February 13, 2020

Why you need to offer more than retirement advice: Adding financial wellness to the line-up

Once upon a time, it was believed that with advice, employees would be able to adequately evaluate their retirement plan options and then be prepared for retirement. The end.

The days where an employer’s commitment to health and wellness meant providing health insurance, retirement advice, and a discounted gym membership are gone. Today, it is generally understood that employees need more than just help with their retirement plans to prepare for retirement and to fully address their financial needs. The reality for most employees is that they will, at some point in their careers, struggle with finances. Workers are naturally concerned about the future, and many people are not on pace to retire. Money issues stemming from these and other financial worries have long-term consequences for the employer’s business and retirement plan. Financially stressed workers are more likely to exhibit higher turnover, generate higher healthcare costs, and suffer from losses in productivity. They also contribute less to their retirement plans, have lower balances, and utilize more loans.

Many employers are beginning to take a proactive and holistic approach to combat this situation by offering financial wellness initiatives for their employees. Employers are realizing that they are usually in the best position to encourage their workers to utilize financial wellness tools to address their financial needs and ultimately create positive outcomes. The ultimate goal of a financial wellness program is to help employees develop the money management tools they need to meet their retirement goals. Financial wellness tools help workers better manage their debts, save for an emergency, balance financial priorites, and get on track to retire. Employers have embraced financial wellness solutions and are making these programs part of their benefits packages for their employees. By mid-2018, the percentage of employers offering financial wellness programs reached 83%, up from 20% in 2015. Employees who are offered financial wellness programs reported that they are more satisfied with their total benefits packages than those who do not have access to this service through their employer (61% vs. 44%). Employees who are financially stable are more likely to make good financial decisions and be better prepared for life’s financial stresses. A well-designed financial wellness program will help employees make better decisions and pursue life on their own terms.

Employers who are interested in a financial wellness program should work with their consultant to evaluate the best solution for the plan. They can help you establish the goals of the financial wellness program, evaluate the providers in the marketplace, and then implement and monitor the program.

Source: “Financial Wellness Perks Expand to Address       Employee Needs” by Stephen Miller, CEBS; SHRM.org; June   11, 2018