On March 17, the Government Accountability Office (GAO) convened a group of 20 financial literacy leaders and experts for a forum focusing on financial education in the workplace. Forum participants noted that employers have the potential to reach large numbers of adults in a cost-effective manner at a place where they make important financial decisions regarding, for example, retirement, life and health insurance, and specialized savings accounts for child care and medical expenses.
They also pointed out that employers already provide information about employee benefits, have key information about employees’ lives, and are generally trusted to provide sound financial information and advice. They suggested information provided by employers should go beyond the current emphasis on retirement and other benefits to include education about budgeting, money management, building emergency savings and understanding the financial impact of health care.
Forum participants noted that automatically enrolling new employees into defined contribution (DC) retirement plans may increase retirement savings, but it may not be appropriate for workers who have other pressing financial needs. Some experts said such behavioral plan design should complement, rather than replace, traditional financial education. Forum participants also recommended individualizing education based on employees’ unique circumstances and offering personal financial coaching in the workplace.
The forum noted the importance of reaching all workers, including shift employees, contingent employees, low-income employees and those with different cultural backgrounds. They suggested making content relevant and understandable, delivering information through online tools and mobile devices, and leveraging partners such as unions and community groups to provide education.
The GAO report about the forum notes that there is limited research about the effectiveness of education not related to retirement savings. Some forum participants suggested a standard set of benchmarks for measuring effectiveness would be useful. In addition, employers expect solid evidence of the benefits for their business to justify their return on investment for financial education programs.
The GAO report about the forum discussion may be downloaded from here.