By Pension and Benefits Editorial Staff
While a few employers are implementing cutting-edge financial wellness solutions for their employees, most employers continue to refine and enhance traditional financial wellness programs, according to speakers at a recent Employee Benefit Research Institute (EBRI) webinar, Employer Approaches to Financial Wellbeing Solutions. According to Lori Lucas, president and CEO at EBRI, “A lot of what employers are doing today centers around traditional solutions, like tuition reimbursement, financial planning educational seminars or webinars, or employee discount programs.” Programs like student loan debt assistance are not as prevalent, but interest in these innovative plans is growing, she noted.
A recent EBRI survey found that 45 percent of employees feel like they will never be able to pay off their debt, which is impacting employees in many ways. For instance, 51 percent said that their debt is negatively impacting their ability to participate in or contribute to an employer’s retirement plan, and 51 percent said that it is negatively impacting their ability to participate in or contribute to other employee benefits, such as life or disability insurance. “Seven out of ten workers said that they would find it helpful for employers to offer financial wellness programs,” said Lucas.
Why offer these programs? According to Lucas, “Plan sponsors have pointed out to me that the reasons they offer financial wellness initiatives are a combination of both altruistic and bottom-line reasons. If you have a satisfied workforce, you have a workforce that is more loyal and productive. If you have a less financially stressed workforce, they are also more productive.” Each reason for offering employees financial wellness programs is simultaneously bottom-line oriented and altruistic, she emphasized.
“It’s really important for employers to understand financial challenges that are facing their employee population, because that will better help them choose the topics that should be covered in their educational programs,” explained Julie Stitch, vice president of content at the International Foundation of Employee Benefit Plans. According to an International Foundation survey, less than one third of employers do some sort of survey or assessment to find out what challenges are specifically facing their employee population and what sorts of programs or topics their employees would be interested in. She noted, “Employers could make big improvements in this area.”
Goals, obstacles, and program budget. Employers have many goals when offering financial education programs, said Stitch. The most prevalent reasons found in the International Foundation study were: increasing participants ability to manage money (53 percent), improving employees’ understanding of current benefits (44 percent), and improving asset allocation/investment decisions, primarily related to defined contribution programs (36 percent).
Employers do face obstacles for implementing successful financial education programs, such as lack of interest among participants or a workforce with multiple locations or shifts. However, the biggest obstacle, according to Stitch, is a lack of time or resources. “This impacts every employer, no matter what sector or what size,” she said.
However, she noted that employers with “a budget that is dedicated to financial wellness is a sign that a corporation is dedicated to the program.” The International Foundation survey found that about one in four responding organizations currently has a formal budget for financial education, and an additional 20 percent are considering adding one. And, more than one-half of respondents with budgets plan to increase these budgets over the next two years.
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