Administration June 7, 2019

PSNC 2019: Engaging Employees With Benefits Programs

Plan sponsors are meeting participants ‘where they are’ to promote financial wellness.

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(From left) David Hinderstein, Strategic Retirement; Barbara Delaney, StoneStreet Renaissance; Maura Troy Coolican, Morgan Stanley. Group Photograph by Matt Kalinowski


When you pursue wellness, it has a ripple effect. If you help someone with his health and wealth it will not only help your corporation but also the person’s co-workers, family and community as the person becomes less stressed out. That’s why this is such an important topic for us, said David Hinderstein, founder and president, Strategic Retirement Group and moderator of the panel “Engaging Employees With Benefits Programs,” on the second day of the 2019 PLANSPONSOR National Conference (PSNC) in Washington, D.C.

As companies expand both their health and financial wellness programs, they are exploring new communication channels and methods to connect with employees. A recognition that stress over debt and financial issues can be just as detrimental to physical health as an illness has led employers to expand employee well-being programs to create a healthier and more productive workforce.

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How are employers embracing opportunities to create holistic wellness programs, emphasizing both physical and financial health? And what are the key components that drive adoption of, and engagement with, such a program?

Barbara Delaney, principal, StoneStreet Renaissance (SS/RBA), said, “Our definition of financial wellness is living within your means. Part of the issue we see is a lack of budgeting. We tell people to lower 401(k) contributions and pay off credit card debt. We see older participants paying off children’s student loans and putting themselves at risk by sacrificing their retirement.

“This is becoming more prevalent in discussions about financial wellness, and these are some of the things we’re addressing,” she said. “It’s like what they say on an airplane, the flight attendant instructs you to put your oxygen mask on first, before helping others. This is an important metaphor for those of you who run around taking care of everything and everyone else except yourself.”

She concurred that companies are paying more attention to their employees’ health and wellness and offering health savings accounts (HSAs) is part of it.

Maura Troy Coolican, managing director and head of retirement plan solutions, Morgan Stanley, said demographics are critical. “For instance, our [intern] summer analysts are going to have very different needs than older employees. How do you look at your employee base and provide them the best wellness offering you can?”

Student loans and credit card debt are components of the financial situation of a younger demographic. “We use ‘assisted financial coaching’ for this group from our financial wellness program ‘My Secure Advantage,’ to help younger employees think through decisions,” Coolican said.

She added that having company executives set the tone, from the top of the organization down, is critical to promoting wellness engagement. She suggested communicating about these benefits via email correspondence and webinars.

Delaney said some plan sponsors use programs that give employees points for completing certain financial wellness tasks. Incentives may include, for example, lower-cost health care premiums for the next year or free yoga classes.

A manufacturing client of Delaney’s offers webinars on financial wellness topics once a month for employees who work on a factory line. They can listen to the content during their lunch hour, as they can’t take a break from their work otherwise. These employees can also call a help line for answers to their financial questions and speak with a financial coach.

Morgan Stanley offers a virtual adviser. This is another way to support employees who may prefer robo assistance, still giving them the quality and depth of Morgan Stanley’s adviser network, Coolican said.

Session attendee Dan Milfred, senior vice president and chief financial officer (CFO) for Pacific Woodtech Corp., mentioned that his company recently changed recordkeepers, and participants can now view, on one screen, their HSA and 401(k) account totals. This they find to be a useful savings tool.


Administration June 7, 2019

PSNC 2019: From Engagement to Action

A self-professed “ERISA nerd” looks beyond the rules and regulations to ask what plan sponsors can do to promote genuine engagement in the participant population.

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Catherine Golladay, Photograph by Matt Kalinowski


Catherine Golladay, senior vice president and chief operating officer at Schwab Retirement Plan Services, is a self-professed regulation wonk who loves to analyze the myriad rules and requirements coded into the Employee Retirement Income Security Act (ERISA).

However, during her presentation at the 2019 PLANSPONSOR National Conference in Washington, D.C., titled “Financial ownership: Helping participants move from engagement to action,” Golladay said she has in recent years been focused on expanding her outlook to think more about how such rules and requirements influence participant outcomes. She pointed out that reforms brought about by the Pension Protection Act of 2006 have had a major positive impact on the U.S. retirement system, and the fact that legislation pending in the Capitol could soon bring about another round of sweeping reforms. But in an important sense, she said, policy developments in themselves will never be enough to ensure positive participant outcomes. 

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“I was such an ERISA nerd early on in my career, I’ll admit, but when I came to Schwab, I realized I wasn’t doing enough to understand participants on a personal level,” Golladay said. “I realized I wanted to do more than just help plans meet their regulatory requirements and instead help participants in a holistic and meaningful way.”

Golladay pointed to recent Schwab survey results showing nearly 60% of Americans are currently living paycheck-to-paycheck. Many of these people say they have no emergency funds whatsoever. 

“While our focus is on retirement plans, we have to understand that so many of the individuals we want to serve are only one or two issues away from serious financial hardship,” she said. “Just look at what happened with the recent government shutdown, when thousands of Americans had to forego a paycheck for almost a full month. That event grabbed the headlines, but we also have to acknowledge that these types of income interruptions are happening every day to our co-workers, family and friends.”

Golladay said this is a critically important issue that employers have a stake in addressing, as one in four Americans say that financial stress impacts their health and work performance. The same fraction says their personal finances have recently been a workplace distraction that has damaged their productivity.

“The point of all this is to say that plan innovation must be tied to participant outcomes, and we need to acknowledge where our innovations may actually be bringing about unintended consequences,” Golladay said. “I like to use the example of the popularity of automatic enrollment as popularized by the Pension Protection Act [PPA]. Auto-enroll has increased the number of people who are saving by quite a lot, but it is still too common to see plans auto-enrolling their workers at or below 3%. We know this is not high enough to promote retirement readiness.”

According to Golladay, there is actually evidence that shows a 3% auto-enrollment rate can result in lower average contribution rates versus a fully voluntary sign-up plan. Automatic enrollment plans, she explained, may have higher participation rates, but a high and growing participation rate alone does not create a successful plan. She encouraged plan sponsors to think hard about the incentives they have purposefully or accidentally programmed into their plan designs, to ensure that participants are truly put on the right track.

“We know that roughly half of employees choose their contribution rate based solely on the employer match or the rate set by their employer’s automatic enrollment,” Golladay said.  

Golladay went on to tell the story of a Schwab client that recently enacted a “take one action” campaign. The campaign was comprised of town hall meetings featuring key company executives and Schwab representatives, along with “mix-and-mingle” happy hour events targeting younger employees. Additionally, the campaign included in-person workshops and recorded webcasts on specific topics having to do with financial wellness and retirement. One-on-one consultations also were used.

“After the event, 70% of those who changed their Roth deferral made deferral increases,” Golladay said. “More than 100 employees changed their investment selections, and 4% more of those eligible to receive financial advice started doing so.”

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