Why Group Insurance and Pension Plans Drive Employee Satisfaction
Most organizations understand the importance of competitive pay. But increasingly, research shows that employee satisfaction is shaped just as much by benefits as by salary. Two benefits in particular — group insurance and pension plans — stand out as critical drivers of how valued, secure, and committed employees feel at work.
The Numbers Behind Satisfaction
Studies consistently show a strong link between benefits and satisfaction. According to LIMRA’s 2025 workplace benefits study:
43% of employees report being highly satisfied with their benefits.
27% are somewhat satisfied.
30% are not satisfied at all.
That means nearly one in three employees may feel under-supported by their benefits package — a major gap for employers trying to retain talent.
Looking more closely at what employees value, the Plan Sponsor Council of America (PSCA) found:
73% of employees rank retirement plans among the most important workplace benefits.
72% say the same about health insurance.
Nearly two-thirds would decline a job offer if these benefits were not included.
This research confirms that group insurance and retirement plans aren’t just optional perks. They are viewed as fundamental components of fair compensation.
Why These Benefits Matter
1. Financial Security Today and Tomorrow
Group insurance provides peace of mind against immediate risks like illness or injury. Pension plans, on the other hand, address long-term security. Together, they give employees confidence that both their present and future are protected.
2. Retention and Recruitment
Employee turnover is expensive. Replacing a single employee can cost between 50% and 200% of their annual salary, depending on the role. Benefits are a proven way to reduce that risk. LIMRA found that more than 60% of employees say strong benefits make them more likely to stay with their current employer. For new hires, benefits often tip the balance between competing offers.
3. Loyalty and Engagement
When employees feel supported, they tend to give more back. A worker who knows their family is covered under health insurance, and who can see progress toward retirement savings, is less distracted and more engaged in their daily work. Benefits signal that the employer values employees as people, not just as workers.
4. Closing the Understanding Gap
One surprising finding in LIMRA’s research is that understanding benefits matters as much as having them. Employees who fully understand their health and retirement benefits are far more likely to report high satisfaction. In other words, the way benefits are communicated and explained is just as important as the benefits themselves.
What Employers Can Do
For organizations looking to strengthen satisfaction through benefits, three actions stand out:
Communicate the full value – Share total compensation statements that highlight not just salary, but the employer’s contributions to insurance and retirement. Many employees underestimate how much these programs cost and how much value they receive.
Educate employees – Provide clear explanations, workshops, or one-on-one sessions to help employees make informed use of their benefits. Greater understanding drives greater appreciation.
Adapt to workforce needs – Today’s workforce is diverse. Younger employees may prioritize flexible health benefits, while older employees may care more about retirement savings. Offering choice or tailored options increases relevance and impact.
The Takeaway
Employee satisfaction isn’t just about pay. It’s about how secure people feel in their day-to-day lives and their future. Group insurance addresses the immediate, while pension plans prepare for tomorrow. Together, they create a foundation for loyalty, engagement, and long-term organizational success.
At Next Benefits, we believe that helping employees feel secure is one of the smartest investments a company can make — for both people and performance.
