Financial wellness programs are a hit with big employers, and sales are still growing.
Executives from Prudential Financial Inc., and benefits firms that work closely with Prudential, talked about the rise of financial wellness programs Monday in New York, at a Prudential press briefing.
The Prudential executives are not releasing any data on how the programs affect actual sales of products such as annuities, voluntary life insurance, or voluntary disability insurance. But Chuck Brousseau, head of distribution at Prudential’s group insurance unit, said that about 300 employers have already adopted one of Prudential’s major financial wellness programs, the Prudential Pathways financial wellness seminar program.
“The subscriber rate has continued to climb,” Brousseau said.
Craig Guiffre, managing director at American Benefits Consulting, a benefits consulting firm, said he sees a tremendous level of interest in financial wellness at the employers he serves.
“The buy in that market is different than the retail buy,” Guiffre said.
A financial wellness program has to be about education that can make an employee’s life better, and that can make the employer’s results better by making the employee more productive, Guiffre said.
But Brousseau said surveys show that U.S. workers have an obvious need for financial wellness programs. He noted that one survey found that many workers have saved nothing for retirement.
“They’re not financially well,” Brousseau said.
Jeanna Cavanaugh, head of strategic marketing at Prudential’s workplace solutions group, said another challenge is developing tools that can provide useful, personalized advice for the five different generations of people who may now be in an employer’s workforce.
Here are four other benefits trends speakers talked about at the briefing.
2. Defining “financial wellness,” and measure returns in investments in financial wellness
Robyn Credico, the defined contribution consulting leader for North America at Willis Towers Watson, said that, for human resources and benefits managers, one result of the rise of financial wellness programs is a need to develop financial wellness program performance measures.
One approach is to look at whether workers are retiring at the best time, both for themselves personally and for the employer’s efforts to optimize productivity and benefits costs, Credico said.
Employers might also like to see how financial wellness programs, and medical wellness programs, affect workers’ post-retirement health, Credico said.
“You can’t always get the data to support [the programs'] return on investment,” Credico said.
Prudential recently asked financial professionals about how often they think employers are measuring the performance of financial wellness programs. Half of the benefits brokers, and 32% of the retirement plan advisors, said they think few employers, or no employers, with financial wellness programs measure the performance of the programs.
3. Sweetening employer-paid benefits
Scott Gaul, head of sales and strategic relationships at Prudential’s retirement unit, and Brousseau said they see signs that employers are responding to tight labor markets by looking at the possibility of expanding employer-paid group life benefits in 2019.
Employers see expanding group life programs as an affordable way to attract good workers, use some of the savings resulting from Tax Cuts and Jobs Act tax changes, and encourage workers to think more about things they themselves can do to improve their financial wellness, the Prudential executives said.
4. Improving financial wellness programs for freelancers, temporary workers and other “gig workers”
Prudential executives said that the new efforts will have to reflect the uneven nature of typical gig workers’ income, and may involve either existing associations, or the new types of association health plans that might develop thanks to the release of the Trump administration’s new AHP regulations.
Guiffre said one secret to making financial wellness programs for gig workers work will be creating the right communication tools, such as mobile-friendly tools.
“Everybody had a phone,” Guiffre said.
“It has to be very simple,” Guiffre added.
If gig workers are going to participate in financial wellness programs, the key information they really need can’t be buried seven screens deep in a website, Guiffre said.
5. Tracking retirement plan participants
Waves of legal attacks on life insurers’ efforts to find the beneficiaries of life insurance policyholders who had probably died began to hit the life insurance industry around 2011.
Now, a similar wave of attacks is facing insurers’ pension administration units.
Federal regulators have taken note of weaknesses in past efforts by MetLife Inc. to keep track of the participants in defined benefit pension plans it now administers as a result of pension risk transfer arrangements, even though MetLife notified regulators of the weaknesses itself. William Galvin, Massachusetts’ secretary of the commonwealth, has said he will be reviewing pension plan participant tracking and location arrangements at many other large pension plan administrators.
Credico said news about participant tracking problems startled many of her employer clients.
Many are asking more questions about participant location efforts, hiring independent firms to follow up when participants appear to be missing, and performing “death audits,” to see whether participants might be dead, Credico said.
— Read Investors Helping Life Insurers Shift to Pension Transfer Market: Analyst, on ThinkAdvisor.