Financial Wellness Benefits Are on the Rise

If you include personal finance and debt-reduction education as part of a broader wellness benefit for your employees, you’re in good company.

Though the question of retirement has long dominated financial wellness thinking in the corporate world, two new studies in 2017 reveal other considerations coming into prominence. And more companies than ever are adding broader financial wellness programs to their benefits packages.

Educating More Employees on Debt Reduction and Emergency Savings

The National Business Group on Health (NBGH) partnered with Fidelity Investments for their eighth annual survey on Health and Well-being and discovered the share of companies offering some form of financial security program to educate workers about debt has risen from 76% in 2016 to 84% today. And nearly three-quarters of those surveyed said they’re using employee incentives to drive engagement with wellness programs and offering more 14% more payout this year than last.

Certain programs continue to have longstanding popularity, but there are also some new and rising approaches to financial wellness. Here are some of the benefits companies expect to offer this year:

  • Lunch and Learn seminars: 82%
  • Tools for learning about mortgages, wills and income protection: 74%
  • Training around saving for emergencies, debt management and budgeting: 71%
  • Student loan counseling or repayment assistance: 25%

Most Employers Focused on Integrating Health and Wealth, Expanding Scope of Wellness Beyond Retirement

The NBGH trends match the latest edition of Aon Hewitt’s Hot Topics in Retirement and Financial Wellbeing report. Some of the key findings about employee financial wellness include:

  • The push to communicate the interrelated benefits of health and wealth continues. Nearly nine in 10 companies indicated they are either very likely or moderately likely to share that concept with workers.

  • Nearly three out of five companies said they’re very likely to focus on aspects of financial wellness in addition to retirement, and another 33% are moderately likely to do so.

  • Nearly half of employers are still settling their financial wellness approaches but are nevertheless already offering “tools, services, and educational campaigns” about financial issues to employees.

  • Fifty-eight percent of those surveyed said they already offer at least one tool addressing a financial wellness topic. That share is expected to grow to 84% by year’s end.

The Majority of Companies Want to Lift Savings Rates in Retirement Plans

Aon’s study also showed employers are widely concerned about their workers’ savings rates in retirement plans. Only 15% said they are comfortable with present rates of investment. Among the high majority who aren’t satisfied with present savings, more than three out of five said they’re very likely to take action this year to drive savings rates up. Some of the measures to accomplish this will include increasing defaults, adjusting contribution escalation provisions and targeting communications to participants.

Employers concerned about how little their teams are contributing to retirement plans also have opinions about what’s causing anemic investment. Ninety percent are dissatisfied with their employees’ “knowledge about how much they need to save” to have an adequate retirement nest egg. And among that group, 87% are taking specific action this year to bolster retirement understanding.

Rising Awareness of These Needs Gives Employees Greater Financial Wellness

As popular as Lunch and Learn events have been with employers, they’ve been only marginally productive for their beneficiaries. That’s obvious when you see how few companies feel comfortable with their workers’ retirement accounts. The good news is that financial experts agree that an employee’s savings rate is the leading indicator for retirement success in the long run. So the more companies educating and encouraging employees to save for emergencies, reduce debt and increase investment, the better.

Education remains the key to successful behavior change and greater financial wellness. Look for a program that emphasizes consistent budgeting, leaving debt behind, and being prepared for emergencies. Employees who have these pieces in place will be far more likely to take advantage of company matches in retirement and to achieve a healthy 15% of their income invested for the future.

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