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Employer Financial Wellness Programs Expected to Double

Practice Management
As concern about workers’ personal finances grows, the number of employers that offer workplace financial wellness programs is expected to nearly double in the next few years, according to new research.
 
MassMutual’s Financial Wellness Trend Study finds that 42% of employers currently offer financial wellness programs, while 19% of employers are in the process of implementing programs and another 19% say they plan to introduce a program within the next three years.
 
Overall, 86% of employers characterize financial wellness programs as “important.” Not surprisingly, the study finds that the bigger the employer, the greater the perceived importance, ranging from 72% of smaller employers (fewer than 25 workers) that consider such programs important to 94% of larger firms (1,000 or more workers).
 
The chief motivation for implementing a financial wellness program, 90% of employers report, is that they “really care about their employees.” Eight in 10 employers also say that the opportunity to support employees at a minimal cost while being on the “cutting edge of benefit offerings” and gaining an advantage in hiring talent were also contributing factors.
 
“Financial wellness has become a huge priority for employers across the country as Americans struggle with managing a wide variety of financial issues from paying down credit card debt and handling emergency medical expenses to saving for retirement and planning for long-term care,” says Una Morabito, MassMutual’s Head of Client Management.
 
Success at Work
 
When asked what an effective financial wellness program should encompass, nearly half of employers (47%) said it should address an employee’s full financial picture. Others pointed to combinations of retirement, insurance, education benefits and advice, according to the findings.
 
Of the firms that currently offer a financial wellness program, 78% report that their program is “extremely or very” successful. Factors for determining success included employee feedback, participation in programs, employee metrics and retention.
 
The most popular components were:
 
  • retirement savings vehicles (90%);
  • online retirement or financial planning tools (both 86%);
  • protection products such as life, disability and medical insurance (82%);
  • access to a financial advisor for financial planning (77%); and
  • one-on-one meetings with a financial advisor for retirement planning (76%).
When asked what is the most successful at helping employees with financial wellness, 43% of employers point to communications, including from human resources (26%) or upper management (17%). Nearly a third (32%) say financial rewards, including discounts, cash awards and free credit reports also drive participation.
 
Interestingly, while many employers point to online financial planning tools as essential for an effective program, many were dissatisfied with their current tools. Nearly 2 in 10 (18%) of employers said online tools were the least successful component of their program.
 
Holistic Solutions
 
Employers were also asked to react to a description of a holistic financial planning tool that would enable employees to load information about their personal financial situation—including income, expenses, debt, retirement savings and insurance—as well as their goals. The tool would then use the information to help employees prioritize their goals and provide simple, concrete steps to realize them. Most employers (58%) report wanting to offer the tool and characterize it as useful.
 
“Financial wellness need not be expensive for either employers or employees,” Morabito further notes. “Working with the right provider, effective tools and education, and a mix of voluntary benefits designed to meet a wide variety of needs can make all the difference.”
 
The online survey was conducted by Greenwald & Associates on behalf of MassMutual from Aug. 21, 2019 through Sept. 3, 2019, among 863 employers that sponsor retirement savings plans with assets of between $1 million and $75 million. All respondents had some decision-making responsibility for either their retirement plan or financial wellness program.