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The Stress of It All: DC Plan Participants Need More Than Just Retirement Advice

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Employers, take note. Your employees are stressed and distracted by their finances, and it’s affecting their jobs.

According to the March 2015 State Street Global Advisors Biannual DC Investor Survey report, more than 3 in 5 defined contribution plan participants experience a moderate to high level of financial stress.

And, according to the survey, as many as 4 in 10 participants across income levels say financial stress has caused their productivity at work to suffer. On average, survey respondents report spending five hours of work time each month dealing with their personal finances.

State Street Global Advisors released the findings of its March 2015 SSgA Biannual DC Investor Survey at a press briefing in New York on Wednesday.

“Our data says 61% of participants are moderately to severely stressed about their financial situation … and, what we’re seeing, and this is really interesting, this is not specific to lower-income employees or employees who are younger,” said Megan Yost, a vice president and head of participant engagement within State Street Global Advisors’ defined contribution team. “It’s across all income levels, all asset savings levels.”

The DC Investor Survey, conducted in January, was a 20-minute Internet survey using a panel of 1,009 verified 401(k), 403(b), 457(b) and profit-sharing plan participants, ages 20 to 69, who were working at least part time.

The report suggests that employers should take a more holistic, financial wellness-based approach to their employees’ retirement planning and saving.

Because, perhaps surprisingly, the survey found that saving for retirement was not causing participants the most stress.

“What’s interesting is that the top stressors are health care expenses, mortgage debt, and then retirement,” Yost said. “So, as an industry, we’ve been really focused on retirement for a long time – educating about retirement, making better awareness of retirement benefits – but what this is showing us is there is really a more holistic conversation that needs to happen with employers.”

While plan sponsors already support employees’ retirement readiness, the report found that for many employees the importance of retirement planning fades in the face of more immediate concerns.

Almost 47% of the survey respondents said they are living paycheck to paycheck.

“That’s a huge number,” Yost said during the press briefing.

And not only that, she said, almost 50% are not completely confident that they could find $1,000 in an emergency.

The survey also examined the role employers can play in helping to mitigate their financial troubles, since the survey found that the vast majority (80%) of employees agreed that their employer should provide resources to improve their financial wellness and decrease their stress.

 “What we’re seeing is a cultural shift within how employers are trying to engage employees around thinking about retirement and a broader, more holistic footprint,” Yost said during the briefing.

At a financial wellness workshop that State Street hosted late last year, the Fortune 500 plan sponsors in attendance agreed that there is a clear rationale for adopting strategic financial wellness programs. As the report says, “Employers recognize that by helping reduce employees’ financial stress, employees’ overall stress levels may decrease as well. This outcome has obvious benefits for individual employees and may also increase productivity, decrease absenteeism and boost the corporate bottom line.”

From its conversations with Fortune 500 companies, State Street gathered a list of tips and best practices for employers who want to establish or expand a strategic financial wellness program.


  1. Prioritize. “Set a financial wellness agenda, focusing on areas in which your participants need help and your organization is equipped to assist,” the report states. “Consider a measured approach to avoid overwhelming both administrative staff and employees.”
  2. Follow the numbers. “Quantify the real costs of financially unfit employees to your organization and track changes to those costs over time,” the report says. “Consider including data on absenteeism, medical spending, performance ratings and turnover, and aggregating it based on age and salary or job level.”
  3. Promote the tools you already offer. “Make the tools you already have more accessible to employees,” the report says. “Consider putting them all in one place, organizing them by life and/or career stage and promoting them in creative ways to boost utilization.”
  4. Collaborate. “Bring your service providers together to determine how you can focus their collective resources on specific communication priorities — whether it’s explaining how to use a health savings account (HSA) or describing how the retirement plan’s default option works,” according to the report.
  5. Set a schedule. “Plan your promotion strategy with themes that make sense for both the calendar year and your benefits calendar,” the report says. “For example, make January ‘estate plan preparation month’ to build on employees’ New Year’s resolutions. In February, leverage any available tax preparation benefits, and so on.”
  6. Automate for emergencies. “Consider making savings accounts available through credit union partnerships or even automatically enrolling employees in an emergency savings fund in conjunction with your retirement savings plan,” the report states.

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