One way to afford the expense of providing financial training, says Liz Davidson, CEO of Financial Finesse, Inc. (www.financialfinesse.com) is to use your 401(k) plan’s ERISA account. This account is sometimes used to pay for plan expenses and sometimes refunded to participants. As long as the financial education is targeted toward retirement, using the ERISA account to pay for the education is acceptable to the government, according to a legal opinion obtained by Financial Finesse.
You may be in the habit of refunding extra funds that build up in the ERISA account to the plan’s participants, as many companies are. Davidson says that the payoff for using the money to educate employees is much greater than a onetime refund. Financial Finesse performed some calculations, assuming a $150 per employee refund and a 6% rate of return. A participant with 30 years until retirement could expect the $150 to grow to $862 by retirement age.
“However,” Davidson says, “if that money is used to provide a personalized, ongoing financial education program designed to help employees increase their retirement savings and better invest their assets within the plan, that $150 could mean as much as an extra $98,823 at retirement.” Those figures also assume a 6% rate of return, factor in a 2.5% increase in the amount deferred by the participant into the 401(k) plan over the remaining 30 years, and assume an average salary of $50,000.
Quality education demonstrates results
Unlimited employee HR training—one low cost—no setup, no software to install. Find out why the Software & Information Industry Association voted TrainingToday the “Best Workforce Training Solution.” Go here for more information or to sign up.
Sounds good on paper, right? But these days, it is imperative that you see actual results for any program you roll out, including financial education. In fact, Davidson says that if you can make long-term changes in employee behavior, financial education moves out of the nice-to-have category and straight into necessary.
Proof of behavior changes that justify the time and the cost of providing employees with financial education include an increase in deferrals, a decrease in the number of loans and hardship withdrawals, and improved asset allocations among participant accounts. In other words, knowledge must translate to action.
“Our research shows that a huge percentage– 92%, in fact –of employees who participate in retirement education make a major change to their retirement plans within 30 days of receiving the education,” Davidson says. The changes they make are those that make an employer feel great about providing it, she says: They increase their retirement savings, reallocate their assets to a more appropriate mix considering their time horizon and their goals, an
d open an outside retirement savings account, like a Roth or a traditional IRA.
No time to prepare or deliver training? With the BLR®’s TrainingToday, your employees can start taking essential training courses the same day you sign up. Workers (and supervisors) train at their convenience, 24/7. We track, and you save with this turnkey solution. Yes, it really can be this simple. Learn more.
Education should not be a onetime event, Davidson continues. “It is a process. Similar to the way you wouldn’t expect that working out one time would make you physically fit, financial education needs to be on-going. Successful workplace financial education is designed around comprehensive programs rather than singular events.”
Financial Finesse’s research shows that the more interactions a participant has with financial education, the more they tend to defer to the 401(k) plan. The increase, in fact, is nearly double–employees who have one interaction with the company’s financial wellness program defer an average of 5.77%, compared to employees who experience five or more interactions with the program and are now deferring 11.00% of pay.
“Employers are coming to the realization that in order to impart meaningful behavioral change they need to design financial education around how employees make financial decisions. Financial wellness programs resonate with employees because they get a comprehensive framework AND the knowledge to implement it along with the resources and tools they need to make lasting changes.”
Davidson is absolutely right that education can’t be a one-time event–whether it’s finances, safety procedures, skills training, or professional developement. But who has the budget and time to organize a full-blown training program?
Good news from BLR—now you can run your training program like a pro, with our new TrainingToday system.
TrainingToday is a leading provider of online education programs for employees and supervisors. Each course in our extensive library addresses a specific topic with engaging and interactive presentations, delivering practical advice and clear instructions that trainees will remember long after the training is complete.
Three Delivery Platforms
TrainingToday offers you the option of three delivery platforms to meet your organization’s needs:
Professional
- Unlimited training for your whole organization for one flat fee
- Easy to start up and track trainee progress
- Hundreds of courses available, from employment law compliance to sales excellence
Enterprise
The Enterprise includes all the features of the Professional Version plus:
- Track and report capability with built-in comprehensive Learning Management System
- Train with courses as they are, or make them truly your own with our customization options
- Upload your own content (power point, video, SCORM files, etc) to the LMS in addition to using our comprehensive training courses
SCORM
- Integrate content into your existing LMS
- Easy to tailor to your content, logo, presentation style, and corporate policies
- SCORM compliant to integrate with existing corporate learning systems
Here are just some of the many courses available at TrainingToday:
[Click here to download information on all courses and libraries.]
Over 75 HR and employment training courses covering topics such as: Sexual Harassment, Diversity, and ADA.
The Diversity library is an interactive training program with different modules for supervisors and employees. It features real-world scenarios and insightful commentary from a leading workplace expert and employment law attorney.
Preventing Sexual Harassment- National – NEW!
Up until now, training has been a real challenge—there’s such a load of extraneous planning, preparing, and tracking involved. But we’ve got good news—BLR’s editors have developed a unique new program that’s done all that work for you.
It’s called TrainingToday. This turnkey service requires no setup, no course development time, no software installation, and no new hardware. Your employees can self-register, and training can be taken anytime (24/7), anywhere there is a PC and an Internet connection. Courses take only about 30 minutes to complete.
TrainingToday automatically documents training. As trainees sign on, their identifications are automatically registered. When the program is completed, the trainee’s score is entered. So, when you want to see who has been trained on any subject, or look at the across-the-board activity of any one employee, it’s all there, instantly available to you, your boss, an inspector—even a plaintiff’s attorney.
Course certificates can be automatically generated from within the training center and are automatically retained for recordkeeping purposes.
Unlimited Training That Won’t Bust the Budget
Best of all, in these budget-crunching times, TrainingToday costs only a fraction of what you would pay for a learning management system (LMS). You always know exactly what training will cost, no matter how many programs you use, or how many times you use them. There’s just one low annual fee—for unlimited training—calculated by the size of your workforce. Budget once and you’re done!
These are all motivational, actionable courses—for both employees and supervisors—in such key areas as sexual harassment, FMLA, diversity, communication, USERRA, recruiting, and many more. The courses are kept up to date to reflect federal and state regulatory changes, and what’s more, BLR adds new programs continually.
TrainingToday also includes a selection of safety courses—you decide whether you want just the HR courses, the safety courses, or both HR and safety.
If it sounds as if we’re excited about this new service, well, we are—and so is the Software & Information Industry Association, which just voted TrainingToday (formerly the Employee Training Center) the “Best Workforce Training Solution.” Find out what all the buzz is about—sign up for a no-obligation trial to TrainingToday.