Employers in Canada and the United States that have implemented financial education programs say their employees are less stressed, more prepared for retirement and have a better understanding of their finances.

A report from the International Foundation of Employee Benefit Plans (IFEBP) finds that more than two-thirds of organizations offer financial education to employees. Among employers offering financial education, only one-third have a workforce that is somewhat or very highly stressed, compared with 43% of respondents that do not offer financial education.

“The survey found that, while the benefits of financial education may take a few years to emerge as employees learn about their options, the rewards are long term. Staff are smarter about their future and more focused during work,” says Julie Stich, director of research at the IFEBP.

Overall, of the respondents that offer financial education opportunities, more than 66% say their initiatives are somewhat to very successful for their employees.

Employers that have seen greater success in their programs report a robust financial education strategy. Of the respondents that say their programs are successful:

  • 84% offer education during normal work hours (compared with 81% of employers with unsuccessful programs);
  • 50% provide financial education to participants’ spouses (compared with 31%);
  • 35% have assessed which financial education topics are most needed (compared with 8%);
  • 32% provide services to retirees (compared with 18%); and
  • 32% have a budget devoted to financial education (compared with 9%).

Employers also shared their views on why they provide financial education to participants. Notably, 61% of respondents with successful programs stated that it’s important to improve participant/employee retirement and investment decisions. And, 45% of these employers believe it is the organization’s responsibility to educate staff on pension and benefits options, encourage retirement savings and improve participant money management.

The report also finds that organizations with successful programs cover more topics in their financial education programs than organizations with unsuccessful programs, on average seven versus four. Topics offered to participants include retirement plan benefits, budgeting/spending plans, employment after retirement, annuities, wills and estate planning, and life insurance.

Likewise, employers with successful programs also use a wider variety of educational methods than employers with unsuccessful programs, seven versus five. Methods by which organizations provide educational services include voluntary classes, newsletters, email, workbooks, online resources and courses, retirement income calculators and free personal consultations.

“This report highlights the fact that financial education programs have made an impact on employee well-being—financially and mentally,” said Stich. “We are encouraged that two-thirds of our respondents consider their programs to be successful and are hopeful that employers will emphasize the important role financial education has on employees’ overall well-being.”

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Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

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