Financial Wellness Program is Improving Retirement Plan Outcomes
Employees are looking toward implementing financial wellness programs to improve participant outcomes because Americans are woefully under-saving for retirement. Employers are educating workers early and as often as possible. Today, helping your employees to become financially prepared for their post-career years goes way beyond just offering a retirement plan benefit.
We know Americans are woefully under-saving for retirement. It’s a refrain we’ve heard over and over and over again. There is good news around the corner, though. Employees are seeking their employers’ help in the interest of saving more for their retirement future. Employees are, tapping into financial wellness programs with success. Employers are educating workers early and often. Plan sponsors are assisting plan participants and improving retirement readiness.
Before we get to that, here are some statistics to help set the scene, from MarketWatch:
- More than a third of employees say they aren’t doing well financially, including 44% of workers under 40 years old — Bank of America Merrill Lynch Workplace Benefits report.
- By 2035, nearly 20 million retirees are expected to live in or near poverty, and that number will rise to 25 million by 2050.
- A third of non-unionized American workers don’t have access to a 401(k) plan.
- Some states have begun offering employees at private companies access to state-sponsored retirement plans. Workers have saved more than $2 million in Oregon’s plan, OregonSaves, since the pilot rolled out last summer.
Helping your employees to become financially prepared for their post-career years goes beyond simply offering a retirement plan benefit. Citing the B of A Merrill Lynch report, MarketWatch touts the benefits of financial wellness programs. Such programs, can walk employees through setting up their retirement accounts, determine how much of their pay an employee can set aside, and help them figure out how to achieve other money goals as well, such as paying off debt or buying a home. The employers BAML surveyed said that financial wellness leads to higher employee satisfaction and levels of productivity. Workers also like to track their progress, and as such, are comfortable sharing personal and financial information as part of an initial workplace financial wellness assessment.
Employers can also address other concerns, such as student loans, caregiving duties and planning for healthcare and long-term care costs in retirement by reminding employees of these realities and educating them on how to prepare for them. Targeted email campaigns, one-on-one meetings with your plan’s financial advisor, and group lunch and learns are all effective ways to assist employees in figuring out what to do with the information. As with anything, repetition is key, so it is important for employers to understand that educational campaigns must deliver a consistent message, and be ongoing over time. In other words, education offered in a financial wellness program must be ongoing, to achieve results. It should not be a “one and done” affair.
The bottom line: Employees want help planning for retirement and achieving other financial goals. The more employers can get involved and provide a clear roadmap to help them, the happier, more productive and more financially prepared for retirement they’ll be.
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