In The Worksite

Re-Enforcing Financial Wellness For Employees

Providing long-term support when the short-term makes it complicated

by Dan Keady

Mr. Keady is Chief Financial Planning Strategist with TIAA. Visit

The COVID-19 pandemic significantly impacted the American corporate landscape. In addition to navigating financial and operational challenges brought on by the novel virus, employers are also now working to provide enhanced support and resources to their employees. In fact, a majority of employers say they feel a high degree of responsibility for their employees’ financial and physical health and are working to increase their focus in both areas, according to our recent survey.

Even with this heightened focus on health and financial wellness, employees continue to struggle. Many say that while they recognize their employers’ renewed focus on health and safety, they don’t see an increase in focus on their financial wellness. Employers are singing a different tune. More than 69 percent report they have tried to increase their focus on employee financial wellness, and 60 percent say the same regarding efforts to improve retirement preparedness.

At a time when many Americans are working to balance their short-term financial needs with longer-term savings goals, it is unfortunate that employers’ efforts to improve their financial wellness are obscured. But the possible disconnect does suggest just how well-advised plan sponsors are to keep a strong, consistent focus on the full spectrum of issues and needs that shape employee wellbeing – with a focus on their financial needs first and foremost – even when extraordinary circumstances might compel a shift in emphasis one way or another.

Our research points to several ways you can keep making clear your concern across the board for your employees and nurture the good will created when employees appreciate that you genuinely have their best interest at heart, even in the most challenging times.

Stay Clear-Eyed About Your Employees’ Financial and Retirement Knowledge

The COVID-19 pandemic has created a variety of new financial pressures for employees they may not feel fully prepared to manage. While most employees view their financial abilities as average or above, employers still tend to overestimate their financial knowledge. The gap is particularly glaring in the areas of financial and investing knowledge and their ability to plan for retirement – with employers overestimating employees’ actual abilities by double-digit percentages. These differences might simply reflect an optimistic belief in one’s employees, but overestimating financial acumen can result in under-providing for employees. Accurately gauging what your employees do and don’t know is critical to aligning your level of support — so be sure to ask them.

Keep Sight Of Employees’ Enduring Concerns About Saving and Retirement

Saving for retirement is often cited as employees’ top financial goal, and 2020 was no different. Even among all of the other issues that last year brought, employees were still most concerned about not saving enough for retirement and the risk of outliving their retirement savings. But employer concerns about these issues actually dipped in 2020 compared with 2018; more sponsors said they were concerned about tax penalties from retirement plan early withdrawals and loans, no doubt reflecting the immediate financial stresses many employees were facing and considerations they may have made to make withdrawals from their retirement savings to cover day-to-day needs. In a crisis, issues of the moment unquestionably demand more mind share – but keep in mind that, at the same time, more fundamental needs won’t lose their force.

The COVID-19 pandemic has created a variety of new financial pressures for employees they may not feel fully prepared to manage. While most employees view their financial abilities as average or above, employers still tend to overestimate their financial knowledge...

Don’t Underestimate The Value Of The Most Basic Kinds Of Support

While employers are actively working to help employees save more for retirement, it’s also an area where they say they could use the most assistance – especially in debt management, debt counseling, and personal budgeting. But what employers need support with is perhaps more than the kind of support employees are looking for: basic, fundamental financial and retirement support. Our research shows that just offering tools to help employees visualize and attain their desired retirement lifestyle helps with develop a retirement strategy. And financial education resources designed to help employees better understand a retirement plan’s investment options can ultimately improve overall financial wellbeing. By keeping the simple bases covered, you’ll strengthen lasting regard for your efforts to improve your employees’ financial outcomes.

Address Today’s Most Urgent, Emerging Need: Secure Retirement Income

When it comes to the kinds of support that employees really value, topping the list is “programs offering ways to obtain guaranteed income in retirement.” More and more employees have become sensitized to the fact that, with rising longevity and rising healthcare costs in retirement, outliving their retirement savings is a real risk. They want access to tools specifically designed to create a sustainable, life-long income stream from the assets they have diligently accumulated over their employment. With the passage of the SECURE Act in late 2019, hurdles to delivering income-generating annuities within defined contribution (DC) plans have come down. Yet, according to TIAA’s research, only about half of sponsors are currently offering this option. Filling the income need should be at the top of every sponsor’s list of action items for reinforcing participant appreciation for the DC offering.

Remember That “One Size Does Not Fit All”

With all of the uncertainty that employees experienced over the past year–both financial and otherwise–and that has continued in 2021, it’s hardly surprising that 51% say they would like their retirement plan information and resources to be more personalized to their individual financial situations. Yet, just three in 10 say they receive highly-personalized retirement-related information from their plan provider.

Personalization can take many forms. Employers and plan sponsors have long worked to address the reality that the financial concerns and needs of employees vary widely across specific workforce demographics and from employee to employee, based on individual circumstances such as life stage, accumulation to date, and debt levels, etc. But there are personalization tools that can be introduced efficiently and consistently across the entire participant population, and ones that can even generate greater plan engagement.

For example, employees surveyed by TIAA said that “a retirement income calculator or projection” was their top motivator for increasing plan contributions – something three in 10 employees did in 2020. The finding suggests that any employer or plan sponsor resource that provides employees with customized, practical insights into their specific financial situation–with steps that can show them how to achieve their financial goals–can have a real, positive impact on financial outcomes.

Take Comfort From The Fact That You’re Not Alone

If you feel you could do with some help in better supporting your employees’ financial wellness, don’t doubt that your peers feel the same way. In addition to feeling as if they could use assistance with providing employees with financial resources on saving for retirement and managing debt, many employers are also concerned about financial security issues and ensuring their employees can sufficiently save enough for retirement. This is especially true in regards to employers’ concerns for their younger employees, who may have been more deeply impacted by the economic volatility created by the pandemic.

Helping sustain employees’ financial health and wellbeing always will be a challenge, especially when shorter-term events require employers to shift their attention to address the immediate needs of their employees over longer-term goals. But help is out there, and new and better insights and methods for addressing employee concerns are coming along all the time. Employees will always value your efforts to improve their physical and financial health and are primed to reward those efforts with their loyalty and commitment in a post-pandemic environment.


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