Yet again, 401k sponsors and participants are singing the praises of financial wellness programs—despite the fact that few workers take advantage of them.
More than nine out of 10 employers and employees think these types of workplace programs are effective, according to a study released today by Bank of America Merrill Lynch.
“Employers report financial wellness programs are paying off—leading to greater employee satisfaction, higher productivity and other benefits for employees and the firms they work for,” Lorna Sabbia, head of Retirement and Personal Wealth Solutions at Bank of America Merrill Lynch, said in a statement. “However, there is still room for progress in increasing employee participation.”
Only about a third of workers are taking advantage of this benefit when offered the chance—an unfortunately low figure considering 38 percent say they are struggling financially. Among employees under age 40, the amount is even higher. Forty-four percent are experiencing money problems.
Turns out, a lack of relevant content within the programming may be to blame for workers’ lack of engagement.
The 2018 Bank of America Merrill Lynch Workplace Benefits Report pointed to a disconnect between what 401k sponsors think participants want in a wellness program and what participants actually want.
For instance, “employers tend to focus on actions to manage immediate financial needs, such as budgeting and handling expenses. Meanwhile, employees most prioritize long-term financial goals, such as tactics that help them save and invest for the future.”
The growing trend of marrying health and wealth in wellness programs is apparently of little interest to workers, too. A mere 7 percent think health care is an important component of financial wellness.
So, what do 401k savers want?
“Employees are speaking loud and clear about their desire for programs that give them a holistic, personalized and measurable roadmap for achieving financial wellness,” Lisa Margeson, head of Retirement Client Experience and Communications at Bank of America Merrill Lynch, said with regard to the study.
Key findings mentioned in the report include:
- Employees feel the best approach to improve financial wellness is getting a personal financial assessment, supported by specific actions to take.
- Employees would also like help tracking and measuring their progress.
- Employees say advice from a professional would be best.
- 70 percent of employees say they would be comfortable sharing financial information, such as savings and investments, as part of an employer-offered financial assessment.
- 81 percent of employees say they prefer that financial wellness be offered as a bundled program rather than as stand-alone resources.
What’s more, Bank of America Merrill Lynch noted that 47 percent of women say they are less than financially well, compared to 29 percent of men, “underscoring the need for financial wellness programs that are tailored to a woman’s financial journey and life path.”
Jessa Claeys is a writer, editor and graphic designer.
