Fin well sponsor presentation may 2019-web nyc
Download as PPTX, PDF•0 likes•100 views
This document discusses empowering employees with financial wellness programs. It defines financial wellness and outlines the business case for why companies should care about it, including reducing absenteeism and health care costs. The document provides an overview of different types of financial wellness programs and considerations for determining if a company is a good fit and selecting a provider. The goal is to help companies move from intending to implement financial wellness programs to taking action.
Fin well sponsor presentation may 2019-web nyc
- 1. WELLNESS WORKS Empower your employees with financial wellness David Norris – Sr Defined Contribution Consultant T. Rowe Price
- 2. 2 WELLNESS WORKS What is financial wellness? Why should you care about it? Is your company a good candidate for a financial wellness program? Tools and resources that help you put financial wellness into action. Overview
- 3. 3 WELLNESS WORKS Historical objectives of retirement plan education Increase Participation Increase Deferrals Asset Allocation
- 4. 4 WELLNESS WORKS Source: T. Rowe Price Retirement Plan Services, Inc., as of 12/31/17. Innovations to plan design and investments have helped… of participants remain in the plan 94% AUTOMATIC ENROLLMENT
- 5. 5 WELLNESS WORKS Source: T. Rowe Price Retirement Plan Services, Inc., as of 12/31/17. Innovations to plan design and investments have helped… of participants remain in the service when it’s offered on an opt-out basis 67% AUTOMATIC INCREASE
- 6. 6 WELLNESS WORKS Source: T. Rowe Price Retirement Plan Services, Inc., as of 12/31/17. Innovations to plan design and investments have helped… of participants remain in a default fund such as TDF 81% AUTOMATIC INVESTMENT INTO A QDIA
- 7. 7 WELLNESS WORKS …but have not solved the problem completely. avoid dealing with their financial situation 55% expect to run out of money 26% can’t afford to contribute more to their plans 48% Source: T. Rowe Price Retirement Saving and Spending Study (2015).
- 8. 8 WELLNESS WORKS There is opportunity to do more. say they are financially illiterate1 43% of wages go to consumer debt payments2 24% say finances are the largest source of stress in their life3 64% don’t have enough savings to cover a $1,000 emergency4 64% 1S&P Global FinLit Survey 2015. 2U.S. Census Bureau et al. 2014. 3American Psychological Association 2015. 4MarketWatch 2015. Of American adults…
- 9. 9 WELLNESS WORKS Sources: Aon Hewitt 2017 “Hot Topics in Retirement” Study; PSCA’s 59th Annual Survey of Profit Sharing and 401(k) Plans. Good intentions of sponsors said they were focusing on financial wellness in 2017, 92% ALTHOUGH have a program in place 18% ONLY
- 10. 10 WELLNESS WORKS What is financial wellness?
- 11. 11 Why should sponsors focus on financial wellness?
- 12. 12 WELLNESS WORKS Chart is for illustrative purposes only. Sponsor concerns: cost considerations TENURE COST WORKERS’ COMPENSATION PAYROLL HEALTH CARE
- 13. 13 WELLNESS WORKS Strain on worker productivity of HR professionals surveyed say financial problems impact employee performance.1 70% 1Aon Hewitt. 2SHRM, 2014 “Financial Wellness in the Workplace Survey.” of employers believe that offering additional guidance on handling finances will decrease the time employees spend at work tending to financial issues.2 44%
- 14. 14 WELLNESS WORKS 1American Psychological Association, 2015. 2San Diego State University, 2012. Strain on employees—PHYSICALLY Finances are the #1 source of stress for Americans.1 Google searches for STOMACH ULCERS increased during the Great Recession2 228%
- 15. 15 WELLNESS WORKS Finances are the #1 source of stress for Americans. Strain on employees Searches for HEADACHES increased 193%
- 16. 16 WELLNESS WORKS Strain on employees Finances are the #1 source of stress for Americans. Searches for CHEST PAINS increased 35%
- 17. 17 WELLNESS WORKS #1 reason for incorporating financial wellness of plan sponsors said they want to provide some type of financial wellness offering because… 84%
- 18. 18 WELLNESS WORKS Source: Aon Hewitt 2016 “Hot Topics in Retirement” Study. #1 reason for incorporating financial wellness It’s the right thing to do.
- 19. 19 WELLNESS WORKS Financial wellness works for everyone. Employees Financially healthier employees are happier, physically healthier, and more productive, which can translate into greater business success and increased retirement plan contributions. C-suite As health care concerns continue to mount, providing robust financial wellness solutions could empower employees to retire on time. Human Resources A more robust benefits package can add a new “R” to the traditional three: Recruit, Retain, Reward, Retire!
- 20. 20 WELLNESS WORKS Source: Financial Finesse. Data gathered over a 2-year period ending 2012. Less spent on health care for users $2.5MIncrease for nonusers 19.4% Decrease for program users 4.5% Return on investment: reduction in health care costs
- 21. 21 WELLNESS WORKS Source: Financial Finesse, 2012. Return on investment: reduction in absenteeism 10.80 hours 14.79 hours Program Users (Average) Nonusers (Average) fewer absentee hours for users 27%
- 22. 22 WELLNESS WORKS Source: SmartDollar® program users, 2015. Return on investment: reduction in stress and distractions 37% 18% 21% 12% 13% 22% Very Often Distracted Often Distracted Sometimes Distracted FINANCIAL DISTRACTIONS AT WORK FINANCIAL STRESS 20% 29% 34% 5% 12% 33% Overwhelming Stress High Stress Some Stress At start of program 2–5 years later
- 23. 23 WELLNESS WORKS 39% 9% 22% 6% 22% 10% 14% 63% 3% 12% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Before Current Scared Confused Indifferent Confident Secure IMPROVED EMOTIONAL OUTLOOK Source: SmartDollar, 2015. Return on investment: improved outlooks RETIREMENT PREPAREDNESS of program participants who are saving 15% of their salary for retirement after two years39%
- 24. 24 Make the leap from intention to action.
- 25. 25 WELLNESS WORKS Evaluate how your company can benefit from a financial wellness program Identify challenges and resource needs to support a program Follow a framework to structure the discussion Determine if you’re a good candidate.
- 26. 26 WELLNESS WORKS Are employees retiring on time with adequate savings? Are participants opting out of auto- enrollment and auto-increase? Is there a high volume of plan-specific Web traffic or calls regarding loans, hardships, or access to money? Plan data 96% 66%
- 27. 27 WELLNESS WORKS Employee demographics Does the company have a high proportion of young employees who may have significant debt? Does the company have an aging population that may need assistance with tax strategies, estate planning, etc., as they approach retirement? Is the company in an industry (e.g., law firm or medical practice) that may hire young employees with a significant amount of college debt?
- 28. 28 WELLNESS WORKS Is a primary reason for offering a competitive benefits package to recruit, retain, and reward top talent? Is your company paternalistic, wanting to give employees the best opportunity for replacement income ratios that are superior to the industry? Are you willing to devote the time and resources to supporting a robust financial wellness program? Corporate culture and philosophy
- 29. 29 WELLNESS WORKS Learn the predominant style categories that financial wellness programs adopt Consider how to match your needs with different styles Recognize that there is not necessarily a right answer— there may be several good choices today, or there may be one for now and a different one for later Navigate the provider landscape.
- 30. 30 WELLNESS WORKS Five methods to address financial wellness Enhanced Employee Education Program Education and Literacy Services and Products Tools Coaching and Behavior Modification
- 31. 31 WELLNESS WORKS Develop a list of top needs or priorities Compare your list of needs against the offering of various financial wellness providers Create a “Request for Information” to gather data from providers to enable a more informed decision-making process Considerations for selecting a provider
- 32. 32 WELLNESS WORKS Considerations for selecting a provider Budget or cost Business model Communication frequency Multimedia resources Data-reporting capabilities Integration with other benefits
- 33. WELLNESS WORKS Empower your employees with financial wellness 3/18 T. Rowe Price Investment Services, Inc. CKFGX1ATK 201803-442871