Financial Wellness 101

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In 2010, 75% of Americans nearing retirement age had less than $30,000 in their retirement accounts. Whoa! Besides the daily stress factor, financial concerns can be a distraction during work hours and can contribute to increased employee absences, health problems, and higher company healthcare costs.

What's Going On?!?

Even though we all want to focus on the important aspects of retirement – where to travel, where to live, when is the next tee time – concerns are growing over medical costs and long-term care, as well as current job retention, large debt, and increased living expenses. According to the 2013 Employee Benefit Research Institute (EBRI) Survey, 49% of respondents feel they are "not too" or "not at all" confident they will be able to retire comfortably. The upside to this (if there is one) is that employees are turning to their employer for financial education and long-term planning support. And get this – they are responding!
Employers are recognizing the significant value in offering low-cost and easy-to-implement financial planning programs, including on-site money management and financial planning seminars that cover a range of topics. By offering these programs, employers are building loyalty, increasing productivity, reducing turnover, and improving job satisfaction.

Employers are also turning to PEOs (Professional Employer Organizations) to help them in providing strong, diverse savings and pension plans as a benefit for their employees.

PEOs, such as HRi, are a viable resource when it comes to retirement planning. We offer and administer the mechanics of the plans and assist employers and employees in implementing them. Our in-house pension administrator will monitor, track, and administer employer plan activity, answer questions, and refer an employee to a financial planner for certified, professional advice, if needed. Our subject matter expert can answer a number of basic plan questions, including:

  • What is a defined contribution plan?
  • What is a matching contribution?
  • What is vesting?
  • What is a Safe Harbor Plan?
  • What is a 401(k) plan?
  • What is a 403(b) plan?
  • What is the difference between a 401(k) and a 403(b) plan?
  • Can I change my investment amount?
  • How can I use the money before I retire?
  • How do Roth and standard plans differ?
  • Is my plan a good opportunity and why?
  • How is my money invested?
  • Must I contribute to my plan?
  • What if I leave my job?
  • What if I need my money before I retire?
  • When do I pay tax?
  • When must I take the money out?
  • What is an eligibility period?
  • Can I stop my deferral at any time?

HRi can help with fundamental questions on retirement plans but we have to leave the technical analysis and responses to qualified financial planners. This doesn't mean you have to run out and hire a Charles Schwab consultant; in fact, far from it. As part of the PEO service, we offer a multi-employer plan that includes certified financial planners that are just a phone call way if you should need it. But again, you will only need to call the planner if you have a specific question for personal financial advice. Otherwise, we can handle it.

By having an effective and well-rounded financial program, employees have the resources to develop stronger financial health, which can contribute meaningfully to the company's long-term financial wellness as well. Offering these plans is enticing and with a PEO effectively administering the plan, your company becomes an employer of choice.


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Guest January 22 2018