Plan Sponsors Prioritize Financial Wellness for Employees
With the pandemic affecting employees who may decide to dip into retirement accounts for money to cover potential short-term losses, plan sponsors can play a key role in encouraging financial wellness.
More Plan Sponsors Are Offering Wellness Support
In fact, recent key findings from MassMutual’s Financial Wellness Trend Study reveal that plan sponsors see a large need for employees to focus on their financial health and think it’s important for employers to offer that support. Nine of 10 plan sponsors surveyed agreed that companies offering financial wellness programs demonstrate that they care about their employees. Large majorities also agree that these companies are on the cutting edge of benefits offerings and that these programs are a way to support employees at minimal cost to employers. The study indicated 42% of responding plan sponsors already offer a wellness program, 19% were in the process of implementing such program, and 19% said they planned to implement one.
Based on employer responses, retirement savings, insurance and online retirement planning tools are the top components in financial wellness programs. Employees Seek Guidance on Spending However, contrast these findings to those in PwC’s 9th Annual Employee Financial Wellness Survey, that asked employees what the top cause of their stress is, and half said that finances have been a distraction at work. Employees also said they are seeking guidance on how to prioritize spending, which bills to pay and how to handle creditors. The study also revealed that, 38% of employees overall had less than $1,000 saved for unexpected expenses. Of even greater concern, according to the annual survey on the economic health of U.S. households conducted by the Federal Reserve, 37% of those surveyed indicated they would have trouble covering a $400 expense completely with cash or its equivalent.
Employee Debt Often Prevents Saving
Lack of emergency savings is a common thread in industry studies that ask employees about debt and their ability to save for emergencies and other goals like retirement. In the Employee Benefit Research Institute (EBRI) Annual Retirement Confidence Survey, when asked, seven in 10 said non-mortgage debt has impacted their ability to save for retirement or emergencies. Fast forward to an economy dealing with the fallout of the coronavirus and record numbers of employers having to furlough, layoff or even terminate employees, which leaves workers even more stressed and financially vulnerable. This pandemic has confirmed the tenuous financial situations of many American workers who lack savings to sustain them during this unprecedented crisis.
Recordkeepers Creating Savings Solutions
As things evolve, will a vehicle to encourage emergency savings surface as a new workplace benefit? The likely answer is yes, as companies and organizations want to help their workers with both short- and long-term well-being. Creating new solutions is what some recordkeepers are doing via pilot programs within retirement plans designed to help workers save for retirement and emergencies.
Another little known or used resource is establishing an employee hardship fund, which allows employers and employees to contribute to, and then the employer can distribute money in the form of grants to employees who request one due to a disaster or financial emergency.
Redefining Financial Wellness
While talking about emergency savings seems like an inadequate fix to the larger financial issues plaguing employees right now, those in the benefit and retirement industries seem to agree on one thing—millions of American workers were not prepared for the current situation with adequate savings to carry them through a drop in income. It may also change how many plan sponsors define and view financial wellness.
Talk to Your Retirement Plan Solutions Team
At Mariner Wealth Advisors, our retirement plan solutions team is here to advise plan sponsors on educational tools and resources they can offer their employees to promote financial well-being.
“Emergency Savings: The Next Workplace Benefit,” InvestmentNews
“Illuminating a Hidden Safety Net: Lessons from Research into Employee Hardship Funds,” aspeninstitute.org
This article is limited to the dissemination of general information pertaining to Mariner Wealth Advisors’ investment advisory services and general economic market conditions. The views expressed are for commentary purposes only and do not take into account any individual personal, financial, or tax considerations. As such, the information contained herein is not intended to be personal legal, investment or tax advice or a solicitation to buy or sell any security or engage in a particular investment strategy. Nothing herein should be relied upon as such, and there is no guarantee that any claims made will come to pass. Any opinions and forecasts contained herein are based on information and sources of information deemed to be reliable, but Mariner Wealth Advisors does not warrant the accuracy of the information that this opinion and forecast is based upon. You should note that the materials are provided “as is” without any express or implied warranties. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.
Mariner Wealth Advisors (“MWA”), is an SEC registered investment adviser with its principal place of business in the State of Kansas. Registration of an investment adviser does not imply a certain level of skill or training. MWA is in compliance with the current notice filing requirements imposed upon registered investment advisers by those states in which MWA maintains clients. MWA may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. Any subsequent, direct communication by MWA with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For additional information about MWA, including fees and services, please contact MWA or refer to the Investment Adviser Public Disclosure website. Please read the disclosure statement carefully before you invest or send money.