What Can a Financial Wellness Program Accomplish?

Tim O’Neil, employee health and financial wellness manager for Meredith, says the company’s defined contribution (DC) retirement benefits offering features the next level of comprehensive financial wellness education and personalized retirement readiness scoring. The program supplies each participant with a robust annual retirement readiness assessment, he says, as well as access to frequent onsite and online financial planning workshops with skilled adviser resources. The firm even organizes incentive programs that track and reward employees’ progress toward personalized goals—with everything tied together on an integrated online platform that can constellate an employee’s entire health care and financial picture for comprehensive planning.

O’Neil leads the financial wellness effort alongside a small team of HR staff and consulting resources, and he says administering the program takes up a fairly significant amount of his time on a weekly basis. The work is made easier by Meredith’s relatively large size, he says. The firm has more than 3,200 employees—giving O’Neil the ability to cultivate internal benefits administration and optimization experts to keep the program running smoothly. It is also beneficial that the firm’s CEO and other high-level executives have taken a strong interest in Meredith’s retirement benefit offerings, he says.

“They know that the health and the performance of our company are directly related to the financial well-being of our employees,” O’Neil says. “In fact, the reasons why we started our financial wellness initiative go back to 2008, when the markets started going down and our CEO came to me directly and said, ‘We need to take action now to help our employees keep their financial house in order.’ Those were his exact words.”

After some initial searching for a prepackaged financial wellness program, O’Neil and his team decided they would have to build a custom program to get the right features for the firm’s unique employee base (see “Building an Effective Financial Wellness Program”). This led to a partnership with the Personal Finance Employee Education Foundation (PFEEF) to establish a benchmarking tool to track the level of financial stress experienced by Meredith employees, he says. Meredith also engaged with another service provider, J.P. Morgan Asset Management, to plan and deliver advice and investment models.

“The annual financial wellness checkup we developed with PFEEF is the foundation of the entire program,” he says. “Employee(s) and their spouse or domestic partner have the chance to take an initial online financial wellness checkup, and that lets us know, how stressed out is the work force and what are the opportunities we have to improve [an] employee’s financial picture?”

The checkup is used to produce a recommended course of action based on the retirement plan investment menu and other benefits resources available through the Meredith system, O’Neil says, adding that this is where the importance of establishing a relationship with a strong advisory firm and a good recordkeeper comes into play. 

“Whether it’s someone just starting out who is struggling to make a monthly budget and figure out how to make rent, we can help with that,” O’Neil says. “Or if it’s a more seasoned investor who wants to optimize [his] employee benefits program and investment strategy, we want to offer direction on that, too, whether it’s through a live workshop or an online session or a digital portfolio tool.”

The early implementation of the financial wellness program modeled a successful health-based wellness initiative adopted several years earlier, O’Neil says. “The main lesson coming out of the earlier health program was that the communication effort surrounding the new financial wellness effort would be every bit as important as the characteristics of the program itself,” he explains. “Because if the employees don’t know about the financial wellness offerings or they don’t understand what they are, how can they be expected to value or take advantage of the benefits?”

In a way, the firm was able to leverage the financial crisis and the worries many employees had about their finances to give a boost to the financial wellness program launch, O’Neil says. “We made it clear to the employees that, this program is our response to the financial pressures you as an individual employee are feeling,” O’Neil says. “We first had to make sure employees knew that we wanted to help them establish a personal financial plan.”

Following the initial expense to develop the digital architecture and consulting resources necessary to get the program off the ground, the financial wellness initiative has not been prohibitively expensive to run. O’Neil says the firm has actually been able to save money over the long run on plan expenses and insurance premiums as employees make better decisions about their health and financial welfare.

In addition, the impact on employee retirement readiness has been huge, he says. Meredith has won four national awards since 2010 for driving improvements in work force retirement readiness, and the program has been highlighted in multiple industry publications and national magazines.

Getting specific, O’Neil says the program has driven down the number of Meredith employees who say they face high financial stress—from 22% in 2010 to just 8% this year. Those facing high levels of cash flow stress fell from 41% to 22% over the same period, leading to similar drops in employees who report feeling distracted by their finances during work hours.

According to O’Neil, other positive behaviors have emerged beyond the retirement plan, resulting in a happier and more highly motivated work force. For example, in the past 12 months, nearly six in 10 employees increased recurring allocations to an emergency savings fund, and almost the same number formulated or reviewed a specific spending plan or budget. Employees have also widely reduced their consumer debt and are adopting prudent, age-based asset-allocation strategies while increasing retirement plan contribution rates.

“So, in our eyes, it has been a clear win-win for the company and the employees,” O’Neil says.