More plan sponsors are offering financial wellness benefits to their employees, new studies show.
According to Bank of America’s 11th annual Workplace Benefits Report, 92% of 834 employers surveyed feel a sense of responsibility for the financial wellness of their employees, up from 81% in 2015. More than half say they feel extremely responsible. The report also found 46% of employers are offering financial wellness programs compared to 40% in 2020.
Access to professional support has increased as well, with 47% of employers now offering access to financial advisers, 45% providing support for developing good financial habits, and 42% providing access to financial products or services. More employees are craving financial advice too, with workers listing access to a financial adviser, information on retirement plans and help with financial skills as the top three areas for which they want support.
High numbers of employees with student loan and credit card debt has compelled plan sponsors to add debt assistance tools to their financial wellness benefits, as 53% now offer help, compared to just 15% in 2013. Debt continues to remain a challenge for all workers, with 88% of Black/African American employees, 87% of Hispanic/Latino employees, 81% of white/Caucasian and 60% of Asian employees holding some type of debt.
Employers who do not offer debt assistance tools are planning to do so in the future, according to the 2021 Retirement Planscape report from the Cogent Syndicated division at Escalent. Among those not offering a student loan 401(k) match, seven in 10 large-mega plans (71%), 46% of small-mid plans, and 36% of micro plans are likely to do in the future.
Under the new Coronavirus Aid, Relief and Economic Security (CARES) Act extended through 2026, employers can make tax-free contributions of up to $5,250 per year to help pay off an employee’s student loans. Due to the new provision, four in 10 defined contribution (DC) plans are likely to offer student loan payments as an employee benefit. Only 9% of large-mega plans are averse to adding this benefit in the future.
The Cogent study found a greater number of DC plan sponsors are relying on plan provider financial wellness programs (50% vs. 40% in 2020). Financial wellness programs remain centered around retirement income planning, online access to financial tools, access to financial advisers and health savings account (HSA) guidance, each component offered by at least three in 10 plan sponsors across all plan-size segments. Cogent says this aligns with plan participant interest found in its DC Participant Planscape study.
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