The Value of Financial Wellness Programs

shutterstock_636303929_blogA topic we see crop up again and again with our clients is financial wellness programs. We continue to see interest from clients about expanding the services and offerings their participants receive, and more and more vendors are using their participant tools and education to differentiate themselves. We’ve written before about this as a part of our recent overview of participant trends as well as the need to monitor the advice and services available to employees.

When examining these offerings, there are usually two main questions. First, what services are participants currently using? In practice, this is easy to monitor. Often, recordkeepers can run reports on how many participants are taking advantage of their various services, including one-on-one meetings, group education sessions, as well as the myriad of education and tools available on their websites.

The second question is harder to answer. Do participants find these services helpful? At the end of the day, plan sponsors should be putting their limited resources into high impact areas. If a tool is not useful to participants and they do not find it valuable, is it worth spending time and money on?

The Employee Benefit Research Institute (EBRI) recently released a brief called: Perceived Helpfulness of Financial Well-being Programs. In it, EBRI dives into a portion of their annual Retirement Confidence Survey which asked plan participants about:

  • Stress about retirement;
  • Whether they worry about finances at work; and,
  • How they would rate the helpfulness of various financial well-being programs.

The results are enlightening. A majority of workers found that four programs would be either very or somewhat helpful:

  • Help calculating how much to save for retirement (75%);
  • Help calculating spending in retirement (72%);
  • Planning for healthcare expenses in retirement (72%); and,
  • Comprehensive financial planning (68%).

These coincide nicely with some of the most common services we see being offered by recordkeepers.

Other programs were perceived as less helpful, including debt counseling, budgeting help, and student loan debt assistance programs, with fewer than half of respondents calling them very or somewhat helpful.  However, EBRI notes that younger participants tend to find these programs more valuable than older participants, highlighting the importance of knowing your plan demographics.

Plan fiduciaries have the responsibility to monitor and evaluate the services being provided to participants; this should include thoughtfulness regarding plan demographics, usage, and effectiveness.  We will continue to work with clients on this important duty.

Multnomah Group is a registered investment adviser, registered with the Securities and Exchange Commission. Any information contained herein or on Multnomah Group’s website is provided for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.   Investments involve risk and, unless otherwise stated, are not guaranteed.  Multnomah Group does not provide legal or tax advice.  Any views expressed herein are those of the author(s) and not necessarily those of Multnomah Group or Multnomah Group’s clients.

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