A Plan Sponsor’s Financial Wellness Program Success

March 7, 2013 (PLANSPONSOR.com) – Employees and employers are increasingly focusing on total financial wellness and not just retirement planning education.

In 2010, 20% of inquiries to Financial Finesse were about financial wellness, according to Liz Davidson, founder and CEO of Financial Finesse. That jumped to 80% in 2011, and was more than 90% in 2012. The number one goal of employers is to prepare employees for a successful retirement—not only ensuring they are on track with long-term savings, but also that they are currently managing their finances so they can save and be debt-free, she said during a webinar.  

Carol Klusek, head of retirement and financial benefits at Aetna, shared with webinar attendees the success of Aetna’s financial wellness program. Klusek said the company started thinking about such a program because many calls from retirement plan participants were about taking money out of their plan, and Aetna was concerned about helping people manage their money better. “We wanted to break out of the typical focus on retirement savings only,” Klusek stated, adding that if an employee has a financial problem, saving for retirement will be his last priority.   

At the same time, folks in Aetna’s health care benefits unit were working on a physical wellness program for employees, so Klusek’s unit partnered with them, deciding that employee wellness should include physical, financial and emotional aspects. They also contacted Financial Finesse and their retirement plan vendors to come up with a plan for the financial wellness program.  

The first thing Aetna wanted to do was call employees’ attention to the overall idea of financial wellness. The company enlisted the help of Suze Orman, who came to speak with employees at Aetna’s home office. The company live streamed the presentation across the country to all locations. Klusek said it got employees excited about doing something about their finances.

Aetna rolled out financial wellness workshops, and found that employees loved the idea of their employer helping them with finances. The program started in 2007, and Aetna has continually built on what has worked, according to Klusek. The company now has an actual financial wellness office manned by a retirement adviser from Aon Hewitt. Staff from Financial Finesse is also in the home office doing in-person and over-the-phone one-on-one meetings with employees about any financial topic.  

In 2013, Aetna started giving employees healthy lifestyle incentives for taking a financial assessment. For example, Klusek noted, an employee participating in a one-on-one session or attending at least one workshop could get $50. Aetna also has a financial wellness website with links to register for events, view short videos that do not take much time from an employee’s job, or read relevant articles—about creating a personal budget, for example. Klusek said they have found that the best advertisement is word of mouth; peers encourage each other to participate.  

Klusek advised that other plan sponsors should do more than just a single financial wellness push, and continue services and communications via multiple channels. She said it took employees at Aetna time to realize the financial wellness program is a permanent resource and is part of their employee benefits.  

Aetna analyzed results for heavy users of the financial wellness program: 91% say they have a handle on cash flow, 100% contribute to the company’s 401(k) plan and 47% say they are on target to replace at least 80% of income in retirement. “There is a clear connection between folks who use multiple services, or use services more often, and [positive behavior],” Klusek said. She added that Aetna will continue to do a return on investment (ROI) analysis of the financial wellness program each year.  

Employee ratings of the financial wellness workshops are never lower than 4.5 out of a 5-point scale, Klusek said. She recommended employers use surveys to get feedback from employees “because you don’t want to think you’re providing a useful service that really isn’t.”

When implementing a financial wellness program, the number one priority is to get upper management support, according to Klusek. “If upper management doesn’t support it, line managers won’t feel comfortable letting employees engage in it on the job,” she stated.   

Klusek also suggested targeting groups with only information relevant to them is better than sending information about all events for all employees. For example, she said, Baby Boomers may be interested in estate planning. Employers should also target locations one at a time. “Try not to get quick results, but use a long-term strategy of reaching everyone in their own time,” she stated. Klusek said marketing materials should incorporate humor, catch employees’ eye and make it easy to take action.  

At the conclusion of the webinar, Davidson said a financial wellness program should be focused on behavioral change; a return for employees increases the ROI for employers. She recommended employers gain employees’ commitment to make a financial change, give them information they need to solve their issues and make them active participants in their own change process. “When they are making their own plan, they are getting started in the process of changing habits,” she noted.  

Diane Winland, senior financial planner at Financial Finesse, suggested employers have employees complete a financial wellness assessment to find out their goals, priorities and issues; measure their handle on cash flow; assess their knowledge of investing and savings; and determine their level of retirement preparedness. An assessment will help employers see the change in these things over time an measure program success. It can also guide financial wellness program efforts, Davidson said.  

On a final note, Davidson acknowledged that employers may have difficulty funding a financial wellness program. She noted that they may be allowed to tap into Employee Retirement Income Security Act (ERISA) accounts for funding. Financial Finesse obtained an opinion letter from Drinker Biddle & Reath indicating it can be an allowable expense if it improves retirement plan success.