Moving Forward on Financial Wellness
Employers, along with the financial professionals who guide them, will continue to play an increasingly important role in helping employees strengthen their financial foundations. Goal setting and prioritization. At OneAmerica, we work with plan sponsors and their advisors to offer a person-based approach to training participants that focuses on the uniqueness of each individual’s trip. The materials cover the basics, advanced topics, and everything in between, allowing individuals to make the most relevant connections.
The encouraging news is that employers understand their important role; According to Bank of America’s 2020 Workplace Benefits Report, 62% of employers feel “extremely” responsible for the financial health of their employees, up from 13% in 2013.
It is also of great importance how committed employers have been to the provision of retirement plans and plan contributions for employees despite the economic pressures of the pandemic.
According to Plan Sponsor Council of America’s November 2020 Snapshot Survey, over 90% were still making their retirement contributions in 2020.
In addition, more than half of the responding plans allowed distributions related to coronavirus, and nearly a third allowed increased plan loan amounts. Half also allowed participants to suspend repayment of existing loans due by December 1, 2020 and defer payments for up to a year.
These critical provisions provided a safety net for many participants, but they also encouraged employers to understand the importance of financial health and the positive effects it has on both individual workers and the company as a whole. Employees who are less stressed about financial, physical, and emotional health are more focused, more present and can contribute to business success. This is a significant concept when you consider data from the PwC Employee Financial Wellness Survey 2021, which shows that nearly two-thirds of full-time employees say their financial stress has increased since the pandemic began; This affects productivity, with 45% of respondents saying finance has been a distraction at work as well as retention, and 72% say they would be attracted to another company that cared more about them financial well-being cares as their current business.
Financial health has also continued to gain ground in legislative terms.
There are many strategic approaches and thoughtful proposals across the industry. For example, our colleagues at the SPARK Institute advocate meaningful changes to federal regulations, as well as legal and regulatory solutions that improve employee financial well-being through policies that support employee participation in retirement while meeting current financial obligations; Integrating student loan repayment solutions into workplace savings plans and advancing emergency savings solutions to address the economic needs and concerns of employees; Improving access to financial wellness programs inside and outside of retirement plans; and expanding workplace austerity programs to include other non-retirement savings priorities.
These and other ongoing efforts will further advance our work, our industry, and ultimately the financial well-being of the American workers we serve. As finance professionals, plan sponsors and industry influencers – we will move forward together.
(Image: alphaspirit / Shutterstock.com)
Sandy McCarthy is President of Pension Plans at OneAmerica.