For Employees Only
Why Employee Financial Education?
More and more employers are beginning to see the tremendous benefits of providing their employees with a solid financial education. When employees are distracted by financial worries it diminishes their productivity, brings unnecessary stress into the workplace and puts a damper on company morale.
On the other hand, when workers are in a state of Financial Wellness, they are in control. They are confident, focused and have a greater balance and security. By offering employee financial education, an employer is making an investment in their business.
Just consider the following facts:
-
90% of the nearly 128 million workers in the US have difficulty managing their money and are not consistently saving for retirement.
-
Up to 50% admit to wasting 21 hours per month while on the job dealing with personal money matters.
-
Two–thirds say “They have trouble paying their bills on time and worry about money”.
-
Employees regard financial stress as their number one concern, 5 times greater than personal health.
Source: National Institute of Personal Finance Employee Education
What’s more, the Department of Labor places the fiduciary obligation on employers to provide their employees with an unbiased financial education. Great companies have long understood the value of providing a financial literacy education to their workers.
The bottom line reasons why your organization should provide financial training at the workplace:
-
Meet your fiduciary and ERISA 404(c) requirements, and reduce your liability. If it comes down to determining who is liable, the courts will ask “did the employer provide in some form employee financial education that had the high likelihood of connecting with people at different levels?” This course provides actionable steps that anyone can follow by watching the training videos and then duplicating the same steps.
-
Prevent your plan from becoming “top heavy” and avoid IRS penalties.
-
Improve employee satisfaction, retain your top talent. Employees need to feel financially secure to feel satisfied with their current position. Financial security comes from more than salary; it comes from making sound decisions, reducing debt, building assets, and being on track for retirement.
-
Financial stress carries over to the workplace. Personal financial worries can lead to time wasted at work on money problems, increased absenteeism, a higher turnover rate, higher health care demand, wage garnishments, even theft.
Financial Literacy Issues Brief
Posted By Mike Kang
October 28, 2009 – In What Americans Are Worried about Now
Summary of Financial Finesse’s Research Findings on Financial Literacy
In response to a 10 year study on financial literacy among US employees, Financial Finesse revealed a significant national financial literacy problem—one the company believes played a major role in the current financial crisis.
Among the research findings:
-
86% of employees indicated that they have no idea whether or not they are on track to retire comfortably.
-
53% admit they lack a basic knowledge of stocks, bonds and mutual funds.
-
73% are not sure if the asset allocation of their portfolios is appropriate based on their risk tolerance and time horizon.
-
43% do not have a handle on their cash flow and spend more than they make each month.
-
62% have not set up an emergency cash reserve.
-
23% do not pay their bills on time each month.
Consequences of the Lack of Financial Literacy Among US Employees
Employees’ lack of savvy contributed to the current financial crisis, with millions of Americans taking on mortgages they couldn’t afford, incurring too much high-interest-rate credit card debt, investing too aggressively in the stock market and failing to set up a strong financial foundation. All of these mistakes are avoidable with the right education and training—but the vast majority of Americans don’t receive financial education in school or at work.
As a result of poor financial literacy and decision-making, financial dynamics have shifted in most American households, away from long-term financial planning and towards day-to-day financial management as Americans scramble to regain their financial footing in the wake of the recession.