Franklin Templeton and Principal Each Make HSAs a Priority

Franklin Templeton announced it has expanded eligibility of the increasingly popular institutional R6 share class for health savings accounts (HSA), while another retirement plan services provider, Principal Financial Group, unveiled its first collaboration with an HSA provider, HealthEquity.

Franklin Templeton explains its move is aimed at establishing the firm as a leading “HSAIO” provider, short for “HSA investment only,” as opposed to DCIO—or “defined contribution investment only.” Principal says its new partnership is designed to give retirement customers a holistic picture of their retirement outlook, including their HSA balances.

Talking about his firm’s recent work with PLANSPONSOR, Kevin Murphy, Franklin Templeton’s head of strategic accounts for the defined contribution division, said the HSA topic has been front and center for his team and is about to gain a significant amount of momentum in the DC plan space. Murphy said advisers and plan sponsors are asking questions about how to effectively integrate HSAs with retirement plan benefits in order to promote more holistic financial wellness for participants.

This matches to a significant degree Principal’s explanation for its own HSA-focused activity. Its agreement with HealthEquity allows Principal customers with an HSA through HealthEquity to have the option to access a consolidated view of their financial picture. The Retirement Wellness Planner currently allows people to link to information for other investment accounts to see their full financial picture in one quick snapshot, but this move will bring health care savings into the picture.

“There’s a tremendous benefit in being able to take a holistic view of your financial picture,” said Joleen Workman, vice president of customer care at Principal. “And with health care costs being a top concern for employers, employees and retirees, it’s an important piece of overall retirement planning.”

Like Murphy at Franklin Templeton, Workman said Principal will continue to work with other leading HSA providers to bring a simplified approach to more employees in the workplace. She also noted that, in addition to the HSA enhancement, Principal Milestones, a new plan-focused financial wellness offering from Principal, now includes educational resources on HSAs “to help people use them to their fullest, which may include using the funds for retirement health care costs.”

“More than seven in 10 workers say it would be helpful if their workplace offered education on planning for health care expenses in retirement,” Workman said.