Financial wellness is the new norm, and employers are more and more jumping on the bandwagon of getting employees better prepared for retirement.
Today, nearly one-quarter of plan sponsors have a strategy in place to help employees improve their financial wellness, with more intending to add it in the next two years.
Today's plan sponsor must look beyond 401(k) enrollment and participation, says David Tyrie, head of retirement and personal wealth solutions for Bank of America Merrill Lynch. There is a growing need for companies to consider their benefits offering more holistically and provide more comprehensive financial education and solutions that can address today's challenges, such as managing rising health care costs.
Bank of America Merrill Lynchs new 2015 Workplace Benefit Report suggests that adoption of financial wellness programs is most notable among large firms, where nearly half (48%) of those surveyed have one in place, an increase from 35% in 2013.
In the past year, the number of large companies offering employees financial education on topics including budgeting, planning for health care costs and managing debt has significantly increased.
Employers are saying they are placing even more emphasis on expanding resources to financial literacy programs. The majority (70%) of plan sponsors offer employees resources and educational tools on saving for retirement, and four in 10 offer guidance on planning for health care costs. While fewer plan sponsors provide information on other financial management topics, large firms have significantly increased their offering in many areas.
To access resources, employees are most commonly utilizing:
- Online tools to see their full financial picture (49%).
- Followed by a one-on-one relationship with a financial advisor (46%).
- Relevant research or literature to help with investment decisions (45%)
Additionally, according to the study, eight in 10 plan sponsors believe providing access to one-on-one guidance from a financial professional can have a positive impact on the amount of money employees save for retirement.
More personalized guidance and education about an individuals entire financial picture, including savings and health care costs can have a meaningful impact on a persons long-term financial health, added Kim Kasin, managing director, financial guidance executive at Bank of America Merrill Lynch.
Helping employees with their financial life management can be positive for both employees and employers. For employees, it helps to reduce financial stress; and for companies, it makes good business sense because it helps employees be more focused and productive at work.
As far as personalization goes, the research noted some disparity in communication styles when dealing with different generations of employees.
There is no one-size-fits-all approach, and 52% of employers with millennial employees believe millennials view benefits differently than other generations.
For example, 38% say millennial employees value equity compensation more than other employees, and close to half also noted that millennials prefer to invest on their own.
Despite the differences, benefits professionals have noted an increase in using new technologies to connect with younger generations, including texts, LinkedIn, Facebook.
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