Increasingly, employers are recognizing the importance of providing financial wellness programming in tandem with benefits like the company sponsored 401k. With surveys continuing to point to the importance of financial literacy for all, it’s great to know that retirement industry professionals are also supporting programming to help young people get a jump start.
Financial Stress Impacts Performance
Making financial education services part of company sponsored benefit programming makes so much sense–and not just for employees: when workers bring financial stress to the job, the business is impacted too. As Voya Investment Management sums up, financial stress affects everyone:
- Our research shows that money problems account for 59% of employees’ stress in the workplace, which can affect their mental and physical well-being and their performance at work.
- Financial stress can cause a delayed retirement. Over half of the financially stressed employees we surveyed plan to postpone their retirement—at an average cost to an employer of $51,000 per employee. Delayed retirement can also mean delayed career trajectories for newer workers.
- Financial wellness programs help with employee retention. According to our research, workers generally view their employers as a trusted source. That creates an opportunity for sponsors to retain employees by offering support in key areas, including improving overall financial wellness and retirement income planning.
As financial wellness has increasingly become an interest of both employees and employers, Voya suggests that plan sponsors hone in on these five focus areas for programming:
- Financial Decision-making
- Retirement Education
- Investment Education
- Emergency Savings
- Student Loan Payment Support
Closely related to bringing financial literacy skill building into the work day is improving cybersecurity practices, especially related to retirement plan access, given the risks to hard earned savings. The Plan Sponsor Council of America has found that half of survey respondents are indeed implementing cybersecurity awareness campaigns and increasing related communications to employees.
Nice To Know: Financial Literacy for K-12 Students
In honor of Financial Literacy Month, the Society of Professional Asset Managers and Recordkeepers (SPARK) is supporting financial literacy curriculum efforts for students from kindergarten through high school:
“Our goal is to level the playing field by bringing structured, high-quality financial education into schools,” said Snezana Zlatar, co-chair of SPARK’s financial literacy committee….“Financial literacy should not be a privilege passed down through wealth—it should be a fundamental part of every student’s education.” In a recent study, “Financial and Retirement Literacy Among Students and Recent Hires,” conducted with Corporate Insight Inc., SPARK found that younger generations have low literacy aptitude rates. For example, most respondents did not demonstrate a basic understanding of inflation and did not correctly answer a question about the difference between a stock and a mutual fund. Many of those surveyed also could not identify a 401(k) as a type of employer-sponsored retirement plan, including 42% of recent hires. Many also showed a lack of urgency to save for retirement, as, on average, respondents thought that 30 was the proper age to start saving.
More information about Financial Literacy Month overall is available at Jump$tart, a hub for “events and initiatives to promote the importance of financial literacy and the need for effective financial education.”
Sponsoring A Retirement Plan?
Wonderful! As retirement plan sponsors, we make a substantial difference in the lives of employees–and their beneficiaries. It’s also true that despite diligence, unforeseen challenges can arise, and even seemingly small oversights are known to trigger costly investigations, audits and even lawsuits. The average ERISA claim costs businesses over $1.2 million in legal fees.
You don’t have to shoulder all your risks alone, though: Colonial Surety Company makes Fiduciary Liability Insurance affordable for every plan sponsor. With this protection, for a few dollars a day, you’ll have coverage for defense costs and penalty limits up to $1,000,000 if faced with alleged or actual breaches of duty in connection with the employee retirement plan. Cyber Liability coverage is included at no extra cost, providing additional protection against regulatory actions related to data and privacy, as well as expert response services in the event of a cybersecurity breach. You can easily add our Fiduciary+ Cyber Liability Insurance to your ERISA Bond in minutes, today:
Add on Fiduciary+ Cyber Insurance Here
Colonial Surety was founded in 1930 and continues giving customers the assurance that they, their businesses, and their clients are safeguarded with the right surety and insurance products at all times. We are a direct and digital insurer offering products through an online platform supported with exemplary customer service. We give customers a simple, direct, and instant service that takes the pain out of buying insurance and bonds. Colonial Surety is licensed in every state in the U.S., rated “A” Excellent by A.M. Best, and listed by the U.S. Treasury as an approved surety.