Financial Wellness Programs: An Essential Benefit For Employees and Employers

BY: RYAN BARNETT

Vice President, Retirement Services
(405) 608-8007

In my role as vice president of retirement services for Heritage Retirement Plan Advisors, I have the pleasure of speaking with employers and employees about saving for retirement and financial wellness. The benefit to employees is obvious: more financial security and less anxiety. The benefits to employers are less obvious, but just as important, because if employees’ money problems are not addressed, it can lead to higher health care costs, absenteeism and lack of productivity.

Financial wellness can be achieved through good financial decisions based on a basic education in personal financial management. Unfortunately, many people lack this understanding.

When I meet with people, the three most common problems I find are 1) debt management, 2) budgeting and 3) savings. The result is lost efficiency and absenteeism – both of which impact employers’ bottom line. In addition, financial stress can undermine an employee’s ability to complete projects efficiently.

That’s why many organizations are now seeing the ROI of financial wellness programs that go beyond understanding traditional 401(k)s to offering support, information and training that address a broad range of employee personal finance concerns. And high-touch methods like one-on-one coaching, seminars and phone support are some of the most effective for delivering personal financial education to employees.

Employers are concentrating on finding ways to incorporate financial health into broader initiatives that include physical, emotional and social well-being. These initiatives include helping new-to-the-workforce individuals pay off their student loans and assisting near-retirees with navigating the retirement process – offering tools, resources and educational campaigns designed to help workers gain more solid financial footing.

For example, I had a client who had a large number of employees who were at or nearing retirement age. While salary deferral rates were strong, many of the employees were not financially ready to retire because of several important factors outside of the retirement plan, such as outstanding loans, credit card debt and medical expenses.

To help address these concerns, our team created and coordinated a targeted communication plan where wellness coaches sat down and evaluated everyone’s financial issues one-on-one. Then, we developed a customized program for each employee, with definable metrics to measure and monitor improvement.

The key to this program was to look beyond the spreadsheets of participation rates and plan balances, and treat employees with the care and concern normally reserved for close family members. By doing so, we dramatically improved each individual’s situation, which had a direct effect on their emotional and financial well-being.

There is no “one-size-fits-all.” Each employee has unique needs, so employers should provide a program that encompasses a range of options, including basic information about investing and saving, as well as topics like paying off student debt, estimating a family emergency fund and planning for health-care out-of-pocket needs. And it’s never too early or late to evaluate future retirement income savings goals.

The important thing to remember is those who have bad financial habits did not create them overnight, so they cannot be fixed overnight. Taking small steps toward addressing each topic will help avoid employees feeling overwhelmed. I enjoy the fiduciary responsibility and opportunity of working with employers to establish a tailored plan that allows employees to create healthy habits which will reduce financial stress and ultimately increase the bottom line – for everyone.