PLANSPONSOR - October/November 2021 - 4

Course Corrections
INSIGHTS
R
ecently, I was watching a presentation about
financial wellness education that's available for
children and adults, and the speaker said something
to the effect of: Financial education for adults
should be " a review not a revelation. "
I loved that thought. His point was that financial
literacy needs to be made available to more people
at a younger age in order to help set them up to make
strong financial decisions in adulthood. When we present benefits to employees
and they get their first paycheck, that should not be the first time they think
about spending vs. saving or how to allocate a dollar across multiple needs.
Unfortunately, that's the case for too many people.
There are many efforts to encourage personal finance and financial literacy
education. In June, CNBC reported that, at this year's midpoint, the Next Gen
Personal Finance (NGPF) bill tracker showed 25 U.S. states having, this year, introduced
legislation to add personal finance education to their high school curriculum.
Bills in Arkansas, Hawaii and Nebraska had been passed and signed into law,
while bills in four more states-Colorado, Nevada, Rhode Island and Texas-had
been passed and awaited governors' signatures.
What does this have to do with plan sponsors? The financial health of your
employees can have a significant impact on your company and employee base, as
multiple studies have shown: Financial stress contributes to poor health, which can
lead to absenteeism and other workplace concerns.
According to Bank of America's most recent " Workplace Benefits Report, "
released in September, " 95% of employers feel a sense of responsibility for the financial
wellness of their employees, up from 81% in 2015, and more than half (56%)
feel extremely responsible. " As those of us at PLANSPONSOR are well aware, financial
education and wellness programs are becoming a must-have part of a benefits
program-whether through your adviser, recordkeeper or a third-party provider.
The challenge is that, for many of your employees-as stated at the beginning-it's
still a revelation for them to start learning this at work. That's partly what
is driving the movement toward bringing financial education into schools-there's a
realization that most Americans are unable to make a budget, or understand how to
allocate money across different pots, or create an emergency savings fund.
A reason behind NGPF's mission to broaden school-based education is " school
is where life-changing financial education can reach all young people, not just the
lucky few. " It reminds me of the need to push for broader retirement plan access-
because we know that financial success in saving for retirement statistically is
dependent on having access to a payroll program that defers into a savings plan.
If access is the issue, is there a role for plan sponsors to assume to help? The
presentation I mentioned above was given by an investment manager; other service
providers are also pursuing similar initiatives. As a plan sponsor, you know how
valuable financial education is to your employees and how those with children or
grandchildren in their lives may want to help them get on the right path early. I
encourage you to ask your providers what materials there might be that you can
distribute to your employees for them to take home or that they can access with
their children. It will benefit everyone. -Alison Cooke Mintzer, Publisher
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