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What to Expect From Your Company’s Financial Wellness Plan
Joanne Cleaver
17 September 2015

Are you distracted at work by personal finance worries, like getting a credit card payment in the mail on time, or wondering if you should review your retirement plan with an expert?

You’ve got plenty of company. Twenty-four percent of employees report that their own finances drain their workdays of attention, according to a 2014 PwC survey of employees whose employers offer such plans.

That partly explains why a financial wellness program is probably coming to your workplace, if it isn’t already there.

Typically comprised of financial planning diagnostics, information and, often, employer-subsidized time with a financial planner or coach, workplace wellness plans are taking off. A new Aon Hewitt survey predicts that 93 percent of U.S. employers expect to create or expand financial wellness efforts this year, and 67 percent of employers intend to communicate with employees about the physical health ramifications of financial stress. Here’s what you might soon encounter at work and the latest in how to make the most of financial wellness plans.

The definition of “wellness” is evolving. It used to be that “financial wellness” was mainly about managing credit and debt wisely; saving for retirement and other big goals, and actually reading your benefits statements.

Now, employers are merging in a much broader array of topics in a more holistic approach, says Kim Davis, senior vice president of human resources for NFP, an Austin-based employee benefits and insurance brokerage firm.

Raises, for example, are forecast to be in the range of 3 percent to 4 percent, but higher-level staff and star performers are likely to be granted profit-sharing, Davis says, as compensation finally gets back to where it was before the recession.

Those lucky employees will need additional guidance in how to invest and manage those funds, especially if the bonuses are in the form of stock options, company shares or other hard-to-value perks.

Relevant to all employees, some wellness plans are incorporating projections about Social Security income into retirement planning, Davis says.

In fact, retirement transition is morphing into a lifestyle and financial management process. “There’s more conversation about using long-tenured older workers who potentially could go into part-time work and continue to contribute, with their income and benefits also affecting their retirement income,” Davis says. A well-structured wellness plan will take into account a wide array of income streams, work preferences and transitions, not just the traditional exit path.

Taking cues from physical wellness programs. Financial wellness programs appear to be taking cues from their predecessors, workplace health and wellness programs, and that might mean you get a financial planner or coach.

Health wellness programs lost momentum when they consisted only of education. It also takes accountability and relationships to motivate people to adopt new habits, says Thomas Ruggie, president of Ruggie Wealth Management in Tavares, Florida.

“Employee education hasn’t worked” in a vacuum, he says. “You can have slick brochures and a slick website and send out emails, but the relevancy is poor. What moves the dial is providing a dedicated person.”

Financial planners are eager to work with employers to gain access to planner-free employees, but employees don’t necessarily return the sentiment. The PwC survey of employees in financial wellness programs found that only 7 percent regarded a personal financial planner as essential to achieving their financial goals.

That’s where the parallel with health and wellness programs is guiding some employers’ expectations. Just as someone might be motivated to diet in advance of a milestone event, such as a class reunion, and only then turn to the workplace wellness program for help, operators of financial wellness plans are realizing that a major life event is likely to prompt many people to act on their financial goals. High-stakes events such as weddings, the death of a parent or looming college enrollment often catalyze action, advisors say.

“Employers and plan managers now realize that just because people don’t get on board immediately doesn’t mean they won’t soon,” Ruggie says. “The big difference is knowing that the wellness resources are top of mind when a triggering event happens. If I’m talking with you every three or four months, and I’m your financial coach, when it’s time for you to do something, you’ll reach out to us.”

The financial planner or coach offered to you could be in person or via call center, says Bob Harris, assistant vice president of advisor education and training with Waddell & Reed in Overland Park, Kansas. Some employers cover the entire cost of the advisory sessions, and others cover part of it. “Be sure that you understand how much the financial advisor is going to cost you. There’s probably going to be an organizational discount,” Harris says.

Virtual reality experiences are intended to yield real-life insights. Games, interactive websites and apps are the latest channel for drawing employees into the world of financial choices and consequences, Davis says. Inviting employees into a virtual world where they start and run a small business, for instance, “gives people a chance to understand financial management and takes away the stigma of realizing that you’re not in a good financial place, which is embarrassing,” she says.

Experts agree that games are all well and good, but they aren’t very helpful until they translate virtual situations to all-too-real reality. Before spending time in a virtual financial maze or competition with co-workers, bone up on what you need to learn so you’re backfilling gaps; for instance, if you struggle with investing basics, choose a role that lets you direct a portfolio in the game.

And it’s still on you to apply what you learn in the game with the variables in your real portfolio and plan, Ruggie says.