Employees seeking more overall financial well-being

Employers and financial experts have predicted an organic shift will take place this year toward devoting more time and efforts to improving employees’ overall financial well-being, a giant step from the retirement preparedness seen in recent years.

Many companies say they will bolster their efforts in 2015 to increase their workers’ sense of financial health, extending their strategies beyond just retirement readiness, according to new data from Aon Hewitt. Employers are also taking advantage of the size and purchasing power of their defined contribution plans to reduce costs and improve returns for employees, according to the financial consultant.

“Employers’ focus on financial wellness has been steadily picking up steam in recent years,” said Rob Austin, director of retirement research at Aon Hewitt. “This year, even more organizations will address this topic head-on and help workers think beyond just saving enough for retirement and consider all aspects of their financial health.”

Also see: Gender-specific retirement education fills void, boosts workplace diversity

More employers are expected to offer additional tools and resources to help boost retirement savings, and according to Aon Hewitt, some of these recent changes include:

• Online investment guidance: 69% currently offer this benefit, up from 56% in 2014, and 18% of the remaining employers are very likely to add this feature this year.
• More than half (53%) will offer phone access to financial advisors in 2015, an increase from 35% in 2014.
• Roughly half (49%) will offer third-party investment advice, up slightly from 44% in 2014
• 47% will offer managed accounts, up 8% points from 2014.

“Depending on the individual needs of their employee populations, companies are offering features like basic budgeting help, while others are providing assistance on how to save for life events like a home purchase or college,” Austin adds.

And although retirement readiness has taken the spotlight in recent years, this past year a real push has been seen to make sure employees are not only prepared to retire, but also understand barriers that will hinder them from retiring.

Also see: Illinois moves on retirement readiness

“There’s not a simple equation for one person,” says Heather Shultz, vice president of participant marketing at Fidelity Investments. “As we dig in more and really understand, we look at all our participants on many dimensions: growing money, are they enrolled for retirement, what are their planning priorities?”

As all this information is collected, Fidelity uses that data to put together a personalized financial prediction for an individual. “This will get them closer to retirement readiness, or as close as they can get,” she says.

Dovetailing with Aon Hewitt’s findings, Shultz says the past year alone has seen a great change for industry on a whole. As an example, she notes the increased use of infographics to translate complex topics. “Historically, we’ve done a lot of deep articles, but now you’re operating in seconds versus minutes. When we look at education we’re looking at all the right formats and all the right time.”