More Tracks, More Benefits

Employers are creating dual-track programming to improve financial wellness for their workforces, leveraging both retirement plans and human resource departments. The additional resources reflect a growing demand from employees facing financial stress, which is increasingly driven by short-term cash flow pressure, rather than a lack of financial awareness.

“Employers are thinking more strategically about financial wellness as a business tool, not just an employee perk,” says Sara Vipond, a wealth research consultant at Mercer. “The conversation has expanded from retirement readiness to attraction, retention, productivity and engagement.”

More than one-quarter of workers now seek help in areas such as emergency savings, paying down debt and overall financial wellness, double the share of workers who reported looking for such assistance in 2023, according to Bank of America’s “2025 Workplace Benefits Report.”

“In the last five years, one thing we’ve seen is an expansion of purpose, with more overlap between retirement plans and the well-being piece,” says Mark Smrecek, senior director of retirement at WTW. “The day-to-day finances of the employee have taken a more forward role within the retirement planning space, so the oversight of that has started to shift into the retirement space a little bit more as well.”

The Bank of America report found that building savings for unexpected costs in retirement is the second-most-important financial goal for employees, trailing only retirement itself. However, 45% of employees reported falling short of their emergency-savings goals.

Many of the stressors—mounting debt loads, housing costs and job insecurity—that drive harmful in-plan behavior originate outside of the retirement plan, according to Greg Ward, director of Financial Finesse’s financial wellness think tank.

“Solving [for those stressors] requires connecting the retirement plan to the broader HR benefits ecosystem,” he says.

In-Plan Financial Wellness

On the plan side, solutions include enhancements such as those included in the SECURE Act 2.0 of 2022, including emergency savings linked to retirement plans; student loan matching contributions; and expanded automatic enrollment and automatic escalation. In-plan financial wellness tools also can include retirement income projections, advice and managed accounts.

The main benefit of in-plan financial wellness benefits is the ease of access, Vipond says.

“The plan already has an enrolled audience, an established recordkeeper relationship, and a natural link to retirement savings behavior, which can create integration and cost efficiencies,” she says. “The trade-offs are that not all employees are engaged with the retirement plan, and not every solution may be available through the recordkeeper, and customization can be limited.”

HR-Based Programming

Solutions offered by HR departments include non-plan emergency liquidity solutions (both stand-alone and payroll-linked), short-term personal loans and employee banking. HR may also provide broader wellness support, including budgeting tools, credit monitoring and financial literacy information platforms.

“We’ve seen a focus over the last two to three years on building the hub of the network around an organization that isn’t necessarily the recordkeeper,” Smrecek says. “So as we think about financial education and coaching, we’ve seen a big push into this space from plan sponsors and employers with the thought that an employee’s financial life is much more complicated than which fund I’m going to invest in [in] my [defined] contribution plan.”

Nearly half of plan sponsors now say they are providing financial education and coaching outside of what is available from their recordkeeper, a trend Smrecek says is poised to continue growing.

“All of these solutions in the financial well-being space really draw back to how to more effectively provide rewards to employees, and that’s not simply a retirement plan goal or objective,” Smrecek says. “That’s the broader HR objective.”

Offering financial wellness programs as non-plan benefits also gives companies greater flexibility for experimentation than integrated retirement plan programs.

“[HR-based benefits] can reach employees who may not be active retirement savers yet and address the full range of financial stress—from budgeting and debt to student loans, emergency savings, and retirement readiness,” Vipond says.

Connecting All Offerings

HR departments can also connect financial wellness benefits with other holistic wellness offerings, such as those focused on mental or physical health.

“The benefits may already be in place, but there may be a lack of coordination,” Ward says. “A platform that can integrate all benefits into one source can reduce friction and improve engagement and participation. [Artificial intelligence] technology can help personalize and scale benefit communication so that participants receive the right information at the right time.”

To maximize effectiveness, companies with financial wellness offerings through both their plan and their HR department must emphasize coordination and align their communication about both in-plan and out-of-plan financial wellness benefits.

“We believe the relationship between HR and the recordkeeper works best as a true partnership with each playing a coordinated role,” says Dan Morrison, president of retirement at Ascensus.

Point-in-Time Communication

Most experts agree that it is most effective when employers provide a single platform through which participants can easily navigate all benefits and should attempt to connect with participants during onboarding and as they hit life milestones, such as getting married or starting a family, that could impact their financial lives.

Elizabeth Chiffer, a senior retirement analyst with Cerulli, says that open enrollment periods provide another chance for employers to regularly share benefits information.

“Plan sponsors could conduct more communication with participants around that annual time to encourage participants to check in on their retirement and … assess their financial well-being holistically on an annual basis,” Chiffer says.

Vipond recommends that plan sponsors interested in adding financial wellness elements to their benefits package start by assessing their employees’ biggest pain points and determining the steps that would best help them.

“From there, [employers] can map solutions to the right channel: retirement plan when the issue is tied to savings behavior or long-term outcomes, HR when the issue is broader financial resilience, debt or day-to-day money management,” Vipond says.

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