April 2 is National Employee Benefits Day, a good time to recognize the value of quality employee benefits. This year, the International Federation of Employee Benefit Plans is encouraging plan sponsors to use the annual event to focus on the coming retirement crisis and to “motivate participants to actively engage in their financial wellness.” The Personal Finance Employee Education Foundation (PFEEF) studied the link between financial wellness, emotional wellness and productivity in 2010. Employees with more financial distress reported more emotional health risk, defined as experiencing negative feelings to the point they affected normal functioning, and increased absenteeism from the workplace.
In 2006, the PFEEF estimated that employers could save approximately $450 in productivity and $300 in healthcare costs for every employee who improved his or her financial well-being. Unfortunately, the PFEEF found financial wellness decreased significantly between 2004 and 2012, with 48 percent of respondents reporting good to very high financial well-being in 2004, and only 24 percent saying the same in 2012.
What can employers do?
- Offer your employees a retirement plan.In private industry,64 percent of employees had access to retirement benefits in 2013. Employment status made a big difference in access: 74 percent of full-time workers had access, versus only 37 percent of part-time workers. Retirement benefits were available to 49 percent of workers in small establishments and 82 percent of workers in medium and large establishments.
- Encourage participation. If you already offer a retirement plan, encourage employees to participate. Only 49 percent of private industry employees actually participated in a retirement plan. Automatic enrollment is the easiest way to boost participation.
- Offer financial education. Don’t limit education to retirement savings; other financial topics, such as budgeting and smart use of credit, can help employees better cope with immediate financial concerns.
- Consider offering other benefits that help employees protect their finances, including voluntary life, disability, long-term care, legal and identity theft insurance. Worksite benefits can also include group rates on home and auto insurance and group rates on mortgages and personal loans.
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