PSNC 2013: Financial Wellness at the Workplace

June 10, 2013 ( - Retirement readiness depends on more than your participants’ account balances.

Sixty percent of employees—at least—live paycheck to paycheck. Fifty-five percent do not have a budget. The average household credit card debt is $15, 799. And 30% to 80% of workers waste time on the job by focusing on financial issues. This is the financial landscape, as described by Jania Stout, practice leader and vice president of PSA Fiduciary Consulting Group, at the 2013 PLANSPONSOR National Conference.  

Millions of people say they cannot afford to save for retirement, Stout reported, and one in four of these say that is because of credit card debt. Stout said her company experienced an “aha!” moment when they added a debt elimination webinar to their website and saw the number of attendees multiply.  

Financial literacy includes knowledge about spending plans, savings plans and how to manage credit. If financial literacy is a problem for your participants—according to LIMRA, it probably is (See “LIMRA Reports Financial Literacy Failings”)—finding out what aspect most concerns them, then offering education and support programs for that issue, can help your participants become more stress-free and financially stable.


When financial literacy is a concern, how can plan sponsors address inertia? According to Vincent Morris, president of Bukaty Companies Retirement Plan Services, automatic features are the best solution. Auto-enrollment boosts 401(k) success, and auto-increase is the next big push he expects plan sponsors will see.  

You may have heard that participants cannot afford to defer money towards retirement—and they can’t afford not to, either. Many sponsors worry about this when the topic of auto-enrollment comes up, said Jason Chepenik, managing partner at Chepenik Financial, but most people do not opt out once they have been put into the plan.  

Implementing auto-enrollment for new employees is fairly common, said Morris, while auto-“refresh”—annual re-enrollment—is gaining momentum. He advocates automating a plan to shift inertia by rolling participants into target-date funds (TDFs) at an adequate deferral rate. 

Partcipants who make healthier choices can expect to live longer—and need more savings in retirement. Therefore, Chepenik suggested plan sponsors link their fiscal and physical wellness programs: 

  • Encourage employees to take a financial assessment for a discount; 
  • Establish rewards programs; 
  • Schedule a 4.01 k Fun Run/Walk for financial fitness; 
  • With approval, make additional contributions to the plans of participants who wear pedometers—every step brings them closer to a successful retirement; and 
  • Give out financial wellness certificates. 

Chepenik urged sponsors to find new ways to take ownership of the message they send out. If you would not read the information that your participants receive, why should they? Syncing educational materials with the company culture can result in a more engaged work force.  

The message must be understandable to be meaningful, said Mary Dunn, director of benefits at Baystate Health, PLANSPONSOR’s Defined Benefit Plan Sponsor of the Year. Employees are not experts, and plan sponsors should use accessible channels. Paper and electronic communications should be available, and sponsors should partner with their recordkeeper to find the next application (app) or trend to best reach out to their participants.  

For complicated topics, many participants still favor face-to-face interactions, and devoting paid time to a topic can emphasize the importance of whatever issue is under discussion. She highlighted the importance of branding your materials to catch a participant’s eye—and differentiate your news from junk mail. Working closely with a recordkeeper can help plan sponsors ensure their message appeals to and resonates with employees.  

As plan sponsors and participants become more familiar with an “’auto’ everything” world, new challenges will arise in measuring plan success. Averages skew everything, Chepenik said, and Stout added: “That darn inertia gets them every time.” But progress is being made, and if the panel began on a somber note, it ended with a little levity—Chepenik asked: What do you call a passive fund with an aggressive model? “A passive-aggressive fund.”


Sara Kelly