With studies suggesting some gaps in financial literacy among millennials, a panel at the 2018 Benefits and Pension Summit will tackle ways of educating and reaching younger plan members.
Shannon Lee Simmons, founder of the New School of Finance and a member of the panel at the April 17 event at the Ritz-Carlton Hotel in Toronto, says a lot of young people end up having to manage financial planning on their own because they don’t have workplace benefits. “They have perks but not anything for their health. They’re not paying into life insurance. There definitely isn’t a pension,” she says.
“So a lot of the financial planning is downloaded onto the millennials’ shoulders within their own financial life [because] nothing is happening for them within the workplace that they can count on, necessarily. I’m seeing it more and more.”
As the Canadian workplace continues to evolve, many millennials want to work for a company they believe in and that offers flexible working opportunities, says Simmons. She notes a lot of the companies employing younger workers are startups or small businesses that don’t have the deep pockets to offer a benefits plan or a pension.
The solution, according to Simmons, is a flexible plan. “I think more flexible so that more small and medium businesses will be able to participate without it being so financially prohibitive or intimidating or scary. Within a health plan, if I was to ask people what they wanted to buy into, it would be more like a health-care spending account structure because there’s so many ways people want to improve their health and wellness these days beyond dental,” she says.
“So making something that’s more flexible, you can spend it on anything within the realm of wellness, whether that be financial planning or acupuncture or osteopath. Those types of benefits would speak volumes to a younger demographic,” she adds.
Simmons also encourages employers to use and leverage technology in their benefits plans in order to better match millennials’ preferences for mobile apps and online content. “A lot of the time, the complaints are that even when someone does have benefits, they don’t even run their claims through because it’s such an ordeal . . . and then it becomes obsolete and useless,” she says. “From a younger point of view, for the end user, a flexible, technology-inspired plan that allows a holistic view of wellness would be something that could knock it out of the park.”
In the case of the New School of Finance, it offers employees a health-care spending account, adds Simmons. “It provides that flexibility, and I think that some sort of staggered cost or fee available to small- or medium-sized businesses would really help promote companies to actually get their feet wet and offer benefits for the first time.”
Moderated by Caroline Cakebread, editor of Canadian Investment Review, the panel will also include Laurie Campbell, chief executive officer of Credit Canada Debt Solutions Inc., and Jeremie Ryan, director of financial literacy and stakeholder engagement at the Financial Consumer Agency of Canada.