6 steps to bring financial wellness to the workplace

Transcription

1 6 steps to bring financial wellness to the workplace June 23, 2015

2 Speakers Jennifer Benz Founder and CEO Benz Megan Yost Vice President, Head of DC Participant Engagement State Street Global Advisors Barbara Kontje Director of Retirement Americas & Smart Saving American Express Company Jaime Erickson Executive Director, Retirement Benefit Plans Comcast NBCUniversal

3 Agenda 1 Why financial wellness now? 2 American Express story 3 Comcast NBCUniversal story 4 How we created the financial wellness framework 5 Six steps to build your financial wellness strategy 6 Q&A

4 Why financial wellness now?

5 Why financial wellness? Of employees feel distracted at work Of defined contribution participants report missing work to deal with the emotional stress caused by their finances Of defined contribution participants feel they are living paycheck to paycheck Of U.S. workers lack a savings cushion for emergencies Source: SSGA Biannual DC Investor Survey. Methodology can be found in the disclosures.

6 American Express

7 American Express A quick look at who we are $34.2B Total 2014 revenue Fortune 100 Company Ranked 16 TH Fortune s Americas most admired companies 53,500 Employees globally ,000 Employees in U.S. Years in the business Countries that say we re a great place to work Ranked #1 Eight Years in a Row JD Power & Associates Source: The above informa2on was provided by American Express on June 16, 2015

8 American Express We heard that employees wanted to save but felt they couldn t It s intimidating. It s overwhelming. I don t know where to start. The numbers in 2009 told a story, too Declining RSP*/401(k) participation from mid-80% to 70% in Q Feedback from our employees and vendors highlights an unfulfilled need Utilization of services below expectation * RSP is the Re2rement Savings Plan, the Company 401(k) plan Source: The above informa2on was provided by American Express on June 16, 2015

9 American Express Our goals Declining RSP*/401(k) participation from mid-80% to 70% in Q Feedback from our employees and vendors highlights an unfulfilled need Utilization of services below expectation Employee Engagement Employee Appreciation Promote Usage Smart Saving fairs Seminars and webinars Launch Smart Saving on our intranet Q&A tables on-site 1:1 financial & retirement planning meetings Easy access to resources Address employee irritants Promote existing programs 10% increase in RSP participation Increase utilization (e.g., financial planning and legal service plan) Integrate with other internal Wellness program messaging (Healthy Living/Smart Saving/ WorkLife) Source: The above informa2on was provided by American Express on June 16, 2015

10 American Express Smart saving an integrated approach to employee financial wellness 4 categories of financial benefits RETIREMENT SAVINGS PLAN DAY-TO-DAY EXPENSES Financial Planning Services Deals and Discounts EAP Wellness Centers PROTECTION & PLANNING Evaluating Insurance needs Legal Assistance Plan Wills and Power of Attorney Health Savings Account FAMILY & KIDS Back-up child care program Secondary education resource program Back-up elder care program Source: The above informa2on was provided by American Express on June 16, 2015

11 American Express We have met several goals but we need to continue our focus RECENT ACTIVITIES April 2015: Global Smart Saving Month. Innovation grant to launch AXP Smart Saving Month in 5 markets to promote our programs that support Financial Well-being April 8 fair in NY with 9 Smart Saving vendors; partnership with Healthy Minds Online global financial wellness assessment tool METRICS AND RESULTS 700 event attendees 200 clicks to the Outlook Reminder pdf Visits to Smart Saving U.S. page on Square tripled in April NEXT STEPS Deep dive into vendor metrics (website, phone, program utilization, etc.) Results of the Financial Wellness Assessment (FWA); find areas where employees need additional support Targeted campaigns and educational communications based on analysis of FWA Increase utilization of programs Employee network connections Source: The above informa2on was provided by American Express on June 16, 2015

12 Comcast NBCUniversal

13 Comcast NBCUniversal * * *Minority interest and/or non-controlling interest. Source: The above informa2on was provided by Comcast NBCUniversal on June 19, 2015

14 Comcast NBCUniversal At Comcast NBCUniversal, benefits goals are tied to driving business performance Help all of our employees perform at their best Help each of the company s businesses perform at their best Responsibly manage the investments that our businesses and employees make to our program Source: The above informa2on was provided by Comcast NBCUniversal on June 19, 2015

15 Comcast NBCUniversal Benefits experience focused on an assisted consumer approach Health Assistants and Financial Counselors Benefit Plans: Health, dental, vision, voluntary, retirement Enterprise wide mybenefits website Benefit Programs People to assist in your health and financial journey Source: The above informa2on was provided by Comcast NBCUniversal on June 19, 2015 Benefit plans & programs to enable physical, emotional and financial well-being Do-it-yourself tools to personalize the experience

16 Comcast NBCUniversal Why financial wellness matters at Comcast NBCUniversal Business issue Impact of low financial wellness U.S. benchmark statistics Productivity Work absences 22% of U.S. employees admit to missing at least one day of work in the past year to deal with a financial problem Distraction during work The 15% of the U.S. workforce that is most financially stressed spend 20 hours per month of work time dealing with personal financial challenges or crises Medical costs Stress-related costs 50% of all doctor visits are stress related with $11,000 to $15,000 average annual claims cost per financial stress-impacted employee Turnover Digestive disorder costs Severe anxiety costs Recruiting and training costs 27% of the most financially stressed U.S. employees (referenced above) have ulcers or other digestive track problems (compared to 8% of rest of population) 29% of the most financially stressed U.S. employees have severe anxiety (compared to 4% of rest of population) 40% of voluntary employee turnover is due to stress and 50% of employee stress is related to financial stress Source: The above informa2on was provided by Comcast NBCUniversal on June 19, 2015

17 Comcast NBCUniversal Observable measures of financial wellness suggest that financial stress is high in the Comcast workforce Indicator of poor financial wellness Comcast situation U.S. benchmark Comcast situation as a multiple of U.S. benchmark Wage garnishments 15% (or more than 15,000) of Comcast employees 10% (45% of these are due to revolving credit) 1.5 X 401(k) loans 30% of Comcast employees have an unpaid 401(k) loan 21% 1.5 X 401(k) hardship withdrawal 9% of Comcast employees have taken a hardship withdrawal in the last year 2% 4.5 X Source: The above informa2on was provided by Comcast NBCUniversal on June 19, 2015

18 Comcast NBCUniversal The effect of our poor financial health Reduced Productivity Increased Turnover Higher Medical / Rx Claims Costs Source: The above informa2on was provided by Comcast NBCUniversal on June 19, 2015

19 Comcast NBCUniversal Estimated savings This represents millions of dollars of potential savings across the organization 2% of Payroll YEAR 1 3.2% of Payroll YEAR 2 AND BEYOND LAUNCH PROGRAM Source: The above informa2on was provided by Comcast NBCUniversal on June 19, 2015

20 Comcast NBCUniversal Our short-term strategy: Work with what you ve got At Comcast NBCUniversal, that means Re-positioning our focus on the interconnectedness of physical, emotional AND financial well-being Packaging our financial products and services differently Leveraging our media channels to personalize the experience Let s look at a few examples. Source: The above informa2on was provided by Comcast NBCUniversal on June 19, 2015

21 Comcast NBCUniversal Source: The above informa2on was provided by Comcast NBCUniversal on June 19, 2015

22 Comcast NBCUniversal Source: The above informa2on was provided by Comcast NBCUniversal on June 19, 2015

23 Putting the pieces together Step 1: Understand the financial landscape Step 2: Define financial wellness for your organization Step 3: Lean on best practices Step 4: Explore established and emerging solutions Step 5: Overcome challenges Step 6: Build a business case

24 Step 1: Understanding the financial landscape

25 Step 1: Understanding the financial landscape Financial wellness ecosystem WORKING LIFE ECONOMIC LIFE PERSONAL LIFE Wages Taxes Health Care Retirement Bonuses Wage Growth Child Care Tuition Reimbursements Wellness Concierge Services Supplemental Benefits Income Housing Basic Costs Insurance Other Health Care Costs Education Costs Savings Debt Lifestyle Habits Household Structure Commitments Stress Entertainment

26 Step 2: Define financial wellness for your organization

27 Step 2: Define financial wellness for your organization Meet people where they are: INCOME STRUGGLES Lives paycheck to paycheck Lowest paid workforce Limited knowledge of finances Multiple jobs Poor credit Risk for dependence on predatory products Lacks savings cushions

28 Step 2: Define financial wellness for your organization Meet people where they are: SPENDING CHALLENGES Lives paycheck to paycheck Claims to be financially literate Does not manage cash flow effectively or have a budget May have poor credit Could be young and early in career Has debt from credit cards, car loans and other purchases Lacks savings cushions

29 Step 2: Define financial wellness for your organization Meet people where they are: BUILDING SAVINGS Has a savings cushion Understands the importance of savings and is preparing for the future Needs help fine-tuning budgeting and cash flow management skills Looks for ways to save on taxes Wants to get the most out of workplace benefits May still need financial literacy and education support, with an emphasis on decision-intervention communications and basic investing concepts

30 Step 2: Define financial wellness for your organization Meet people where they are: EXTRA INCOME Among the top 20 percent of earners in your workforce Financially literate and thinking of the future Owns a home or is likely to be in a position to buy one Has children and is saving for college Thinks about and takes steps toward building retirement savings Looks for ways to save on taxes Needs support with wealth management and investment decisions

31 Step 2: Define financial wellness for your organization Meet people where they are: FINANCIALLY SECURE Is among the company s most well-compensated Looks for ways to maximize tax benefits Is very interested in financial planning and wealth building Has plans for unforeseen circumstances Has prepared legal documentation, including a will, and named power of attorney and beneficiaries to accounts May not fully understand the value of the total compensation package May need assistance on additional retirement planning strategies Prioritizes saving in retirement accounts, saving at maximum IRS contribution levels

32 Step 3: Lean on best practices

33 Step 3: Lean on best practices EVALUATE AUTOMATE & ESCALATE KEEP IT IN THE PLAN Use plan data to get a better understanding of your employees participation, savings and asset allocation as indicators of financial disconnects. For example, are younger employees investing in conservative investments? Use that data to create interventions and communications to correct behaviors. Inertia alone can hamper financial outcomes. Use automatic enrollment and automatic savings increases to nudge employees into better savings habits. Hard-earned savings are at higher risk when employees can easily tap or cash out their retirement savings. Consider communicating the drawbacks of cashing out and make it more difficult for employees to make bad decisions.

34 Step 3: Lean on best practices Choose Benefits That Engage and Matter Segment Programs and Communications Communicate Year-round

35 Step 4: Explore established & emerging solutions

36 Step 4: Explore established & emerging solutions Employer Tools Consumer Tools Financial Wellness & Diagnosis Financial Counseling Concierge Services Emergency Savings & Loans Cash Flow Management Sophisticated Education & Budget Management Simpler Investing Investment Education Leverage Financial Services in Existing Benefits Credit Counseling & Debt Consolidation Financial Action Plan Saving Games Full Financial Picture Bill Pay, Budgeting and Debt Management

37 Step 5: Overcome challenges

38 Step 5: Overcome challenges How do you work with limited resources? Considerations: Headcount and dollars are crucial to execute strategy and communications Solutions: Start small, promote what you have and track the impact of your efforts. Leverage your vendors to help you do more. Make the business case for financial wellness to justify the need for more resources and budget. Utilize HR for program delivery, and keep your benefit/compensation colleagues focused on strategy. Evaluate and reprioritize current solutions; consider replacing some solutions with more focused alternatives. Tweak off-the-shelf products.

39 Step 5: Overcome challenges How do you navigate complex, disconnected programs? Considerations: Making the experience easy for employees is critical for changing behaviors Solutions: Consolidate your resources into one easy-to-find place. Create a website with a dedicated financial wellness page. Build awareness of where to go for information. Develop just in time communications so employees know about available benefits when the need arises. This can take several forms life events, new hire orientation, push notifications from vendors, etc. Host a vendor summit to find opportunities to better integrate programs and communications.

40 Step 5: Overcome challenges How do you meet the needs of various stakeholders? Considerations: Competing priorities and too many cooks in the kitchen can make it hard to agree on your organization s strategy Solutions: Utilize a strong financial wellness framework to keep parties grounded in the shared vision. Focus on creating a strategy that ties to concrete goals. Work with your vendors to encourage collaboration.

41 Step 5: Overcome challenges How do you get employees to pay attention to communications? Considerations: Limited attention spans on top of many learning styles, consumption preferences and demographics Solutions: Communicate year-round in smaller campaigns rather than focusing on getting a lot of information out at once. Do something differently change the look and feel of the messaging or the campaign theme to grab attention. Make benefits education part of mandatory training. Communicate during life events. Use simple tools like webinars to get the word out frequently. Tie financial education to action required events such as annual enrollment.

42 Step 6: Build a business case

43 Step 6: Build a business case Data points to measure: Presenteeism Employee Job Performance Cost and ROI of Current Offerings Retirement Readiness Absenteeism Medical Claims Debt Levels General Financial Wellness Turnover Employee Satisfaction with their Work and Life Environments Credit Scores

44 The six must-ask questions before building a business strategy and vision 1 What is our vision for financial wellness? 2 What is our philosophy? 3 What are our objectives? 4 How will we measure success? 5 How will we tie those measurements to business goals and results both short-term and long-term? 6 What resources are needed to create the program, manage it over time and communicate it frequently?

45 Q & A

46 Thank you for joining! Download the framework: BenzCommunications.com/FinancialWellness Send us your feedback: Disclosures Benz Communications, SSGA, and IM Consulting are independent organizations that are collaborating on this project. Investing involves risk including the risk of loss of principal. The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor s particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor. The views expressed in this material are the views of the organizations listed above through the period ended June 22,2015; they are subject to change based on market and other conditions. ssga.com benzcommunications.com 2015 State Street Corporation. All Rights Reserved. State Street Global Advisors, One Lincoln Street, Boston, MA

47 Disclosures Investing involves risk including the risk of loss of principal. The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA or Benz Communications express written consent. DC Investor Survey, March The survey was fielded in partnership with TRC Market Research, an independent marketing research firm. The data were collected in January 2015 through a 20-minute Internet survey using a panel of 1,009 verified 401(k), 403(b), 457(b) and profit-sharing plan participants, aged 20 to 69, who were working at least part-time. The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street shall have no liability for decisions based on such information.

48 Disclosures The views expressed in this material are the views of SSGA Defined Contribution Team, Benz Communication, Barbara Kontje, and Jamie Erickson through the period ended June 22, 2015 and are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Web: State Street Corporation All Rights Reserved. Tracking Code: Expiration Date: 6/30/2016