As the number of employees grappling with money challenges skyrockets, some employers are looking to their benefits advisers to help them address the problem through financial literacy programs.
A new survey by the International Foundation of Employee Benefit Plans confirms the pain that employees are experiencing. Its findings show that 66% of employees are struggling with debt, 60% are finding it difficult to save for retirement, 51% face challenges paying for their kids’ educations, 48% struggle with living expenses and 36% have trouble dealing with medical expenses.
Employee financial pressures are having a negative impact on workplace engagement and productivity, says Julie Stitch, Director of Research with the IFEBP.
The good news, she says, is that the survey also shows that financial literacy programs can provide a successful counterweight. Two-thirds of the employers that offer some form of financial education to their employees rate their programs as successful, with free personal consultation services, voluntary classes and online resources topping the list.
Unfortunately, Stitch adds, only 14% of employers are including financial education in their benefits budget, while another 22% are considering it.
“We think that education is a tool in a financial wellness program, but it is only one of the tools at an employer’s disposal,” says Derek Cushman, Financial Wellness Solutions Leader with Mercer, the health and retirement benefits consultancy. Advisers, he adds, can play a role in helping employers determine the best way to help their employees get a better handle on their finances.
Four areas where employees are struggling and advisers can help are:
- How to manage debts and liabilities
- How to invest and grow financial assets
- How to budget and manage expenses
- How to purchase insurance and protect against potential financial setbacks
While the need varies from employee to employee, Cushman says, all told there’s a great deal that employers can do to help employees improve their finances.
“We think that education is a tool in a financial wellness program, but it is only one of the tools at an employer’s disposal."
Financial education at Bruker
One plan sponsor that is working with an adviser to improve the financial literacy of its employees is Bruker, a maker of scientific research instruments and quality control equipment. Director of Global Benefits and HR Operations, Kelly Shinnick, says the company provides financial consulting services to employees via its benefits broker, Ashton Young.
“They help with the 401(k) advisement as well as the employee advisory services,” says Shinnick. “We want to develop ongoing education and communication regarding retirement and employee financial wellness.”
Ashton Young’s fees are paid out of an ERISA budget attached to Bruker’s 401(k) plan. Four years ago, the program began as a way to boost participation,” explains Shinnick, but the manufacturer now sees it as a resource to help employees plan for retirement.
