Financial wellness is a hot topic in the employee benefits world, but it’s often hard to define and even harder to implement. Tom Woods, SVP of sales at Fidelity Investments, tells PLANADVISER that it is one component of a holistic benefits program that ultimately aims to improve the well-being of employees.
He says providers are bundling different offerings to target specific challenges employees may be facing including student debt, which currently stands at record levels. Moreover, studies show working adults are tapping into their retirement funds to pay for their children’s college expenses.
“Five or 10 years ago, just talking about retirement was efficient,” Woods explains. “Now, employees want you to help with them with broader set of needs and in areas such as debt management and student loan repayment. Help on the front end of that so they’re not robbing their retirement.”
He adds that for “for those employees entering the workforce who have accumulated student debt, that’s the most challenging financial aspect of their life.” To address these needs, Woods suggests incorporating a student-loan management program into a total financial plan that takes into account savings and budgeting.
“Companies are starting to be very innovative in thinking about how they can offer student loan repayment programs as a benefit. For instance, we recently expanded our own benefits offerings to help new employees pay down student debt. It has been a very popular program, and it’s had interesting business results. It’s a contributing factor to reducing the amount of turnover. It’s been a very powerful retention tool.
In fact, some studies show employees value such programs even more than 401(k)s. And the issue of student debt is not an only a Millennial and Generation-X problem. Studies show this is even weighing down Baby Boomers and their capacity to save for retirement.