Survey: Large Employers Lead the Way on Financial Wellness
For an increasing number of Americans, work is not just the place where they go to earn money to support themselves, it’s where they also expect to learn how much of that income should be saved for retirement. And according to a new Bank of America Merrill Lynch survey
, a growing number of employers are trying to help.
The benefits landscape is changing dramatically, the report says, and both employers and workers are expecting more financial guidance than they got in the DB era. Among the large firms surveyed in the report, 97% report feeling at least somewhat responsible for helping their employees attain financial wellness, and 90% believe that individualized financial wellness programs will become a standard benefit in the next decade.
“It is becoming clear that employers’ messages can no longer focus only on enrolling and participating in a 401(k) plan,” the report’s conclusion says. “Employers can engage their employees with a more holistic approach, promoting financial wellness based on each individual’s life priorities. That effort will require a workplace financial solutions curriculum that is targeted to employees of different generations, life stages, wealth and financial literacy.”
The report suggests that employers and plan providers give employees clear action plans on how to budget, not just for retirement, but for all of life’s unexpected events that might happen along the way. More firms seem to be following that advice; 48% of large firms now have a financial wellness strategy available to employees, up from 35% just two years ago. An additional 19% of firms plan to add a program by 2017. Mid-size and smaller firms report lower levels of engagement, but the total number of firms with a wellness strategy has increased to 24%, up from 20% in 2013.
Employers are also expecting automatic features to continue their rise in popularity, with 57% of firms saying they expect that 401(k) plans in 2025 will look much like pension plans do today, with companies making savings and investment decisions on employees’ behalf.
David Tyrie, Bank of America Merrill Lynch’s Head of Retirement and Personal Wealth Solutions, says that large employees are “the incubators of benefits innovation,” and his company’s report backs that up. The number of large firms offering guidance on a host of benefit-related issues significantly beats the total-employer average, from those offering advice on how to plan for health care costs (64% of large firms do, compared to 42% overall), to budgeting (40% to 18%), debt management (43% to 18%), and college savings planning (38% to 15%).
The survey was conducted by Boston Research Technologies, which interviewed 1,020 employers over two months in the fall of 2014.