6 steps to bring financial wellness to the workplace ① why financial wellness now? ② american...

6 steps to bring financial wellness to the workplace June 23, 2015

DC-2276

Speakers

Jennifer Benz Founder and CEO Benz Communications

@jenbenz

Megan Yost Vice President, Head of DC Participant Engagement State Street Global Advisors

Barbara Kontje Director of Retirement Americas & Smart Saving American Express Company

Jaime Erickson Executive Director, Retirement Benefit Plans Comcast NBCUniversal

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Agenda ① Why financial wellness now?

②  American Express story

③  Comcast NBCUniversal story

④  How we created the financial wellness framework

⑤  Six steps to build your financial wellness strategy

⑥ Q&A

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Why financial wellness now?

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Why financial wellness?

Of employees feel distracted at work

Of defined contribution participants report missing work to deal with the emotional stress caused by their finances

Of defined contribution participants feel they are living paycheck to paycheck

Of U.S. workers lack a savings cushion for emergencies

Source: SSGA Biannual DC Investor Survey. Methodology can be found in the disclosures. Proprietary and confidential, not for distribution DC-2276

American Express

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American Express

$34.2B Total 2014 revenue

Fortune 100 Company

Ranked 16TH Fortune’s Americas most admired companies

53,500 Employees globally 165

Years in the business 25

Countries that say we’re a great place to work

21,000 Employees in U.S.

Ranked #1 Eight Years in a Row JD Power & Associates

A quick look at who we are

DC-2276 Proprietary and confidential, not for distribution

Source: The above informa2on was provided by American Express on June 16, 2015

“It’s intimidating.” “It’s overwhelming.”

“I don’t know where to start.”

American Express

Declining RSP*/401(k) participation from

mid-80% to 70% in Q3 2009

Feedback from our employees and vendors highlights an unfulfilled

need

Utilization of services below expectation

* RSP is the Re2rement Savings Plan, the Company 401(k) plan

We heard that employees wanted to save but felt they couldn’t

The numbers in 2009 told a story, too…

DC-2276 Proprietary and confidential, not for distribution


Employee Engagement Employee Appreciation Promote Usage

•  Smart Saving “fairs”

•  Seminars and webinars

•  Launch Smart Saving on our intranet

•  Q&A tables on-site

•  1:1 financial & retirement planning meetings

•  Easy access to resources

•  Address employee irritants

•  Promote existing programs

•  10% increase in RSP participation

•  Increase utilization (e.g., financial planning and legal service plan)

•  Integrate with other internal Wellness program messaging (Healthy Living/Smart Saving/WorkLife)

American Express

Our goals Declining RSP*/401(k)

participation from mid-80% to 70% in Q3 2009

Feedback from our employees and vendors highlights an

unfulfilled need

Utilization of services below expectation

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Proprietary and confidential, not for distribution

4 categories of financial benefits

RETIREMENT SAVINGS PLAN

PROTECTION & PLANNING •  Evaluating Insurance needs •  Legal Assistance Plan •  Wills and Power of Attorney •  Health Savings Account

DAY-TO-DAY EXPENSES •  Financial Planning Services •  Deals and Discounts •  EAP •  Wellness Centers

FAMILY & KIDS •  Back-up child care program •  Secondary education resource program •  Back-up elder care program

Smart saving – an integrated approach to employee financial wellness

Proprietary and confidential, not for distribution DC-2276


American Express

RECENT ACTIVITIES

•  April 2015: Global Smart Saving Month. Innovation grant to launch AXP Smart Saving Month in 5 markets to promote our programs that support Financial Well-being

•  April 8 “fair” in NY with 9 Smart Saving vendors; partnership with Healthy Minds

•  Online global financial wellness assessment tool

American Express

We have met several goals…but we need to continue our focus

METRICS AND RESULTS

•  700 event attendees

•  200 clicks to the Outlook Reminder pdf

•  Visits to Smart Saving U.S. page on Square tripled in April

NEXT STEPS

•  Deep dive into vendor metrics (website, phone, program utilization, etc.)

•  Results of the Financial Wellness Assessment (FWA); find areas where employees need additional support

•  Targeted campaigns and educational communications based on analysis of FWA

•  Increase utilization of programs

•  Employee network connections



Comcast NBCUniversal

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*Minority interest and/or non-controlling interest.

*

*

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Source: The above informa2on was provided by Comcast NBCUniversal on June 19, 2015



Help all of our employees perform at their best

Help each of the company’s businesses perform at their best

Responsibly manage the investments that our businesses and employees make to our program

At Comcast NBCUniversal, benefits goals are tied to driving business performance

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Proprietary and confidential, not for distribution Source: The above informa2on was provided by Comcast NBCUniversal on June 19, 2015

People to assist in your health and financial journey

Benefit plans & programs to enable

physical, emotional and financial well-being

Do-it-yourself tools to personalize the experience

Benefit Plans: Health, dental, vision, voluntary, retirement

Benefit Programs

Health Assistants and Financial Counselors

Enterprise wide myBenefits website

Benefits experience focused on an “assisted consumer” approach

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Why financial wellness matters at Comcast NBCUniversal Business issue Impact of low financial

wellness U.S. benchmark statistics

Productivity Work absences 22% of U.S. employees admit to missing at least one day of work in the past year to deal with a financial problem

Distraction during work The 15% of the U.S. workforce that is “most financially stressed” spend 20 hours per month of work time dealing with personal financial challenges or crises

Medical costs

Stress-related costs

50% of all doctor visits are stress related with $11,000 to $15,000 average annual claims cost per financial stress-impacted employee

Digestive disorder costs

27% of the most financially stressed U.S. employees (referenced above) have ulcers or other digestive track problems (compared to 8% of rest of population)

Severe anxiety costs 29% of the most financially stressed U.S. employees have severe anxiety (compared to 4% of rest of population)

Turnover Recruiting and training costs

40% of voluntary employee turnover is due to stress and 50% of employee stress is related to financial stress

DC-2276 Proprietary and confidential, not for distribution Source: The above informa2on was provided by Comcast NBCUniversal on June 19, 2015


Observable measures of financial wellness suggest that financial stress is high in the Comcast workforce

Indicator of poor financial wellness

Comcast situation

U.S. benchmark Comcast situation as a multiple of U.S. benchmark

Wage garnishments 15% (or more than 15,000) of Comcast employees

10% (45% of these are due to revolving credit)

1.5 X

401(k) loans 30% of Comcast employees have an unpaid 401(k) loan

21% 1.5 X

401(k) hardship withdrawal

9% of Comcast employees have taken a hardship withdrawal in the last year

2% 4.5 X



The effect of “our” poor financial health

Reduced Productivity

Increased Turnover

Higher Medical / Rx Claims Costs


LAUNCH PROGRAM

2% of Payroll YEAR 1

3.2% of Payroll YEAR 2 AND BEYOND


Estimated savings

This represents millions of dollars of potential savings across the organization

Proprietary and confidential, not for distribution DC-2276 Source: The above informa2on was provided by Comcast NBCUniversal on June 19, 2015

At Comcast NBCUniversal, that means…

•  Re-positioning our focus on the interconnectedness of physical, emotional AND financial well-being

•  Packaging our financial products and services differently

•  Leveraging our media channels to personalize the experience

•  Let’s look at a few examples….

Our short-term strategy: Work with what you’ve got




Proprietary and confidential, not for distribution DC-2276 Source: The above informa2on was provided by Comcast NBCUniversal on June 19, 2015


Putting the pieces together

Step 1: Understand the financial landscape

Step 2: Define financial wellness for your organization

Step 3: Lean on best practices

Step 4: Explore established and emerging solutions

Step 5: Overcome challenges

Step 6: Build a business case

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Step 1: Understanding the financial landscape

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Financial wellness ecosystem

Step 1: Understanding the financial landscape

WORKING LIFE ECONOMIC LIFE PERSONAL LIFE

•  Wages •  Taxes •  Health Care •  Retirement •  Bonuses •  Wage Growth •  Child Care •  Tuition Reimbursements •  Wellness •  Concierge Services •  Supplemental Benefits

•  Income •  Housing •  Basic Costs •  Insurance •  Other Health Care Costs •  Education Costs •  Savings •  Debt

•  Lifestyle •  Habits •  Household Structure •  Commitments •  Stress •  Entertainment



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INCOME STRUGGLES

•  Lives paycheck to paycheck

•  Lowest paid workforce

•  Limited knowledge of finances

•  Multiple jobs

•  Poor credit

•  Risk for dependence on predatory products

•  Lacks savings cushions

Meet people where they are:



SPENDING CHALLENGES

•  Lives paycheck to paycheck

•  Claims to be financially literate

•  Does not manage cash flow effectively or have a budget

•  May have poor credit

•  Could be young and early in career

•  Has debt from credit cards, car loans and other purchases

•  Lacks savings cushions




BUILDING SAVINGS

•  Has a savings cushion •  Understands the importance of savings and is preparing for the future

•  Needs help fine-tuning budgeting and cash flow management skills •  Looks for ways to save on taxes

•  Wants to get the most out of workplace benefits •  May still need financial literacy and education support, with an emphasis on decision-intervention

communications and basic investing concepts




EXTRA INCOME

•  Among the top 20 percent of earners in your workforce •  Financially literate and thinking of the future

•  Owns a home or is likely to be in a position to buy one •  Has children and is saving for college

•  Thinks about — and takes steps toward — building retirement savings •  Looks for ways to save on taxes

•  Needs support with wealth management and investment decisions




FINANCIALLY SECURE

•  Is among the company’s most well-compensated

•  Looks for ways to maximize tax benefits

•  Is very interested in financial planning and wealth building

•  Has plans for unforeseen circumstances

•  Has prepared legal documentation, including a will, and named power of attorney and beneficiaries to accounts

•  May not fully understand the value of the total compensation package

•  May need assistance on additional retirement planning strategies

•  Prioritizes saving in retirement accounts, saving at maximum IRS contribution levels




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EVALUATE AUTOMATE & ESCALATE KEEP IT IN THE PLAN

Use plan data to get a better understanding of your employees’ participation, savings and asset allocation as indicators of financial disconnects. For example, are younger employees investing in conservative investments? Use that data to create interventions and communications to correct behaviors.

Inertia alone can hamper financial outcomes. Use automatic enrollment and automatic savings increases to nudge employees into better savings habits.

Hard-earned savings are at higher risk when employees can easily tap or cash out their retirement savings. Consider communicating the drawbacks of cashing out and make it more difficult for employees to make bad decisions.

1 2 3



Choose Benefits That Engage and Matter

Segment Programs and

Communications

Communicate Year-round


Step 4: Explore established & emerging solutions

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Step 4: Explore established & emerging solutions

Employer Tools Consumer Tools

•  Financial Wellness & Diagnosis •  Financial Counseling •  Concierge Services •  Emergency Savings & Loans •  Cash Flow Management •  Sophisticated Education & Budget

Management •  Simpler Investing •  Investment Education •  Leverage Financial Services in Existing

Benefits •  Credit Counseling & Debt Consolidation

•  Financial Action Plan •  Saving Games •  Full Financial Picture •  Bill Pay, Budgeting and Debt Management



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Considerations: Solutions:

Headcount and dollars are crucial to execute strategy and communications

•  Start small, promote what you have and track the impact of your efforts. •  Leverage your vendors to help you do more.

•  Make the business case for financial wellness to justify the need for more resources and budget.

•  Utilize HR for program delivery, and keep your benefit/compensation colleagues focused on strategy.

•  Evaluate and reprioritize current solutions; consider replacing some solutions with more focused alternatives.

•  Tweak off-the-shelf products.

How do you work with limited resources?




Making the experience easy for employees is critical for changing behaviors

•  Consolidate your resources into one easy-to-find place. •  Create a website with a dedicated financial wellness page.

•  Build awareness of where to go for information. •  Develop “just in time” communications so employees know about

available benefits when the need arises. This can take several forms — life events, new hire orientation, push notifications from vendors, etc.

•  Host a “vendor summit” to find opportunities to better integrate programs and communications.

How do you navigate complex, disconnected programs?




Competing priorities and “too many cooks in the kitchen” can make it hard to agree on your organization’s strategy

•  Utilize a strong financial wellness framework to keep parties grounded in the shared vision.

•  Focus on creating a strategy that ties to concrete goals. •  Work with your vendors to encourage collaboration.

How do you meet the needs of various stakeholders?




Limited attention spans on top of many learning styles, consumption preferences and demographics

•  Communicate year-round in smaller campaigns rather than focusing on getting a lot of information out at once.

•  Do something differently — change the look and feel of the messaging or the campaign theme — to grab attention.

•  Make benefits education part of mandatory training.

•  Communicate during life events. •  Use simple tools like webinars to get the word out frequently.

•  Tie financial education to “action required” events such as annual enrollment.

How do you get employees to pay attention to communications?



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Data points to measure:

Presenteeism Absenteeism Turnover

Employee Job Performance Medical Claims Employee Satisfaction with Their Work and Life Environments

Cost and ROI of Current Offerings Debt Levels Credit Scores

Retirement Readiness General Financial Wellness

Presenteeism Employee Job Performance

Cost and ROI of Current Offerings

Retirement Readiness

Absenteeism Medical Claims Debt Levels General Financial Wellness

Turnover Employee Satisfaction with their Work and Life Environments Credit Scores


The six must-ask questions before building a business strategy and vision

①  What is our vision for financial wellness? ②  What is our philosophy? ③  What are our objectives? ④  How will we measure success? ⑤  How will we tie those measurements to business goals

and results—both short-term and long-term? ⑥  What resources are needed to create the program,

manage it over time and communicate it frequently?


Q & A DC-2276

Thank you for joining!

Download the framework: BenzCommunications.com/FinancialWellness

Send us your feedback: [email protected] [email protected]

Disclosures Benz Communications, SSGA, and IM Consulting are independent organizations that are collaborating on this project. Investing involves risk including the risk of loss of principal. The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor. The views expressed in this material are the views of the organizations listed above through the period ended June 22,2015; they are subject to change based on market and other conditions. ssga.com | benzcommunications.com ©2015 State Street Corporation. All Rights Reserved. State Street Global Advisors, One Lincoln Street, Boston, MA 02111-2900 DC-2276

Disclosures Investing involves risk including the risk of loss of principal. The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA or Benz Communications express written consent. DC Investor Survey, March 2015. The survey was fielded in partnership with TRC Market Research, an independent marketing research firm. The data were collected in January 2015 through a 20-minute Internet survey using a panel of 1,009 verified 401(k), 403(b), 457(b) and profit-sharing plan participants, aged 20 to 69, who were working at least part-time. The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street shall have no liability for decisions based on such information.

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Disclosures The views expressed in this material are the views of SSGA Defined Contribution Team, Benz Communication, Barbara Kontje, and Jamie Erickson through the period ended June 22, 2015 and are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Web: www.ssga.com © 2015 State Street Corporation — All Rights Reserved. Tracking Code: DC-2276 Expiration Date: 6/30/2016

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6 steps to bring financial wellness to the workplace ① why financial wellness now? ② american...

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