Preliminary results of a new survey from the International Foundation of Employee Benefit Plans indicate there is room for improvement in the type of financial education employers offer. Half of all organizations offer benefits literacy education and nearly half offer retirement security education, but only about one-quarter offer financial literacy education.
More than one-third of organizations offering financial education have just started offering this education in the past five years, and half of organizations surveyed have experienced an increase in demand from employees/participants for financial education in the last five years.
According to the survey, nearly two in five respondents feel a responsibility to educate employees about pension and benefit options, encourage workers’ retirement savings and help participants become financially literate managers of their own money. Nearly two in five feel their responsibility is only to educate about pension and benefit options and encourage retirement savings, and about one in five feels their responsibility is only to educate about pension and benefit options. Fewer than 5% feel no responsibility to educate about retirement benefits or financial matters at all.
Among organizations offering financial education, the three most common education topics are retirement plan benefits, investments and savings. About one-quarter of organizations providing financial education have assessed which financial education topics are needed most by their populations, and about half are considering doing so.
Survey respondents regard voluntary classes/workshops and free personal consultation services as the most effective ways to provide financial education to employees/participants. Additionally, respondents rate one-on-one in-person meetings as considerably more effective than larger group meetings or one-on-one online/phone meetings.
“There is an obvious need for employees to become better acquainted with their finances and prospects for retirement,” says Julie Stich, director of research at the Foundation. “The survey found that only 18% of employers consider their average employee at retirement age to be very or extremely prepared for retirement. Offering educational opportunities to participants is a way for employers to give their employees the tools and confidence to plan for their retirement.”
In February 2014, the International Foundation surveyed member organizations across the United States and Canada about the various types of retirement and financial education offerings they provide to their employees and participants. In total, 397 responses were received (310 from the United States and 87 from Canada).
Additional preliminary findings from the survey can be found in the report, Financial Education for Today’s Workforce: 2014 Survey Results, available at www.ifebp.org/financialeducation. A full report with all findings will be released later this year.