Employers, along with the financial professionals that guide them, will continue to play an increasingly greater role in helping employees strengthen their financial foundations, through a variety of avenues including robust plan design and holistic financial wellness education resources that motivate and guide decision-making, goal setting and prioritization. At OneAmerica, we work with plan sponsors and their advisors to offer a persona-based approach to participant education that focuses on the uniqueness of each individual’s journey. Materials cover the basics, advanced topics and everything in between, and allow individuals to make the most relevant connections.
The promising news is that employers understand the important role they play; 62% of employers feel “extremely” responsible for their employees’ financial wellness, up significantly from 13% in 2013, according to Bank of America’s 2020 Workplace Benefits Report.
Also, of great significance is how employers remained committed to providing retirement plans and plan contributions for employees, despite the economic strains of the pandemic.
More than 90% still made their retirement plan contributions in 2020, according to the Plan Sponsor Council of America’s November 2020 snapshot survey.
Additionally, more than half of the responding plans allowed Coronavirus-related distributions, and nearly a third allowed increased plan loan amounts. Half also allowed participants to pause the paydown of existing loans that were due through Dec.1, 2020, and defer payments for up to a year.
These critical provisions were a safety net for many participants, but also reinforce that employers understand the importance of financial wellness and the positive impact it has on both individual workers and business as a whole. Employees who are less stressed about financial, physical and emotional health are more focused, present and able to contribute to business success. This is a significant concept, considering data from the 2021 PwC Employee Financial Wellness Survey, showing that nearly two-thirds of full-time employees say their financial stress has increased since the start of the pandemic; this has an impact on productivity, with 45% saying finances have been a distraction at work, as well as retention, with 72% indicating they would be attracted to another company that cares more about their financial well-being than their current company.
Financial wellness has also continued to gain ground legislatively.
There are many strategic approaches and thoughtful suggestions being put forth by the industry as a whole. Our colleagues at the SPARK Institute, for example, are advocating for sensible changes to federal rules and legislative and regulatory solutions that improve employees’ financial wellness through policies that support an employee’s participation in retirement planning while also meeting current financial obligations; integrate student loan repayment solutions into workplace savings plans and advance emergency savings solutions to address the economic needs and concerns of employees; enhance access to financial wellness programs inside and outside of retirement savings plans; and expand workplace savings programs to include other non-retirement savings priorities.
These, and other efforts in place, will continue to advance our work, our industry, and ultimately, the financial wellness of the American workers we serve. As financial professionals, plan sponsors and industry influencers — we’ll move forward together.
(Image: alphaspirit/Shutterstock.com)
Sandy McCarthy is president of retirement services at OneAmerica.