Products September 12, 2018

Empower Combines HSA and Retirement Plan Reporting

A new interactive interface allows employees to think about retirement and health savings together and visualize the best way to allocate limited assets.

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Empower Retirement has launched an “integrated health and wealth experience” aimed at simplifying and clarifying individuals’ savings priorities across their retirement account and health savings account (HSA).

According to the firm, the “improved and streamlined Empower experience” makes it easier for employees to see how their health savings account assets can prepare them for retirement.

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Beyond the updated interface, Empower has deployed a new approach that expands its interactive technology to “allow plan sponsors and participants to see in a glance what their projected health care costs may be in retirement and how it compares with the projected balances in their HSA.” Empower says the new approach leverages technology that makes it easier for participants to adjust their deferral “with a simple click and send those changes straight to payroll departments.” The approach also integrates data on prior year contributions and important annual estimates.

According to the firm, the new interactive technology allows employees to think about retirement in categories and visualize which part of their savings will be allocated to which expense category. The system builds on Empower’s health savings account platform, Empower HSA, which launched a year ago March. The Empower HSA provides plan participants with access to an online solution that integrates retirement and health care savings, helping participants identify the gaps in their retirement plan and develop a strategy to take action.

This new Empower Retirement savings optimization model is laid out in a white paper, “The New Rx for Retirement,” which can be download from the Empower Institute website.

Data and Research September 12, 2018

Examining the Root Causes of Financial Stress

Marsha Whitehead, OneAmerica vice president of enterprise marketing, explains how evaluating top financial concerns provides great insight into the root causes of financial stress.

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In addition to evaluating participant financial stress levels, a new OneAmerica survey also looks at the specific factors causing participants to experience financial stress.

Two in three retirement plan participants indicate they have moderate to very high levels of financial stress, according to recent client polling conducted by OneAmerica.

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The firm finds one in five Americans report feeling “high” to “very high” financial stress levels.

“Not having enough for retirement was the top financial concern, cited by 34% of participants; not having enough to pay monthly bills was cited by 23% of participants, and not being able to pay housing costs was cited by 15% of participants,” the survey report says. “The study found that age impacts participant top financial concerns, with younger individuals showing more concern about meeting day-to-day expenses, and older individuals indicating they are more concerned about not having enough for retirement.”

Marsha Whitehead, OneAmerica vice president of enterprise marketing, notes that evaluating top financial concerns provides great insight into the root cause of financial stress.

“It is critically important for plan sponsors to understand and address participants’ concerns around retirement preparation and day-to-day financial needs,” Whitehead suggests. “Failing to do so might not only lead to a financially stressed work force, but one that may experience increased absenteeism, tardiness, decreased productivity and safety issues.”

OneAmerica’s survey shows one in three participants report that being able to meet day-to-day and monthly expenses most closely aligns with their definition of being financially well. One in four define financial wellness as having enough money to retire, followed by being prepared for a financial emergency or life event (15%), having a controlled level of debt (14%) and achieving a desirable level of income (12%), says the firm.

According to the polling, nearly one in four participants indicate that gaining control of their debt is most important when it comes to feeling financially well, followed by 22% indicating that contributing more to their retirement plan will help them in achieving financial wellness. Creating a formal budget or spending plan was cited by 19% of retirement plan participants.

“As the industry looks to place a value on a participant’s or a plan’s financial wellness, it is important to look at these results and understand that achieving financial wellness varies from participant to participant and can shift as an individual ages,” observes Melissa Musial, OneAmerica marketing research and data manager. “Although we see retirement preparation as a top financial concern and near the top of how participants define and achieve wellness, basic financial concerns such as meeting day-to-day expenses often take priority. If a plan sponsor has not yet implemented a financial wellness program, now is the time.”

A white paper with additional survey results is available for download here.

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