Content area
Full Text
One of the growing areas in employee benefits is workplace financial education. This study was conducted at one of several plants owned by a Southeastern chemical production company to investigate the effectiveness of workplace financial education. The EDSA Group© offered the education. Differences and similarities between participants and nonparticipants in the financial workshops were explored. Most workshop participants took positive actions to improve their financial well being. This study found strong evidence that workplace financial education is effective because it resulted in better financial wellness for workers.
Key Words: financial education, retirement, workplace, financial wellness, productivity
Employers are increasingly offering workplace financial education for their employees as part of the benefits program. This education is in response to worker needs, obligations imposed by the Employment Retirement Income Security Act (ERISA), and recent Department of Labor (DOL) guidelines. Since 1990, DOL has encouraged employers to provide financial education to help workers better understand their employersponsored retirement plans.
Why employers offer financial education
Employers also offer financial education to employees for a number of other reasons:
1. To increase participation in and contributions to 401(k) plans
2. To help workers improve their personal financial wellness.
3. To help workers remove obstacles to fully funding their retirement plans.
4. To increase employee loyalty and morale.
5. To improve workers' chances to retire early or on time.
6. To reduce workers' stress.
7. To increase workplace productivity.
8. To reduce the incidence of employee theft.
9. To help employers avoid lawsuits.
10. To remove limits on tax-deferred savings for highly compensated employees (Kratzer, Brunson, Garman, Kim & Joo, 1998).
What programs should include
Employers are increasingly aware that a broad approach to financial education, rather than a narrow focus on retirement education, is necessary to meet the needs of the diverse workers. Garman stated that " Responsibility for providing personal financial education and services to prevent and alleviate money woes is increasingly falling on employers because they have access to resources that can make such programs a valuable benefit" (Overby, 1998, p. 1).
Experts recommend that comprehensive workplace financial education programs should include information on increasing participation in, and contributions to, employer-sponsored retirement plans, making satisfactory choices among employer-provided fringe benefits, making personal assessments about credit and money...