401(k) Plans Contribute to Financial Wellness
The Corporate Compensation and Benefits staff is responsible for the oversight of a variety of company benefits and at many firms, where Financial Wellness programs have become the newest benefit garnering attention. The company which fails to recognize and give consideration to the financial well-being of their workforce is making a strategic mistake. Tina Wilson, Senior Vice President of Investment Solutions Innovation, at MassMutual conducted original research and discovered employees think about Financial Wellness in two ways – One was the fact that Wellness matters – it is clearly something that employees do think about. However; the second way people think about Wellness was more troubling: Two out of every five employees said they are uncertain about whether they are on track to retire comfortably, and that personal financial issues have distracted them at work.
Why Financial Wellness Matters
If two out of five employees feel distracted at work over Wellness issues, then Wellness matters to both employers and employees. Helping employees achieve financial wellness can come in many forms – but the topic of Financial Wellness needs to be on the radar of every Compensation and Benefits Specialist. Employers who do the right thing for their workforce, by measuring and promoting financial well-being will reduce employee stress and reduce distractions of the employee in the workplace. This will, in turn, contribute to increased worker productivity and employee loyalty.
Prudential has published FINANCIAL WELLNESS: THE NEXT FRONTIER IN WELLNESS PROGRAMS – Why It Matters to Employers and Employees, and the New Way to Measure It Effectively. Within that research report it is stated that “Seven in 10 human resources professionals indicate that personal financial challenges have an impact on their employees’ performance.”
Employers are well-positioned to assist in alleviating employees’ financial stress since they can support employees in a variety of ways, including: worksheets, calculators, education, and communications.
401(k) Plans are a Good Fit with Financial Wellness
Offering and promoting a company 401(k) Retirement Plan goes a long way in supporting Financial Wellness through a benefit that grows tax-deferred, uses the wonders of compounding and actively keeps the benefit (and account balance) front and center among an entire workforce via communications and reporting. The 401(k) Plan is one of the best tools available to an employer in supporting and promoting Financial Wellness for all employees.
