A shared interest in helping plan participants move the dial on retirement readiness as well as general financial behavior sparked State Street Global Advisors (SSGA) and Benz Communications to partner in an unusual venture: a day-long “hackathon” for plan sponsors to share concerns and insights on their employees’ financial behaviors.

At the end of the December session, SSGA and Benz had, with the help of their Fortune 500 plan sponsors, six steps that organizations could use to bring financial wellness to their own employees.

For the past 10 years since the Pension Protection Act (PPA), the retirement industry has been tightly focused on improving the 401(k) plan, says Megan Yost, head of employee engagement, global defined contribution (DC) at SSGA. In the wake of the PPA, plan sponsors began to implement auto features and use plan design to improve outcomes.

Another driver of the growing interest in financial wellness is the rise of high-deductible health care plans, says Jennifer Benz, founder and chief executive of Benz Communications, which is pushing this to be more of an issue for companies. “More workers in high deductible health plans has unintended consequences on the financial side,” Benz tells PLANADVISER, noting the connection between an employee’s finances and health care benefit design.

“The next step is continuing to help people use the plan to the fullest extent,” Yost tells PLANADVISER. “If people are hampered by loans and poor financial habits, they can’t fully utilize the plan.” Sub-optimal financial habits are partly responsible for what Yost says is a huge shift in plan sponsors’ desire to help people address their immediate concerns in order to improve financial habits. 

NEXT: Taking the financial pulse of the workforce.

“We heard from our clients about financial wellness becoming an increasing area of interest that they wanted to take on, but didn’t know how to tackle,” Benz says. “What is it? How can organizations harness it?” Amazingly, she says, they were able to get 12 senior benefits people to show up for a day filled with energy and enthusiasm.

The group had a number of initiatives. They wanted strategies for providing wellness in the workplace and a toolset of offerings to integrate behaviors that would lead to financial wellness. They wanted programs to be holistic and to help reduce financial stress, and they wanted to improve their employees’ financial lives by helping them make sound financial decisions.

A good place for plan sponsors to start is to understand the financial landscape by surveying their work force's financial stresses and priorities, both at home and at work, in developing a financial wellness strategy. Debt, budgeting or simple financial literacy could be hampering financial stability—but it’s critical to know which takes priority in building the plan.

Companies must determine what financial wellness means for the organization by first deciding how they’d like to influence their work force. Programs should aim to meet a range of needs, and benefits teams can consider aligning overall rewards and benefits programs with employee well-being.

Corporate budgets and resources vary, but the group recommends the following as critical best practices: implementing benefits that engage and matter to employees—for example, 401(k) matching contributions; using smart benefits design, including automated plan features; segmenting financial solutions and communication, to target employees at diverse income and financial knowledge levels; and communicating year round to ensure messages stick. 

NEXT: Financial wellness can have a measurable ROI.

Building a business case is another key step. A wide body of research concludes that workplace health and wellness programs have saved up to $3 for every $1 spent. While financial wellness differs from physical wellness, the group recommends framing the case for financial wellness programs in similar terms, including decreased absenteeism and increased productivity.

Many plan sponsors assume that it’s just the high-tech companies or organizations with a lot of money to spend on benefits that are interested in financial wellness programs, but that’s just not the case. “There is a business case to be made in every industry,” Benz says, “because of the productivity and work force management issues.”

An interesting outcome of the day, Benz says, was how hands-on these plan sponsors were, and the extent to which they wanted to have a role in helping their employees. “That feels paternalistic,” she admits. But the plan sponsors said that taking care of their employees is part of being an employer of choice, since financial wellness programs can be used to address recruiting, acquisition and retention.

A surprising finding was that some of the challenges and financial conditions employees experience have little to do with salary: Some highly compensated employees struggle with finances and live day to day, Benz says, because of their spending habits.

“We wanted to share emerging best practices around financial wellness with plans of all sizes so they could start learning from the lessons of the largest plan sponsors,” Yost says.

Twelve Fortune 500 company reps in benefits or human resources (HR) took part in a day-long session hosted by SSGA and Benz Communications to brainstorm ideas to bring financial wellness to the workplace. The project is slated to reconvene each quarter, by phone or in person, to monitor progress and continue sharing insights.

The full report with the recommended six best practices from the group, plus a supporting infographic on U.S. financial wellness, is free for download here.