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

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  • Mark L. Power
  • Tahira K. Hira

Abstract

Employers 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.

Suggested Citation

  • Mark L. Power & Tahira K. Hira, 2010. "Insurance Company Employees' Financial Expertise and Practices: Implications on Benefit Participation and Satisfaction," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 13(1), pages 111-125, March.
    • Handle: RePEc:bla:rmgtin:v:13:y:2010:i:1:p:111-125
    DOI: j.1540-6296.2009.01171.x
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    File URL: https://doi.org/10.1111/j.1540-6296.2009.01171.x
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    References listed on IDEAS

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    1. Mark L. Power & Tahira K. Hira, 2004. "University‐Provided Retirement Planning Support and Retiree Financial Satisfaction During Retirement: Differences by Gender, Job Classification, and Planning Behavior," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 7(2), pages 121-149, September.
    2. Bernheim, B. Douglas & Garrett, Daniel M., 2003. "The effects of financial education in the workplace: evidence from a survey of households," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1487-1519, August.
    3. Sondra G. Beverly & Marianne A. Hilgert & Jeanne M. Hogarth, 2003. "Household financial management: the connection between knowledge and behavior," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jul, pages 309-322.
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    1. Wai Ming To & Jennifer H. Gao & Ernest Y. W. Leung, 2020. "The Effects of Job Insecurity on Employees’ Financial Well-Being and Work Satisfaction Among Chinese Pink-Collar Workers," SAGE Open, , vol. 10(4), pages 21582440209, December.

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