on financial services marketing by the Life Insurance Marketing and Research Association in Windsor, Conn.
Testing consumer response to the new Financial Services Modernization Act, which allows banks, insurance companies, and investment companies to cross over into each other's businesses, LIMRA uncovered a consumer bias against one-stop shopping.
More than half (56 percent) of 2,481 consumers surveyed in January said that one-stop shopping for financial services was not attractive, and about 22 percent worried about the safety of having a large portion of money with a single institution.
Privacy also is an issue with consumers. About 40 percent of respondents don't like the idea of banks or other institutions offering personalized financial suggestions or having privileged information about a broad range of financial planning issues.
The study did not examine the employer's role in sponsoring financial service programs, but as companies continue to add ancillary services to core benefits from a new breed of providers under FSMA, conflicts could be the result.
Employees may think their employer is trying to cut costs with a new cash balance plan, but pension dollars aren't usually the issue.
A financial analysis of 78 cash balance and other hybrid retirement plans conducted by Watson Wyatt Worldwide in Washington reveals that employers only save an average of 1.4 percent, and nearly one third of plans experience cost increases as employers subsidize benefits for employees near retirement age.
"The cash balance shift is about redistributing retirement dollars democratically among workers," says Sylvester J. Schieber, Watson Wyatt's vice president of research.
"These plans provide a more tangible benefit for workers who stay with an employer for less than a full career or who terminate employment prior to retirement eligibility. The cash balance phenomenon is about how employers' retirement programs can more effectively meet long-term work force needs."
Are your employees and retirees ready to buy employee benefits and other services over the Internet? Two leading benefits administrators think so.
Hewitt Associates in Lincolnshire, Ill., recently announced the launch of Sageo, an online benefits administration and information service for retirees. The new service will allow retirees to shop for and buy health care coverage and research health and medical issues with resources provided by the Mayo Clinic.
The concept is designed to be a one-stop health care shopping center for the retirees of corporate clients, explains Sageo chief executive Tom Schmitz. Corporations would refer retirees to the online service from which they would choose among several health care alternatives. Enrollment, administration, and claims management would be conducted primarily over the Internet, though telephone and fax service would be available to retirees.
Retirees would also have access to provider directories and a library of health information from Mayo Clinic online and receive an electronic mail address for ongoing communication with the service and other participants.
NCR Corp. in Dayton, Ohio, is considering becoming a pilot customer of the Sageo service, according to Michael Kriner, director of health care and disability management. NCR, which has about 4,000 retirees who have not yet hit age 65, already uses Hewitt's benefit administration services.
Hewitt plans to have at least six employers online with Sageo by the end of the year and process at least 250,000 lives in the fall enrollment period. The company expects to add financial, legal, and other services for retirees and may consider expanding Sageo to include nonretirees if the present service is successful, Schmitz says.
Meanwhile, PricewaterhouseCoopers is also building a platform for delivery of employee benefits and other services over the Internet.
In March, the accounting and benefits consulting company announced a relationship with Ask Jeeves Inc., the operator of the Ask.com Internet search engine to deliver a suite of services to employers that use PricewaterhouseCoopers for benefits administration.
PricewaterhouseCoopers says the Internet company will help employers reduce support costs and enhance the online experience of employees who already use the Internet to access benefits information.
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|Publication:||Risk & Insurance|
|Date:||Jun 1, 2000|
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