SURVEY SAYS: Financial Education in the Workplace

Last week, I asked NewsDash readers, “Does your firm provide employees with overall financial education, how is it provided and what do employees need most?”

Nearly 79% of respondents are in a plan sponsor role, 7% are advisers or consultants, 10.7% work for TPAs, recordkeepers or investment managers, and 3.6% are attorneys.

Slightly more than 43% of responding readers indicated their firms provide general financial education—other than about the retirement plan—to employees. Nearly 7% said they do not, but are considering doing so, and half are not.

Where general financial education is being provided, 13.3% reported it is provided by internal staff, 26.7% said it is provided by the firm’s retirement plan provider, 6.7% indicated it is provided by the firm’s retirement plan adviser, and 53.3% reported it is provided by a third-party financial education provider.

More than half (53.3%) of responding readers said their firms deliver financial education via classes/seminars, 60% through content on the company website or other Internet sites, 13.3% via mailings to employees’ homes, 26.7% by email, and 40% through one-on-one counseling. Those who chose “other” indicated general financial education is provided over the phone, via webinars, and with lunch-and-learns, newsletters and statement stuffers.

Asked which financial education topic they feel their firm’s employees need MOST, 29.2% selected ‘budgeting,’ while 20.8% chose ‘saving for retirement.’ Paying off debt and establishing emergency savings were each chosen by 12.5% of responding readers, and 8.3% said employees most need general investing education. Slightly more than 4% said none of the education topics listed were most needed by employees, and 12.5% indicated they didn’t know.

Among those who chose to leave comments about financial education in the workplace, most think it is a good idea, even if they think it is not the employer’s responsibility. A few noted what works and what doesn’t. Editor’s Choice goes to the reader who said, “After attending last week’s [PLANSPONSOR National] conference, I think overall financial wellness would help everyone and am looking into implementing in the months to come.”

Verbatim 

We use the plan provider, adviser and 3rd party to deliver education, not just one. I can't say which topic is needed most, as it depends on where the employee is in their lifecycle. It is important to offer ALL of the topics to hit all the needs.

Hopefully in the future the U.S. public school system will make financial education a requirement from an early age.

We have tried hosting several on-site meetings on various investment and general 401(k) education topics and get very little interest from employees. Then, of course, those that failed to come to a meeting complain to us that they aren't able to retire.

I personally agree that overall financial vs. retirement-savings-specific education is the better initial curriculum or at least should be optional curriculum for those who need it. If one is deeply in debt, saving for retirement seems impossible. Providing tools for debt reduction and expense minimization would free up funds for retirement savings. Then, the focus can shift to future needs.

We have found that our employees don't understand how credit works, how it affects their credit score and how much their credit score affects other things such interest rates, insurance rates, etc. I guess the real problem is the lack of understanding that money decisions made or not made have long range consequences on how much they pay to live life.

Most of our employees prefer that we take the information to them in face to face sessions

Not really an employer responsibility BUT a good idea in that employees that solve financial problems have more time and energy to do their jobs properly.

It’s tough to get employees involved in their future.

It would make sense that teaching employees to better manage, what is seen as the primary motivator for showing up every day, would be a priority for employers. i.e. If your people can handle their money, they will not think they need so much more.

Being a financial services company, we take this subject seriously. We have a resource center that is staffed all day -you can drop in or make an appointment for help with financial matters.

After attending last week's conference, I think overall financial wellness would help everyone and am looking into implementing in the months to come.

Hopefully there are others who, too, might be shaking their heads at the irony of "one touch" and nearly "auto" everything and the topic. Forgive my cynicism, but it doesn't take a rocket surgeon...

The only thing that seems to work is individualized analysis using their own specific situation as the backdrop. In other words, they seem to respond best to their actual numbers, not abstract concepts.