Offering benefit plans that are valuable and desirable, meet a company’s goals and maintain costs is a balancing act benefits executives dread. But, according to a new report, employers can manage those priorities by building a benefits platform that considers how specific offerings can work together.

Employers with customized benefits plan are more apt to see higher retention numbers, and their employees are more likely to utilize retirement and disability benefits, according to Prudential’s recently released “Insights for Optimizing Your Employee Benefit Program.”

“Employers need better ways to foster employee commitment and productivity through a well-designed benefit strategy,” says Andrew Sullivan, president of Prudential Group Insurance. “By using the right combination of retirement and protection benefits, employers can align benefit and business strategies.”

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For example, as retirement preparedness becomes shouldered less by employers and more by employees, defined contribution plans can be designed to make these tasks as easy as possible.

See also: Nudging employees toward retirement success

Employers can optimize the retirement readiness of their workers by incorporating automatic enrollment and automatic contribution escalation, which increases income deferral rates over time. This may help overcome employees’ inertia in contributing a meaningful amount to the plan.

For many employers, the most common default deferral is 3% of pay, but that isn’t enough, the study notes. Based on Prudential’s research, a model template for 401(k) plans would include:

  • Automatic enrollment of employees at a rate of at least 6% of pay, with employees eligible to opt out or select an alternative contribution rate.
  • Automatic escalation of employee contributions up to at least 10% of pay, in annual 1% increments, also with employee opportunity to opt out.

The study also finds that having adequate disability, critical illness or accident coverage will help protect employees’ future retirement security by reducing the need to withdraw retirement savings. Finding that balance across benefits, Sullivan says, supports employee financial wellness and productivity.

“Details matter,” Sullivan adds. “The more employers understand how plan design affects employee behaviors, the better positioned they are to ensure their plans are aligned with objectives that serve employee and business needs.”

See also: The No. 1 reason financial wellness programs work

For example, disability plans with lower benefit amounts may not provide enough financial protection and could force employees to stop 401(k) contributions or take loans from retirement savings to pay for health care and living expenses. Meanwhile, disability plans offering higher benefit amounts could encourage employees to stay out of work longer than they should.

Prudential’s recent analysis of 40,000 disability claims showed that employees who could cover more than 90% of their monthly expenses stayed out of work for an average of 23 days, while those who could cover only half their expenses came back to work after about 13 days.

And the economic impact to employers can be twofold. Since the employee segment that could cover most or all of its costs was also the segment with the highest average income, not only were durations longer for this segment, they were also more costly per day for the employer.

Employers who don’t think carefully about their coverage levels and benefit plan designs may not only incur costs associated with decreased productivity, but also higher medical insurance expenses.

“Striking the right balance across benefits, such as retirement, disability, critical illness or accident insurance, supports financial wellness and worker productivity,” says Christine Marcks, president of Prudential Retirement. “Understanding the levers for each type of benefit is the best way to develop a platform that supports productive behaviors and outcomes.”

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