Companies feel increasingly responsible for their employees' financial wellness, and to that end are boosting that aspect of their benefits and education.
So says Bank of America Merrill Lynch's Workplace Benefits Report, which also found that almost 75 percent of plan sponsors surveyed — including 90 percent of large companies, those with $100 million or more in 401(k) assets — feel that financial wellness solutions are on the way to becoming an integral part of benefits packages within the next decade.
While 83 percent of respondents feel some responsibility for their employees' financial wellness, not all are adopting some financial wellness features the same rate. Larger companies are in the vanguard, adopting such features faster than their smaller counterparts, with a significant increase just in the past year in the number of firms offering financial education. Topics included budgeting, planning for health care costs and managing debt.
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That doesn't necessarily mean companies are caring for the financial wellness of their employees on an equal basis. Most respondent sponsors, the report said, recognize that different generations within their employee bases have different needs, but few — just 20 percent of large firms — have made an effort to change the way they communicate or engage with their employees based on their age demographics. And only 25 percent of large firms said they either offer, or are considering offering, financial incentives to keep employees participating in workplace financial solutions. Overall, it's just one out of seven companies that provides such incentives.
The problem is particularly acute at small firms (those with less than $5 million in 401(k) plan assets), where only 32 percent even advise employees that just putting money into a 401(k) is not enough to provide for their retirement. Mid-size firms (those with $5 million to $100 million in 401(k) plan assets) do a bit better, with 58 percent of respondents alerting employees to that fact.
But the trend appears to be growing, with 48 percent of large firms having adopted financial wellness programs; that's up from 35 percent in 2013. The smaller the company, the less likely that it offers any financial education other than on retirement, but larger firms have, since 2013, begun to add planning for health care costs (64 percent), budgeting (40 percent) and managing debt (43 percent).
Plan sponsors using these programs believe they pay off, since they report employees using them are more satisfied ((78 percent), loyal (70 percent), engaged (68 percent) and productive (57 percent).
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