Financial Wellness Program


Financial
Wellness Program
for Employees
$
$
$
An Expense or Investment?
Funderburke Institute of Financial Empowerment (F-I-F-E)
Lawrence Funderburke, MBA and CFP
Funderburke Institute of Financial Empowerment (F-I-F-E)
A Value-Added Benefit
Small- and medium-sized businesses (and even large corporations) across the country must
balance short- and long-term profitability goals with employee benefits, primarily health
insurance and employer-matching retirement contributions. Economic uncertainty, tax and
regulatory policy, and customer/client demands add even more stress in the lives of key decision
makers. These “stressors”, particularly for small businesses, may lead them to reduce, eliminate,
or forgo altogether, certain employee benefits that were once “slam dunk” perks of the standard
employment package. Times have certainly changed. However, a voluntary financial wellness
program may very well be a cost-effective option employers can take to assist their employees
with personal or family financial matters.
Financial stress is having a detrimental
effect on the psyche and work habits of
employees. According to the Personal
Finance Employee Education Foundation
(PFEEF), “anywhere from 30 percent to
80 percent of employees waste time
dealing with personal financial matters.”
Over the course of a month, this will
result in 12 to 20 hours of lost
productivity. The National Foundation of
Credit Counseling (NFCC), the nation’s
largest and longest serving national
nonprofit financial counseling
organization, conducted an online poll of more than 2,100 people in early 2014. The results were
quite alarming! Nearly 80% of respondents stated that their personal finances keep them up at
night. Additional worries include a lack of savings, job issues, debt, and credit, among others.
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Obviously, without a good night’s rest, financially stressed employees will have a difficult time
performing their employment duties. Absenteeism due to sickness and stress, and lack of
punctuality in getting to work on time, not to mention a decrease in concentration levels with an
increase in irritability among many other unproductive habits, will continue to have a deleterious
effect on the top (revenue) and bottom (profit) line of businesses.
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This Financial Wellness Program for Employees Proposal is a 2014 © copyright property of the Funderburke Institute of Financial Empowerment
(F-I-F-E). Any duplication or electronic transmission of this material must have expressed written permission of the F-I-F-E administration.
A divorce, foreclosure, bankruptcy, student loan debt, mortgage debt, credit card and auto loan
debt, food and fuel inflation, caring for aging parents, and other monetary concerns can
hamper employees’ on-the-job responsibilities. Reactive measures – notably by those who can
least afford to take on additional financial struggles, low-salaried and minimum wage workers –
exacerbate their financial challenges, such as taking out more debt and/or making hardship
withdrawals from their retirement accounts. A cascading effect ensues as financial challenges
mount and their health deteriorates.
The Short- and Long-Term Effects of Financial Stress
Financial stress has been linked to a host of health-related illnesses and problems. Here’s an
abbreviated list:
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• muscle tension and back pain
• panic attacks
• rise in blood pressure
• migraines and headaches
• ulcers and digestive disorders
• compulsive (and mindless) eating habits
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• insomnia andInstitute
sleep deprivation
Funderburke
of Financial Empowerment (F-I-F-E)
The American Psychological Association (APA) recognizes financial stress as the leading cause of
unhealthy behaviors like smoking, weight gain, and alcohol and drug abuse.
Personal Finance Employee Education Foundation (PFEEF)
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“
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Anywhere from 30 percent to 80 percent of employees
waste time dealing with personal financial matters.
This Financial Wellness Program for Employees Proposal is a 2014 © copyright property of the Funderburke Institute of Financial Empowerment
(F-I-F-E). Any duplication or electronic transmission of this material must have expressed written permission of the F-I-F-E administration.
Retirement Planning (or Lack Thereof)
Various retirement preparedness reports indicate that the majority of workers are woefully
unprepared for retirement. A Financial Finesse report indicated that roughly 80% of current
employees state that they are not on course to meet their retirement living projections. This
is quite problematic given the fact that current retirees, those age 65 or older, have less than
$50,000 in a retirement account outside of a employer-provided pension and Social Security.
Roughly 30 percent of retirees would be financially insolvent without Social Security.
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The Federal Reserve released an alarming study in August 2014. About 1/3 of non-retired
workers have no retirement or pension account set up. In essence, their only hope of
surviving in retirement: Social Security and Medicare benefits. Here’s the problem. Social
Security and Medicare shortfalls for workers under the age of 50 are quite troubling for two
reasons. The past 25 years has seen a dramatic shift from employer-provided defined benefit
(DB) plans to employer-sponsored defined contribution (DC) plans. With DB plans, the
employer pays a promised benefit in the future to employees and assumes the risk of the
plan’s performance. With DC plans, employees are responsible for the selection of
investments inside their retirement account(s) as well as the underlying performance of each
investment. Unfortunately, there is a growing contingent of employees under the age of 30
who do not even contribute to an employer-sponsored retirement account, and thus forfeit
the benefit of a matching contribution. (Keep in mind that an employer may or may not offer
a matching benefit for a defined contribution retirement plan.) For the self-employed, they
need to be even more diligent, and vigilant, about saving for retirement since this
responsibility is squarely on their own shoulders, so to speak.
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This Financial Wellness Program for Employees Proposal is a 2014 © copyright property of the Funderburke Institute of Financial Empowerment
(F-I-F-E). Any duplication or electronic transmission of this material must have expressed written permission of the F-I-F-E administration.
Another glaring problem for workers under age 50: our nation’s unfunded liabilities that
exceed 75 trillion dollars and rising by the millisecond. These include promised benefits
made to Social Security, Medicare, and Medicaid beneficiaries. Regardless of politics, the
Affordable Care Act (ACA) and associated costs are likely to add to our entitlement quandary.
Our $17 trillion national debt will one day have to be accounted for, to say nothing of the
future annual deficits that will be incurred in the hundreds of billions or trillions of dollars
that will cause this number to balloon even more. By 2023, the U.S. Treasury will spend
100% of tax receipts on entitlements (Social Security, Medicare, and Medicaid) and interest
payments on the national debt. Education, defense, and other federal government
expenditures will somehow have to be dealt with, either through drastic cuts and/or by
issuing more U.S. bonds to cover them. These painful band aids will cause even more
heartache for constituents on both sides of the political aisle. (Federal, state, and local
government pensions in the trillions of dollars are another ticking time bomb.)
The working poor and middle-class are at the greatest risk of not being sufficiently
prepared for the demands of retirement. Inadequate earnings, lack of savings, and poor
planning in general will undoubtedly derail any chance of financial survival during their
“moonlight” years.
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This Financial Wellness Program for Employees Proposal is a 2014 © copyright property of the Funderburke Institute of Financial Empowerment
(F-I-F-E). Any duplication or electronic transmission of this material must have expressed written permission of the F-I-F-E administration.
The Solution
F-I-F-E Financial Wellness Program
A solution exists to help employees of all income levels achieve personal and financial
success: a winning financial wellness program. Based on research by the Personal
Finance Employee Education Foundation and Financial Finesse, here’s a short list of
the benefits . . .
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•
increased productivity and employee morale
enhanced employer-employee relations and greater staff retention
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reduced health care costs
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•
better utilization of employee benefits
•
3:1 return on investment in financial education
financial changes are easier to enact than changes in diet and exercise, with
93% of employees implementing at least one major change in their financial
habits
Contact Us
Please contact Lawrence Funderburke, a certified financial planner and financial wellness
consultant, to discuss the Mr. Fundy’s Financial Wellness Playbook for Employees.
Lawrence Funderburke
[email protected]
614-750-1541
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This Financial Wellness Program for Employees Proposal is a 2014 © copyright property of the Funderburke Institute of Financial Empowerment
(F-I-F-E). Any duplication or electronic transmission of this material must have expressed written permission of the F-I-F-E administration.