Benefits Products & Services

Financial education in the workplace

MetLife’s growing program helps employees sort out financial choices;

By Thomas A. McCoy, CLU

Today's benefit plans are increasingly all about choice—giving employees the opportunity to tailor their plan to their individual needs. It starts with employees choosing contribution amounts and investments for their 401(k) plan. Your money; your choice. Voluntary benefit selections, ditto. The choices get more complex for those with consumer driven health plans and wellness programs. For two-income families, those choices may double.

All this control is empowering for employees, but it's also overwhelming. Benefit plan choices inevitably bump up against life's other major financial choices—how to save for college costs, whether to refinance a mortgage, or how to help care for aging parents, for starters. General uncertainty in the economy doesn't make it any easier.

Many people facing financial decisions are driven into a state of "finertia"—a term coined by best-selling financial author Greg Salsbury, Ph.D., to describe "paralysis brought on by trying to comprehend contradictory and confusing financial information." Salsbury, who has studied consumer financial behavior extensively, says that what today's employee benefit plans lack most is advice.

The idea of providing "advice" to plan participants might make plan administrators uncomfortable. It moves a plan away from the self-choice philosophy that guides so many plans today. But since employees are faced with financial choice overload, maybe employers and their benefit plan providers could at least provide them with some useful financial education.

That seems to be what MetLife had in mind when it started a program called "retirewise^®" in 2008. Retirewise (see April 2010 issue) is designed to help employees, whether or not they are receiving a benefit via MetLife, sort out the complexities of their retirement planning. It consists of four seminars on pre- and post-retirement topics, led by specially trained MetLife retirement representatives. The format is low key, educational, and open to employee spouses also.

Retirewise has grown to be utilized by more than 700 employers. This past June, MetLife decided to expand its financial education seminars, offering additional financial topics under a broader program of workshops called PlanSmart^®. Besides the original retirement planning content, PlanSmart includes presentations on managing credit, college funding, long-term care, estate planning and financial management for dependents with special needs, among other offerings.

"The timing for PlanSmart was just right," says Gary Simpson, CLU, ChFC, Vice-President—PlanSmart, at MetLife. He notes that with employers moving more toward voluntary benefits, they have welcomed the opportunity to offer a value-added service, particularly since it's handled on a turnkey basis.

"All the employer has to do is send out an e-mail announcing it and maybe do a follow-up if they wish. HR people have shrunk their staffs and gotten busier, so they appreciate being able to provide a program their employees want that doesn't involve a major HR commitment."

Initially, he says, MetLife targeted the 500-plus employee groups for the program, figuring that was most practical, considering the expense and training needed to establish the program. Now, he says, "We're getting more and more requests for this kind of help in the smaller market, so we're pointing in that direction too.

"We will wind up doing about 2,200 PlanSmart seminars or workshops this year," Simpson says. "Both the employers and our brokers really like the broadening of the program because it provides help for employees confronting different challenges, and the seminars can be scheduled throughout the year."

Among the most popular of the new seminar topics so far have been college planning and estate planning. "We're also getting a lot of interest—from employers and employees—on the topic of financial management for special needs dependents," says Simpson.

Logistically, companies seem willing to make the adjustments to work schedules to facilitate the seminars and workshops, he says. The new topics are each presented in one hour, and the four-session retirement planning seminars in the original retirewise program run for two hours each.

"About half of the seminars have been held during lunch hours and the other half immediately after work," Simpson explains. "Some companies that offer the two-hour seminar during the lunch hour will provide an hour of paid time off for the second hour."

The program has been well received by the independent benefits brokers representing these groups, Simpson says. "It enables them to bring a value-added service to the customer at little or no cost. In fact, brokers have told us it's a difference maker, giving them a competitive advantage. In some cases they've even saved a client relationship that might have left otherwise because the client is so pleased with the education.

"The brokers have the option of being present at the seminars," he adds, although the presentations are conducted entirely by the specially trained Met Life representatives.

"Just under half the employees participating in our seminars have requested further one-on-one discussion at a later time," he notes, which can lead to sales opportunities.

One company that conducted the retirewise seminars is Hines, a multi-national real estate firm based in Houston. Ted Barrall, director of compensation and benefits, says his company had been considering the idea of providing financial education to employees for some time, but couldn't find the right fit.

"We tried working with our 401(k) plan administrator, who has a lot of education materials, and we used them, but we really wanted something broader than that." After learning about the retirewise program, "We met with the MetLife financial advisor who would be giving the course, who was very impressive, as well as a couple of the organizers from MetLife. When we took the materials and described the program to the head of HR and to the head of our Southwest Region, they were all very impressed. And with the actual course itself, they definitely delivered on the promise."

Barrall adds, "We don't strong arm employees into participating. We try to make sure that management is supportive of employees who request work schedule modifications in order to attend. But at the end of the day it's really up to the employee.

"We're constantly trying to educate employees about how to use their benefits, and retirement is a complex equation. This program that MetLife provides is something that we didn't have the ability to deliver on previously, so it's worked well.

"We made some modifications to MetLife's program," Barrall explains. "First, we asked them to shave some of the material and fit the retirement seminars into two sessions, instead of four. We felt that was easier for our employees to attend without conflicting with work schedules."

In addition, he says, "Before attending the sessions, employees filled out some personal financial information, which they gave to the MetLife financial advisors. Then after the sessions, the employees met individually with the financial advisors' counselors to get some financial planning feedback."

In this era of employee benefits self-direction, MetLife's program proves that an employer can still provide more than just a healthy menu of options. Its PlanSmart program makes it easier for a human resources department to live up to its name.