Workplace Benefits Report:

Transcription

1 RETIREMENT & BENEFIT PLAN SERVICES WORKPLACE INSIGHTS TM Workplace Benefits Report: Employers changing role in helping employees achieve financial wellness December 2013

2 Disclosures 2 Bank of America Merrill Lynch is a marketing name for the Retirement Services business of Bank of America Corporation ( BAC ). Banking activities may be performed by wholly owned banking affiliates of BAC, including Bank of America, N.A., member FDIC. Brokerage services may be performed by wholly owned brokerage affiliates of BAC, including Merrill Lynch, Pierce, Fenner & Smith Incorporated ( MLPF&S ), a registered broker-dealer and member SIPC. All data contained within is from the 2013 Employer Workplace Benefits Report survey unless otherwise noted. Investment products: Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value 2013 Bank of America Corporation. All rights reserved. AR7VBALY 12/2013

3 Overview of the Workplace Benefits Report 3 About the Workplace Benefits Report Bank of America Merrill Lynch s Workplace Benefits Report is an annual study focused on the role financial benefit plans play in employers talent management strategies. This is the second half of our two-part report on workplace benefits. The first part (published in May) focused on trends in employee financial wellness. To access this report go to Methodology Boston research group interviewed a national sample of 1,000 employers who provide 401(k) plans from July 2013 through August 2013 on behalf of Bank of America Merrill Lynch.

4 Defining financial wellness for employees is a critical first step 4 Most employees score low on financial wellness Financial wellness: the ability of each employee to manage household finances for short-term needs while saving for mid- and long-term goals. 65% fell at the low end for financial wellness* Employees are asking for help managing their entire financial life. Employers have an opportunity to help fill this gap. *Bank of America Merrill Lynch Employee Workplace Benefits Report, June 2013.

5 Action step: Help employees achieve better financial wellness 5 Work with your benefits provider or consultant to create a framework for financial wellness education and guidance What should a financial wellness program encompass? What do we currently offer? Do employees use current benefits offerings? Are there gaps in our financial wellness education? What improvement in productivity should we reasonably expect?

6 More employers recognize their influence on employees overall financial wellness 6 81% of employers feel at least somewhat responsible for their employees overall financial wellness Employers believe that providing tools to help improve financial wellness may lead to a more satisfied and productive workforce.

7 Leading-edge companies have already started to implement financial wellness programs 7 Despite all of the regulatory action during the past few years, some employers have implemented a financial wellness strategy for their employees

8 More comprehensive financial education is a key part of new benefits offerings 8 Leading-edge companies understand that the individual s total financial picture should be considered for overall financial wellness And are providing education on retirement as well as other financial wellness topics

9 Action step: Implement your financial wellness program 9 Set up an in-house team to define a financial wellness strategy for your workplace Conduct focus group sessions with employees. Use information from your retirement plan provider. Make educational opportunities available during the workday. Provide access to financial content and easy-to-use tools.

10 Offering more holistic guidance can help employees achieve better financial wellness 10 Employers are offering more holistic services because they recognize that employee financial literacy is quite low The specific results show: Employers believe employees would benefit from access to more holistic financial services. More companies than ever offer these key financial services. But, fewer than half of employees use these services.

11 Action step: Offer more holistic benefits guidance 11 Deliver additional financial wellness support and education House information in one central area. Deliver the right message at the right age and stage. Invite financial advisors to host in-house seminars or workshops. Take advantage of technology to deliver live webinars.

12 Consumer-driven health care needs a strategy like retirement that provides employees with education and guidance 12 The rising cost of health care has been a challenge for most employers budgets 81% report their companies have experienced increased health care costs during the past two years. 60% have passed some of the cost increases to their employees. - The concern: Can employees handle this cost increase in their personal budgets? - For some, it could put a strain on their ability to achieve financial wellness. - That s why education about how to manage employees overall financial life is so critical.

13 Action step: Use the 401(k) model as your template for health care benefits 13 Leverage the retirement model to help employees manage the significant responsibilities of their health plans Request proposals from financial services firms that can provide education. Enter into an integrated benefits arrangement with your plan provider. Elevate the importance of saving and managing health care dollars. Provide more information about health care plans and management.

14 Pre-retirees have been going it alone, but value more information from their employers 14 Retirement is a financially challenging time, requiring a more sophisticated level of financial literacy 46% of employers provide retirement guidance. - But the majority believes it could be improved. Employers must determine how to help employees prepare for living in retirement. - Consider the role of guaranteed-income and managed-account options. - Keep intellectual capital in-house by allowing employees to ease into retirement by working part-time or consulting.

15 Action step: Prepare employees for the transition to retirement 15 Work with your financial services providers on supporting retiring employees Start the retirement discussion early in their 50s. Reach out to existing retirement plan vendors to learn about the programs they may offer. Look for comprehensive programs. Bring in experienced financial advisors. Examine the role managed accounts can play.

16 Strategies to help employers integrate financial wellness education into existing benefit plans 16 We work closely with plan sponsors to help them design and implement more holistic financial wellness programs.

17 We can help 17 We are committed to helping our clients chart a new benefits course. For more information about how we can help your company and its employees with workplace benefits, contact your Bank of America Merrill Lynch representative or call Visit us online at benefitplans.baml.com or us at benefitplans@baml.com