Financial Wellness Efforts Drive Increase in Retirement Plan Assets – InsuranceNewsNet

Financial education programs prove beneficial to both employees and employers.

A growing number of employers are offering financial wellness programs to their employees as they seek to improve overall worker satisfaction, reduce financial stress, increase productivity, and make improvements to pension plans and other employee benefit programs.

In a recent webinar hosted by the Employee Benefits Research Institute (EBRI), several industry leaders shared information on how workers are using and benefiting from these programs and practical approaches to improve their use and impact.

Effects of financial programs

One of the leaders was Lori Lucas, President and CEO of EBRI. Lucas unveiled EBRI’s first study that examines empirical data, which shows how financial wellness initiatives can impact workers’ use of their 401(k) plans.

According to Lucas, much of EBRI’s research is based on information contained in the organization’s interconnected participant-level databases, including 11 million HSAs, 2 million flexible spending accounts, 20 million IRA account holders and 27 million participants in more than 100,000,401 employer-sponsored. (k) projects.

The research takes a phased approach, Lucas added. Phase 1 incorporates the use of financial wellness webinars in 2018, with 401(k) data from 2017, 2018, and 2019. Future phases will focus on other types of financial wellness programs, including emergency savings funds, student debt assistance, and financial coaching.

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According to the study, for workers in the 45+ cohort, regardless of their contribution level:

  • The higher the assets, the more likely they were to attend webinars.
  • The older the people in this cohort, the more likely they were to attend a webinar on Social Security or Retirement Costs.

For workers in the under-45 cohort:

  • The older their age, the more likely they were to attend an estate planning webinar, regardless of their level of contribution.
  • Higher loan balances were negatively related to participation in estate planning, health care choices, investments, and Social Security webinars for those who contributed at levels above the median.

Here is a brief summary of the survey results, according to Lucas:

  • The likelihood of using financial wellness webinars varies by participant characteristics across age and 401(k) contribution level cohorts.
  • The estimated impact of attending a financial wellness webinar increased employee contributions between $649 and $988, depending on the cohort.
  • Attendance at a budgeting webinar had a statistically significant impact on employee (401)k contribution levels for all cohorts examined.
  • Attending an emergency fund webinar had an impact on reducing new loans for older employees, while HSA webinars had the opposite impact for younger employees.
  • Attending investment webinars “improves” asset allocation for older employees with lower contributions.

‘Where they are’

Kathleen Floyd, senior vice president, education and welfare, of the Church Pension Group, a financial services organization serving the Episcopal Church, was another senior executive featured during the webinar.

The mission statement of the organization’s Education and Wellness Initiative is to inform, engage and inspire all serving and retired clergy and lay employees of the Church Pension Fund Clergy Pension Plan and their spouses through education and wellness resources that support lifelong learning.

The organization’s core data points include information on 403(b) participation, 403(b) loans, lay employee retirement readiness, and participants’ financial frailty and financial literacy.

Among the lessons the organization has learned so far? In 2021, there was a 7% increase in participation in 403(b) plans and 22% of participants increased their funding. In 2020, 403(b) plan loans were 7.3% for lay employees and 4.3% for clergy. This is lower than the national average of 15.2%.

The organization is undertaking several initiatives to engage employees in increasing their participation in financial wellness initiatives, Floyd added. For example, he:

–Offers podcasts.
–Webinar hosts.
–Provides online and in-person learning programs.
–Organize a conference on wellness planning.

The organization still has a long way to go to increase employee use of financial wellness initiatives, according to Floyd, but tracking employee behavior helps it determine next steps.
For many employees, Floyd added, a major barrier to using financial wellness programs is a lack of time.

To address this issue, the organization sends session recordings to registered attendees so they can access the information at their convenience. “We try to reach them where they are,” she said.

To improve employee use of financial wellness programs, companies should personalize their programs as much as possible, follow up after events, and work with affinity groups.

Ayo Mseka has over 30 years of experience reporting on the financial services industry. She was previously editor of NAIFA’s Advisor Today magazine. Contact her at [email protected]


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