-Presented by-

Mark Singer CFP®, AIF® Best Selling Author & Founder of The Financial Literacy Toolbox

Greater Boston Corporate Wellness Forum 152 The Lynnway, Lynn, MA 01902

781-599-5009

WWCMA 2014 Conference Delivering the Financial Wellness your Employees Need

Audience Survey Question

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“Companies put ‘the cart before the horse’ in emphasizing

employee investment education. What employees first need

to do is to straighten out their personal financial mess.”

– Mark Nadler, Economist, Professor at Ashland University

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Financial Wellness Gap

A Lengthy Journey

ENROLLMENT

RETIREMENT

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Why it is financially smart

TO BE PROACTIVE… 10/21/2014 6

INCREASE THE BOTTOM LINE by Helping Distressed Employees

During Challenging Financial Times 10/21/2014 7

Employee Personal Finances

And The Bottom-line

Financially Illiterate adults do not manage their personal

finances very well…

And they do not save and invest enough for a financially

successful retirement.

This contributes to lower productivity as well as higher health

care costs.

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9%

39%

33%

16%

3%

Extremelyknowledgeable

Fairlyknowledgeable Somewhatknowledgeable

Slightlyknowledgeable

Notatallknowledgeable

Are Your Employees Preparing?

“People who fail to plan for retirement have half the

wealth of people who do” Dr. Olivia S. Mitchell – Pension Research Council

The Participant Magazine (2012). Annual SSGA 2012 Participant Survey Retrieved from

http://www.ssga.com/definedcontribution/us/docs/KnowledgePower%20SSgADC_The%20Participant02.

pdf

Employee Knowledge about Financial Matters

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Let’s Talk About…

Employee Personal Finances

Employer Bottom Line

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Employee Personal Finances

Retirement Saving Realities

Participation in and deferral rates to retirement savings plans

are inadequate

Most are not saving enough for retirement

Workplace education and advice programs have been

underutilized

Millions of employees say they cannot afford to save for

retirement, and 1 in 4 say credit card debt is a reason

Employees do not know how to help themselves

Employers do not understand the value of providing their

employees easy access to the best mix of quality financial

programs

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AND The Lack Of Financial Literacy Is

THE MAJOR REASON Why Employees Do Not Save For Retirement

“Financial Literacy” Is Knowledge About

Spending Plans

Credit Management

Savings

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30 MILLION AMERICAN

WORKERS – 1 in 4 –

report they are seriously

financially distressed and

dissatisfied with their personal

finances.

“These distractions and resulting

levels of stress affect EEs health

& productivity and perpetuate a

myopic view of the future”

Financially Stressed Employees =

Unhealthy & Unproductive Employees

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Price Waterhouse Company (2014.) Annual Price Waterhouse Financial

Wellness Survey Retried from: http://www.pwc.com/en_US/us/private-

company-services/publications/assets/pwc-employee-financial-wellness-

survey-2014-results.pdf

EE Financial Stress Rising

61% Dealing with

Financial Stress

Of those,

56%

Cite Stress Level

INCREASED Over

Prior Year’s 28% Price Waterhouse Company (2014.) Annual Price Waterhouse Financial

Wellness Survey Retried from: http://www.pwc.com/en_US/us/private-

company-services/publications/assets/pwc-employee-financial-wellness-

survey-2014-results.pdf 10/21/2014 14

Audience Survey Question

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High Stress Impacts Workplace 1/3 EEes Cite Financial Issues A Distraction At Work

Price Waterhouse Company (2014.) Annual Price Waterhouse Financial

Wellness Survey Retried from: http://www.pwc.com/en_US/us/private-

company-services/publications/assets/pwc-employee-financial-wellness-

survey-2014-results.pdf

EQUALS 12-20 hours per month

LOST IN WORKPLACE

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Stress Heightens for Majority of Employees

In 2011 the highest financially

stressed employee segment

$100K+

In 2012: $30K - $49K

40% stressed in this segment

in 2012

28% in 2011

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Research says, “Every time someone on your

work team brings his/her money worries to the team,

WORKPLACE PRODUCTIVITY DROPS”

Cultural Impact

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Annual Cost to Employers For

Ignoring One Worker’s Financial Illiteracy©

Lost productivity for each financially unwell employee $450 (a)

Higher health care cost for poorer health $300

Subtotal $750

Lost employer FICA savings on worker who does not join

health care reimbursement (FICA)

$92 (cash)

(c)

Lost employer FICA savings on

dependent care reimbursement (FICA)

$382

(cash)

(d)

Worker stays in expensive health plan $800 (e)

Total Opportunity Cost $2000 +

“Employer cost for not providing basic financial

education that changes behaviors and job outcomes is

$750 to $2,000+ per employee!” © Personal Finance Employee Education Foundation. Garman, T. (2008) Increase the Bottom Line by Helping

Distressed Employees During Challenging Financial Times (PowerPoint Slides) Retrieved from:

https://www.shrm.org/multimedia/webcasts/Documents/garman.pdf 10/21/2014 20

“Employers may not realize they can improve profits

–AND PROVE IT– by helping employees improve personal financial behaviors”

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Studies have shown that

RETURN ON INVESTMENT

for financial wellness training

in the workplace is

$2.8/1 AND MAY BE

MUCH GREATER*

* These calculations are reasonable estimates. Some numbers are very low estimates and ABC Company’s

Human Resources Department has the most accurate data. Decreases in accidents, workplace violence and

theft , and reduced fiduciary liability are additional ROI values that are not part of this ROI calculation,

although they could be and would increase the ROI significantly

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Integrate Wellness with

Retirement Plan

Use New Technologies to

Deliver and Measure Results

Develop Benchmarks For Future Success

The Tools To Use To

Change The Conversation…

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Participant Behavior

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56% Of Employees Prefer

On- Line Education

Financial Literacy Topics

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Comprehensive Data Usage

Activity Reports

Company & Individual Level

Date

Personalized engagement

score

% of video watched

Viewed downloads &

attachments

Name & email address

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Audience Survey Question

Basics of Investing

Financial Planning Basics

Mechanics of Budgeting

Psychology of Budgeting

Basics of Asset Allocation

Basics of College Planning

Coordinating Your Dream Team

Protecting Your Family (insurance/estate planning)

Setting Goals

How To Maximize Your Social Security Benefits

Nearing Retirement: What to Do

The Most Common Retirement Mistakes

Why It Is Important to Create a Bucket List

Coping With Death

How Women Can Take Control of their Financial

Planning

Intergenerational Conversations: How to Have Them

The Importance of Financial Organization

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Employee’s Desire For

Enhanced Financial Information

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Conclusion

Financial Stress = Unhealthy, unproductive workforce

Latest Stats illustrate impact of and rise in stress

Illustrations demonstrate the benefits of a solid wellness program

Happier, more productive employees

Health savings costs

Better prepared for retirement

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Go to Financial Literacy Toolbox

www.financialliteracytoolbox.com

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Footnotes

a. Based on reduced absenteeism and less work time dealing with personal financial concerns. See

research and press releases at www.PersonalFinanceFoundation.org

b. Conservative estimate as poor financial wellness and high health care costs are correlated; confirming

research underway

c. Employer saves $92 in FICA taxes that need not be paid the government because employee contributes

$1,200 to health reimbursement plan ($1,200 X 0.0765)

d. Employer saves $382 in FICA taxes that need not be paid the government because employee contributes

$5,000 to dependent care reimbursement plan ($5,000 X 0.0765)

e. Employer saves $800 for every employee who moves from traditional BCBS health care plan (for which

employer pays $6,000) to consumer driven health care (CDHC) policy which is less expensive for the

employer ($5,200)

f. Bagwell & Kim, 2008; Drentea, 2000; Drentea & Lavrakas, 2000; Garman et al, 2004; Genco et al., 1999;

Garman et al., 2007;l Jacobson et al., 1996; Lyons & Yilmazer, 2005; Kim, Sorhaindo, & Garman, 2004;

Prawitz et al., 2007; Shatwell et al, 2007.

g. Kim, Sorhaindo, & Garman, 2003; Prawitz et al, 2007; O’Neill et al, 2005 (2 articles); Sorhaindo &

Garman, 2002.

h. Garman et al, 1999; Kim, Garman, & Sorhaindo, 2003 (AFCPE and ACCI); Kim, Sorhaindo, & Garman,

i. 2004; O’Neill et al, 2006; Weisman, 2002.

j. Kim, Garman, & Sorhaindo, 2003 (AFCPE and ACCI); O’Neill et al, 2006; O’Neill et al, 2005 (2 articles).

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