Products June 8, 2016

Empower to Offer New Financial Wellness Benefit

The company seeks to help employees pay bills and save for emergencies with a new integrated service.
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Empower Retirement plans to offer participants the ability to manage a greater portion of their finances when they go online to access their retirement account.

Through a new exclusive agreement with Atlanta-based DoubleNet Pay, Empower participants will have a new way to pay household bills, pay down debt and contribute to savings accounts.  The service is designed to automatically track employees’ bills and due dates and seamlessly schedule payments around their paycheck cycles. This leaves employees with an exact amount for discretionary spending and sets aside savings based on personal goals.

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“One of the first steps toward saving for tomorrow is effectively managing one’s finances today,” says Edmund F. Murphy, III, president of Empower Retirement. “With this innovative new offering, we’re taking the next step to further add value to clients and participants by providing a new vehicle to ultimately help them prepare for retirement.”

The new service, which Empower will begin offering to select clients in coming months, will be an option available to participants in plans using Empower’s suite of automated payroll services.

Brian Cosgray, chief executive officer of DoubleNet Pay, notes that a key benefit to the service is that it builds in the discipline and organization that some busy workers might not have—and thereby reduces the risk that they will face late charges, overdraft fees and related complications.

Participants who sign up for the new service for a moderate fee will be able to interface with the service through the Empower Retirement participant experience. Participant funds are held in an FDIC-insured savings account at DoubleNet Pay’s partner bank and available to them at any time.

Data and Research June 8, 2016

Retirement Not Americans' Only Financial Concern

“They fear the unknown. They don’t know how to plan for the unplanned, and they worry that if something unexpected happens, it could have deep and lasting consequences," says Rebekah Barsch, with Northwestern Mutual.
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Eighty-five percent of Americans are financially anxious, and 36% say it has gotten worse in the past three years, according to the 2016 Northwestern Mutual Planning & Progress Study.

Only 14% say their feelings of financial anxiety have improved, and nearly one-third, 28%, say they worry about their finances every day.

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Americans’ two biggest financial fears are facing an unplanned financial emergency (38%) and incurring an unplanned medical expense due to an illness (34%). These outpaced outliving their retirement savings (21%), losing their job (17%) or being unemployed for an extended period of time (15%). When asked what the source of their financial concerns are, 55% said unexpected expenses, followed by saving for retirement (29%), health care costs (27%), mortgage or rent (25%), credit card debt (25%) and student loan debt (13%).

A recent Federal Reserve Survey found the number one reason employees says they do not participate in their employer-sponsored retirement plans is they cannot afford to contribute.

“There’s the sense that people are just staying afloat, that they’re meeting their most immediate financial needs but that they are worried about what they can’t see or don’t expect,” says Rebekah Barsch, vice president of planning and sales at Northwestern Mutual. “They fear the unknown. They don’t know how to plan for the unplanned, and they worry that if something unexpected happens, it could have deep and lasting consequences.”

Asked what they think are the benefits of financial security, 52% said “peace of mind that I never have to worry about day-to-day expenses,” 22% said the “flexibility to live a desired lifestyle,” and 8% said “freedom to pursue my dreams.”

Harris Poll surveyed 2,646 adults between February 1 and February 10 for Northwestern Mutual. The 2016 Northwestern Mutual Planning & Progress study can be downloaded here.

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