More Employers Are Offering Financial Wellness Programs This Year

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Defined contribution (DC) plan sponsors wear many hats within their organizations, often juggling responsibilities like employee satisfaction, benefits and of course, the management and oversight of their firm’s 401(k) plan. Many are now adding employee financial wellness to the list, as employee happiness and reduced stress both in and out of the workplace are proven to increase the quality and quantity of deliverables and output. A recent report from PwC found that 25% of employees admit that stress from financial issues has been a distraction at work and 18% indicate financial stress has impacted their productivity.* Financial wellness offerings give plan sponsors an impactful way to share financial guidance with their workforces in an attempt to diminish financial stressors.

This year, significantly more plan sponsors are incorporating financial wellness offerings into their benefits programs (21% up from just 16% in 2017.) This increase is being driven by companies in the Small-Mid plan size segment ($5M to less than $100M in plan assets), where 30% of plans are now offering these types of programs.

Participant education and retirement readiness are top-of-mind for plan sponsors, who are increasingly turning to financial wellness programs as a viable means of boosting employee engagement. Enthusiasm for these initiatives is contagious, with over one-third of all plans likely to consider offering a financial wellness program in the future. When asked why they don’t currently have a financial wellness program, being too costly to implement (26%) and too time-consuming to implement (21%) are the top two reasons cited by plan sponsors.

In addition, counter to the increasing demand in the industry, significantly more plan sponsors report that their financial advisor or consultant doesn’t recommend wellness programs compared with a year ago. Seventeen percent of Large-Mega plan sponsors cite this reason for not implementing financial wellness programs, suggesting that advisors and consultants could act as a roadblock in the adoption of these programs by their larger clients.

As financial wellness programs become an increasingly important part of the overall employee benefits package, plan sponsors will seek out the plan providers who can make the programs the easiest to implement.   At the end of the day, the healthiest workforce is not only great for employee morale but also a boon for business.

For more on the aspects leading plan sponsors consider when switching or choosing a new plan provider, review an overview of our latest Retirement Planscape report.

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* PwC. Employee Financial Wellness Survey. May 2018. Web. 

 

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Sonia Sharigian

About Sonia Sharigian

Sonia is a product director for Cogent Reports with more than 10 years of experience in journalism, marketing and research. She has managed numerous qualitative and quantitative studies in financial services industry research, as well as the hospitality, consumer packaged goods and retail sectors. Prior to Market Strategies, Sonia served as a community manager for Communispace Corporation, where she helped major brands generate game-changing insights via online communities. She also worked as a public relations specialist for Putnam Investments and as a staff reporter for Community Newspaper Company. Sonia earned an MBA from Boston University School of Management and a bachelor’s degree in communications from Simmons College. She is an ardent Patriots fan who recently became hooked on sprint triathlons.

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