Plan Sponsor Roundtable: The New Focus on Financial Wellness

Plan sponsors recently discussed how they have greatly expanded their financial wellness offerings to include such benefits as employee stock ownership plans (ESOPs), health savings accounts (HSAs) and rewards programs to encourage people to take such preventative measures as having an annual physical checkup or delving deeper into their finances through one-on-one sessions with financial planners.

Nancy Simutis, human resources (HR) director at Bohannan Huston Inc., told attendees of PLANSPONSOR’s virtual conference “What’s on the Minds of Plan Sponsors” that one of the things she is most proud of about the benefits her company offers to employees is its 10% match in the 401(k) plan. “Our company has a long history of trying to provide the best benefit package,” Simutis said.

Kelly Mutuc, vice president, talent management at Novaspect Inc., said her company views its ESOP as a critical component of its financial wellness offering, particularly with respect to how the ESOP shores up employees’ long-term financial stability.

“The majority of our employees are engineers who think more broadly and longer term about their financial prospect,Mutuc said. The ESOP, launched in 2016, helps with that, she added. Novaspect thought the ESOP would fit well with its “culture of ownership and accountability,” Mutuc said. “It is also great for job retention, especially for degreed engineers. It is a great benefit that makes us stand apart. It also inspires our employees to dedicate their time and energy to be part of our organization.”

In addition to this, Novaspect now has unlimited personal leave during which employees receive 100% of their salary, she said. Only a few employees a year take advantage of this benefit, so it is not that costly to offer—but the returns are tremendous, as it builds unparalleled loyalty among employees, she said. When deciding to implement this benefit, Mutuc said, the company realized that “life happens, and we don’t want one event out of a person’s control to derail their financial future. We think it is equitable for us to offer this to all employees, including remote employees and new hires.”

Novaspect also decided to pair its high-deductible health plan (HDHP) with better transparency into the various costs available for in-network services, provided through its benefits broker and health care plan administrator, Mutuc said. If an employee selects the lowest cost option, they are rewarded with a gift card, she said. “Overall, we have been able to keep our plan costs low, taking this approach, plus this ties into our theme of employee ownership,” she said.

Simutis said that up until five years ago, her company viewed all its benefits through the lens of its providers. With employees at all different career stages and having a myriad of needs, Simutis realized that it would be more beneficial for the company to view the benefits from the employees’ perspectives, which resulted in a much broader financial wellness program.

Any company can benefit from “helping people come to work at their best every day,” she said. This has resulted in the company offering an HSA and educating workers on the benefits of investing their money in these accounts, she added.

This new approach also led Bohannan Huston to develop four pillars to support decisions for its financial wellness program: financial, physical, emotional and social wellness. The company now awards points for positive behavior people take to improve these four areas and rewards them with gift cards valued at up to $500 a year, Simutis said.

Dawn Food has a similar points program, but it hands out gift cards valued at up to $900 a year, said Brian Coleman, vice president of total rewards at Dawn Food. This past year, the company also rewarded people for educating themselves about protecting against COVID-19, he noted.

In addition to all the other programs Simutis listed, she said one of the most impactful is the opportunity for employees to have one-on-one meetings with a financial planner from the company’s adviser, SageView. The company has also made it a point to encourage retirees to remain in the plan, she added. “SageView has been instrumental in helping our retirees develop a drawdown strategy,” Simutis said.

Likewise, Dawn Food views its financial adviser, UBS, as a great benefit for workers, Coleman said.

While many companies use the term financial wellness, Dawn Food calls its offering a “financial well-being” program  because it feels the former term is overused and, therefore, not well understood, Coleman said. For Dawn Food, this means buildings its workers’ resilience, financial well-being and physical well-being, he said.

Six years ago, before financial wellness became the hot topic it is today, Dawn Food began educating its employees about restructuring student loan debt and helping them create emergency savings accounts, Coleman said. Of course, these are popular topics today, especially now that the COVID-19 pandemic has exposed the fact that so few Americans have an emergency savings account, he said.

Recently, the company began offering hospital indemnity insurance, critical illness insurance and telemedicine, Coleman said.

Dawn Food will continue listening to its employees. As a result of employees expressing their needs in the past, this year the company will begin helping employees improve their credit ratings, Coleman noted.

These are just a few of the ways employers can improve the financial wellness of their employees and, as a result, improve their workers’ loyalty and productivity, the speakers said.