Financial Wellness Programs are becoming a Priority for Plan Sponsors in general. Financial wellness is even more of a priority for large plan sponsors. According to a recent MassMutual Financial Wellness Trends Study, cited in BenefitsPro, 42% of employers offer one or more financial wellness benefits, 19% have begun implementation of a new program, and nearly 20% plan to introduce a financial wellness program within the next three years.
Providing a financial wellness program is critical to improving retirement plan outcomes. Do you know what your priorities are for your financial wellness program? Does your plan advisor, if you have one? According to the BenefitsPro article, penned by Kris Alban, executive vice president of iGrad, a fintech company that provides intelligence-powered financial wellness solutions, plan sponsors typically want the following from their plan advisor when it comes to financial wellness: a successful track record of working with other companies of similar size and type, and a history of longstanding client relationships. Another way to gauge what participants want and need is by conducting a financial wellness survey.
When plan sponsors consider a financial wellness program, they typically prioritize the following five features:
- Customization: Plan sponsors generally have plan goals related to employee demographics, company mission, retention, and plan participation goals. However, the only way a financial wellness program can meet the individual needs of all employees is to offer a highly customizable version designed to reach them all, regardless of their demographic and level within the company. Incidentally, the ability to have that degree of customization in a financial wellness program is much more appealing to the majority of plan sponsors.
- Integration: While a holistic benefits program that includes financial wellness tends to deliver the best results, most plan sponsors don’t have that high a level of integration. According to a Charles Schwab study, 60% of employers believe that helping employees take control of their financial wellbeing and manage their money better comes from integrating financial wellness with existing benefits. That said, only 46% of employers communicate that financial wellness is available and 30% encourage participation, but just 24% have true integration. Integration includes elements like a single sign-on where employees can access their benefits all in one place, the ability to track data and trends across platforms, and employee incentives that span across multiple benefits.
- Results: Plan sponsors want financial wellness programs that move the needle; that is, that deliver effective, positive results. These may include behavior changes like adequate emergency savings or fewer payday loans, as well as high engagement and satisfaction rates. Plan sponsors should ask advisors to present financial wellness programs with behavioral change data that aligns with these goals.
- A holistic approach: Financial wellness programs should address every aspect of a participant’s life while offering support for:
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- personal budgeting
- building credit
- reducing debt (including student loan repayment)
- emergency and long-term savings strategies
- spending attitudes and behaviors
- financial goal setting
- understanding financial implications of their health plan choice
- handling a financial crisis
Holistic financial wellness programs aren’t just more far-reaching, they also impart helpful financial management skills employees can draw on for life.
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- Established track record: The financial wellness program service provider should be stable and profitable. Plan sponsors must invest significant resources into financial wellness programs, so it’s important the provider be around for the long term and be able to survive an economic downturn.
If you’re a plan sponsor who’s thinking about implementing or enhancing a financial wellness program, talk to your plan advisor (if applicable) about ensuring these five features are integrated into your program to increase its effectiveness and chance of success.
