Employers are expanding their focus on the overall financial well-being of their workers, a survey from Aon Hewitt finds.
According to the survey of nearly 250 U.S. employers representing approximately six million employees, 93% intend to focus on the overall financial well-being of their employees, beyond retirement readiness. Nearly half (46%) are very likely and another 47% are somewhat likely to add new plan features, mobile apps or online tools to assist individuals with understanding financial concepts and financial planning.
Sixty-nine percent currently offer online investment guidance, up from 56% in 2014, and 18% of the remaining employers are very likely to add this feature in 2015. More than half (53%) offer phone access to financial advisers in 2015, up from 35% in 2014. Nearly half (49%) offer third-party investment advice, up slightly from 44% in 2014, and 47% offer managed accounts, up eight percentage points from 2014.
“Employers’ focus on financial wellness has been steadily picking up steam in recent years. This year, even more organizations will address this topic head-on and help workers think beyond just saving enough for retirement and consider all aspects of their financial health,” says Rob Austin, director of Retirement Research at Aon Hewitt. “Depending on the individual needs of their employee populations, companies are offering features like basic budgeting help, while others are providing assistance on how to save for life events like a home purchase or college.”
The survey also found companies are more carefully reviewing the costs associated with their defined contribution retirement plans and are using their scale and purchasing power to make changes that may improve returns for workers. More than one-third (34%) of employers recently made changes to their fund line-ups to reduce plan costs, compared to 27% in 2014. Of those employers that have not yet made this change, 34% are very likely to do so before the end of the 2015.
Additionally, the percentage of employers that have recently moved from mutual funds to institutional funds or separately managed accounts has almost doubled, from 16% a year ago to 30% today.
“Employers understand that small plan fees can add up and ultimately make a big impact on workers’ retirement savings,” explains Austin. “To help workers’ maximize their retirement dollars, employers are scrutinizing each fund in the plan to determine if the associated fees are reasonable.”
A copy of the report of survey results may be requested from here.