Products April 19, 2022

George Washington University Partners with Edelman on Financial Wellness

The financial wellness program, Fast Track to Financial Health, is being deployed to nearly 30,000 employees at a Fortune 25 company.

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Edelman Financial Engines, an independent wealth planning and investment advisory firm, has announced a new partnership with George Washington University’s Global Financial Literacy Excellence Center.

The initiative involves the launch and study of a new financial counseling and education program called Fast Track to Financial Health. As a start, the program is being deployed to nearly 30,000 employees at a Fortune 25 company. According to the organizations, the goal of this effort is to gain insight into the financial health of employees while providing them with valuable financial counseling and tailored resources, all meant to address pressing financial needs and encourage overall financial wellness.

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“Employees are increasingly looking to the workplace for assistance with their financial health and well-being,” says Kelly O’Donnell, executive vice president at Edelman Financial Engines and head of its workplace business. “The cornerstone of our business is providing employers with innovative solutions that can improve the financial outcomes of their workforce.”

To create a benchmarking mechanism to define and measure financial well-being, Edelman Financial Engines partnered with the Global Financial Literacy Excellence Center and used data from the National Financial Capability Study to establish an empirical assessment, which they call the “Financial Health Status Indicator.” This index serves as the backbone of the Fast Track to Financial Health program, which consists of three steps. The first takes employees through an initial assessment to generate a baseline score, and the second provides personalized counseling and access to educational resources based on that score. Finally, the program assesses the impact of this intervention with a focus on both short-term effects and future anticipated changes in financial health.

“Our recent research found that financial literacy can be protective against financial errors and stress in later life,” says Annamaria Lusardi, university professor at GWU and GFLEC’s academic director. “Partnering with Edelman Financial Engines on this innovative research project with a major employer will not only help us better understand financial behaviors of employees but also provides thousands of employees with much-needed financial education.”

The Fast Track to Financial Health program is launching in April in conjunction with Financial Literacy Month, the initiative established more than two decades ago to raise awareness of the importance of financial literacy and the need for effective financial education.

The Edelman Financial Engines program is structured as a six-week challenge, concluding in early June. GFLEC will be analyzing and benchmarking the findings to assess Edelman Financial Engines’ impact on an employee’s overall financial well-being. The key findings of the research are expected to be released later this year.

Ask the Experts April 19, 2022

Receipt of a Power of Attorney for a Plan Participant

Experts from Groom Law Group and CAPTRUST answer questions concerning retirement plan administration and regulations.

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“We just received a request from our 403(b) plan recordkeeper for a Power of Attorney to be reviewed and approved by an authorized representative of the plan. It is for the daughter of one of our former employees, and the former employee does indeed have an account balance in the plan. Should we just review it for accuracy and approve it or have outside counsel for our retirement plan look at it?”

Charles Filips, Kimberly Boberg, David Levine and David Powell, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:

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A Power of Attorney, or POA, is a written document or other record where someone (i.e., the principal) authorizes one or more individual(s) (i.e., the agent(s) or attorney(s)-in-fact) to act on behalf of the principal regarding financial or other property matters, such as retirement plan matters, tax matters or general business matters. A POA is often used when a participant has become incapacitated or has otherwise determined he or she needs to empower another individual to act on his or her behalf. 

A request to review POAs for plan participants who wish to delegate to an agent authority over their retirement plan matters is not uncommon for plan sponsors, but the process can create administrative issues. Since a POA is a legal instrument under state law, someone needs to determine that the POA is valid under state law, where the requirements vary from state to state; presuming your recordkeeper does not offer that service, then it would indeed make sense for your outside retirement plan counsel to review.

Some other potential issues should be mentioned as well. First, someone should verify that the participant is not deceased, since durable powers of attorney expire upon a participant’s death. Even if the POA does not appear to be suspicious on its face, plan sponsors can’t be too careful and must ensure that the document’s pages are in order and that identity verification procedures are followed. Also, if the agent—the participant’s daughter in this case—is not the sole named beneficiary for this participant’s account, you should inquire of counsel if you need to inform the named beneficiary or beneficiaries of the POA, since the POA could affect their rights as beneficiaries to the participant’s death benefit.

 

NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

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