Financial wellness programs are a priority for plan sponsors
Financial wellness programs are becoming a priority for plan sponsors in general. Financial well-being is even more of a priority for large plan sponsors. According to a recent MassMutual Financial Wellness Trends study, cited in Pro Advantages, 42% of employers offer one or more financial wellness benefits, 19% have started implementing a new program and almost 20% plan to introduce a financial wellness program within the next three years .
Providing a financial wellness program is essential to improving pension plan outcomes. Do you know what your priorities are for your financial wellness program? Is your diet advisor, if you have one? According to the BenefitsPro article, written by Kris Alban, executive vice president of iGrad, a financial technology company that provides information financial wellness solutions, plan sponsors typically expect their plan advisor to achieve the following in financial well-being: a successful experience working with other companies of similar size and type, and a long history of customer relationships. Another way to assess what participants want and need is to conduct a financial wellness survey.
When plan sponsors consider a financial wellness program, they typically prioritize the following five characteristics:
- Personalization: Plan sponsors typically have plan goals related to employee demographics, company mission, retention, and plan membership goals. However, the only way for a financial wellness program to meet the individual needs of all employees is to offer a highly customizable version designed to reach them all, regardless of their demographic profile and level within the organization. company. Incidentally, the ability to have this degree of personalization in a financial wellness program is much more appealing to the majority of plan sponsors.
- Integration: While a holistic benefits program that includes financial well-being tends to produce the best results, most plan sponsors do not have such a high level of integration. According to a study by Charles Schwab, 60% of employers believe that helping employees take control of their financial well-being and better manage their money means integrating financial well-being with existing benefits. That said, only 46% of employers indicate that financial wellness is available and 30% encourage participation, but only 24% have true onboarding. The integration includes things like single sign-on where employees can access their benefits in one place, the ability to track data and trends across all platforms, and employee incentives that span across multiple platforms. benefits.
- Results: Plan sponsors want financial wellness programs that make a difference; that is, which produce effective and positive results. These can include behavioral changes like adequate emergency savings or less payday loans, as well as high engagement and satisfaction rates. Plan sponsors should ask counselors to present financial wellness programs with behavior change data that aligns with those goals.
- A holistic approach: Financial wellness programs should address all aspects of a participant’s life while providing support for:
- personal budget
- reduce debt (including student loan repayments)
- emergency and long-term savings strategies
- spending attitudes and behaviors
- setting financial goals
- understand the financial implications of their choice of health plan
- manage a financial crisis
Holistic financial wellness programs are not only more ambitious, they also equip employees with useful financial management skills that they can rely on for life.
- Established track record: The financial wellness program service provider must be stable and profitable. Plan sponsors must invest significant resources in financial wellness programs, so it is important that the provider is present for the long term and can survive an economic downturn.
If you are a plan sponsor who is considering implementing or improving a financial wellness program, ask your plan advisor (if applicable) to ensure that these five features are built into your plan to increase its effectiveness and its chances of success.
Steff C. Chalk is Executive Director of The Retirement Advisor University, a collaboration with UCLA Anderson School of Management Executive Education. Steff is also executive director of The Plan Sponsor University and is currently a professor at The Retirement Adviser University.