Financial Wellness Programs Gain Momentum with Employers

Employers are increasingly determining that financial wellness programs can help provide better financial outcomes for employees, promote higher utilization of employer-sponsored retirement programs, and lead to productivity gains from reduced financial stress, Charles Schwab says in a new report.

Based on a survey of 302 corporate executives, the report states that 52% of respondents said they have implemented or are considering implementing a program as part of a comprehensive benefits package. In addition, as financial wellness programs continue to increase in popularity, 44% believe a program is becoming a “must have” benefit in order for them to be a “competitive employer.”

In support of these findings, a separate participant survey conducted by Schwab Retirement Plan Services found that 85% of employees said they would use a financial wellness program if one were offered. Moreover, 70% of participants indicated they would like personalized investment advice on 401(k) decisions.

Schwab’s report notes that there continues to be a lack of consensus around what constitutes an employer-sponsored financial wellness program. The survey asked employers to rank 23 program elements as to the level of importance, and while all were seen as necessary, a majority of employers believe that a high-quality program should:

  • offer broad guidance on personal financial management principles, including goals-based planning, savings fundamentals, debt management and asset allocation;
  • provide an online content portal for access to education and assessment tools;
  • fully integrate with existing benefits and compensation packages; and
  • demonstrate a measurable impact on retirement plan usage and retirement readiness.

Almost 60% of employers said they believe the best way to structure financial wellness programs is to integrate the offering with the rest of the employee benefits package. While 37% of employers expressed concern over the potential cost, the report notes that many of the features overlap with those already used by employers.

The key takeaways from the report appear to be that employers are increasingly recognizing that employees want more help and guidance on a wide range of retirement decisions, and that supporting the concept of financial wellness can be viewed as a way of enhancing the suite of benefits that employers already offer.

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