Value added resources Financial Literacy Index

Transcription

1 Value added resources Financial Literacy Index

2 Financial Wellness Employee wellness plans have traditionally focused on physical and mental well-being, but organizations are beginning to recognize the important role that financial wellbeing can also play in an employee s overall health. Financial Well-being A state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow them to enjoy life. - Consumer Financial Protection Bureau Consider the following statistics The ratio of debt to disposable income in Canada is higher than in any other G7 country. 1 Less than half of Canadians maintain a household budget. 2 Only 40 percent of Canadians feel knowledgeable about their finances. 2

3 Financial Wellness Does your wellness program incorporate financial wellness? Do your employees experience health issues related to financial wellness? Do you know the current state of your employees financial knowledge?

4 Financial Wellness As defined contribution (DC) plans and group registered retirement savings plans (GRRSP) continue to grow in popularity as workplace savings vehicles, employees are being asked to shoulder an increasing amount of responsibility for the success of their retirement investments. Between juggling daily personal finances and making decisions related to future financial security, is it any surprise that 42 percent of working Canadians say they are distracted at work due to financial worries? 3 Health related issues Losing sleep 11X more likely to report experiencing back pain High blood pressure More prone to use of antidepressants 42% of employees are distracted at work due to financial worries. 3 Poor financial well-being causes stress that negatively impacts our physical and mental health which, in turn, affects workplace productivity. A Sun Life Financial study found that people who were experiencing financial stress had higher blood pressure. They were also eleven times more likely to report back pain and were more prone to antidepressant use. In fact, the financially unprepared, themselves, admit they are 16 percent less productive on the job. 3

5 The Cowan Financial Literacy Index Introducing the Cowan Financial Literacy Index So how can you help? A useful area of focus that employers may wish to consider is increasing employee financial literacy. Cowan Insurance Group has developed a financial literacy tool seven questions related to investments and financial planning that can assist organizations in gauging levels of employee financial literacy. Employees who are financially stressed can be: 16% less productive at work. 3 Sick time is 25% higher than average. 3 68% of employees believe their employer has a role to play in their financial health. 3 Data from the index will be used to: Develop comprehensive communication strategies Plan targeted educational programs Assist in effective plan design Shape your investment line-up offerings

6 Literacy Tool Purpose Raise Awareness Increase awareness for the need and importance of financial wellness. Multimedia Education Develop training strategies to maximize effectiveness for all employees.

7 Sample Pop Quiz Question #1 If each of the following persons had the same amount of take home pay, who would need the greatest amount of life insurance? A young single woman with two young children A young single woman without children An elderly retired man with a wife who is also retired A young married man without children Don t know

8 Program Advantages Studies have shown that employers who support and provide financial wellness programs for employees realized the following positive results: 43% Increase in engagement & morale 40% Improvement in productivity 23% Reduction in absenteeism Source: Alliant Survey of Senior HR Decision Makers, January 2015http://

9 Conduct a Financial Literacy Audit Teresa Norris-Lue National VP, Pension & Retirement Consulting Cowan Insurance Group ext teresa.norris-lue@cowangroup.ca Investing in financial wellness boosts overall well-being of employees increasing their health, productivity and engagement 1) Statistics Canada, Current and Capital Accounts 2) Statistics Canada, Canadian Financial Capabilities Survey 3) Manulife/Ipso Reid Health and Wealth Wellness Study