W E L L N E S S C O U N C I L O F A M E R I C A S P E C I A L R E P O R T

Financial WellnessThrifty Ideas For Turbulent Time$

Jeff S. Rubleski mba

Jeff S. Rubleski is Director of Sales Strategy for Blue Cross Blue Shield of Michigan and Adjunct Professor of Finance at Grand Valley State University. He is an employee benefits expert, with expertise in defined contribution pension plans, healthcare financing, comprehensive employee wellness programming, consumer-directed healthcare and personal finance.

Prior to joining Blue Cross Blue Shield of Michigan over 11 years ago, Jeff spent over 15 years in the banking, health and financial publishing industries and served as the Marketing Strategist and Chief Operating Officer for the Wellness Council of America (WELCOA) in Omaha, Nebraska. During his tenure at WELCOA, Jeff introduced The Well Workplace health newsletter and the Just For You health brochures that are distributed to employers and insurance carriers throughout the United States.

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The Wellness Council of America is dedicated to helping the nation’s employees lead healthier lives. For this WELCOA Special Report, I’ve asked Jeff S. Rubleski, MBA—one of the nation’s leading minds on financial wellness—to put down in writing his thoughts concerning Financial Wellness: Thrifty Ideas For Turbulent Times. The tips and strategies outlined in this WELCOA Special Report are offered as a means to assist you in creating a healthier workplace.

The tips and strategies included here are by no means a comprehensive list, and are designed to initiate action and ideas to help you, the wellness practitioner, build and sustain a wellness program that makes a difference in the lives of your employees and their families—and produces a return on investment.

The Wellness Council of America is one of North America’s most trusted voices for workplace wellness information. For over a decade, we have been partnering with our clients—businesses, health care systems, government agencies, educational institutions, and not-for-profit organizations—to help them build world-class wellness programs. With a growing membership of over 3,000 organizations, collectively employing millions of people, WELCOA has become one of the largest and most respected resources for workplace wellness in North America.

We hope you enjoy this WELCOA Special Report.

Yours in good health,

David Hunnicutt President

Financial WellnessThrifty Ideas For Turbulent Time$

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Consider asking your pension investment plan advisor to conduct employee education sessions on the operation of the plan and a review (in plain English) of the investment options available. For non-plan participants and new hires that become eligible for plan participation, consider automatic plan enrollment to boost participation. Consult with your benefits administrator to ensure that automatic enrollment is established properly. The Pension Protection Act of 2006 grants employers the authority to implement automatic enrollment in 401(k)-type plans. Employers that have chosen automatic enrollment options typically increase employee participation in 401(k)-type plans. By statute, employees must be granted a 30-day window to opt-out of automatic enrollment, but few will actually opt-out if the employer communicates the benefits of participation and includes some type of immediately vested matching contribution. Companies that have elected automatic enrollment have reported success in increasing both employee participation in the plan and increased employee contributions. The intended result of automatic enrollment is boosting employee pension balances for retirement funding—a key step in building long-term financial security.

any savings through new benefit offerings will benefit employees and your business. Remember to spend the necessary time communicating any benefit plan changes. Work with your benefits advisor and your health insurance carrier to establish a solid employee communication plan so your employees understand and embrace the new benefit options.

Evaluate or consider offering “voluntary” benefit options—

these benefits include individual life insurance, accidental injury coverage, critical illness insurance, dental, vision, disability income, long-term care and other benefits that employees choose and fund through payroll deductions. Voluntary benefits can fill in critical insurance coverage gaps for employees, reducing financial risk when a claim for a covered voluntary benefit occurs. Since voluntary benefits are paid 100% by employees, the addition of new voluntary benefits will not add material costs to your benefits plan and will be valued by employees who need and select voluntary benefits.

Examine pension offerings—most organizations offer a 401(k)-

type defined contribution pension plan that encourages employees to make pre-tax contributions to individually-owned accounts. To increase employee participation in the plan, most employers will offer some type of matching contribution. Assess your overall plan and make sure that the matching contribution and vesting schedule promote employee participation in the plan. Take a look at your employee education efforts in this area. Typically, there is a tremendous opportunity for better employee education regarding the operation of the plan and how the plan benefits the employee. Targeted education efforts should increase employee participation in the plan and boost employee contributions.

e are in the midst of a perfect financial

storm impacting business and consumers.

The banking and mortgage crisis is reverberating through our economy and is impacting virtually every consumer and most business sectors. Most businesses are struggling to maintain profit margins, as demand for products and services rapidly weakens and available credit tightens to finance necessary short and long-term business needs. As a result, scores of businesses are laying off workers at a pace that has not been experienced since the deep recession in the mid-1970s. With personal debt at record levels, job layoffs accelerating, property values plummeting and foreclosures mounting, consumers are reeling. And to add further personal financial pressure, 401(k) balances for most of us have plummeted over the past year!

In spite of all of the financial challenges confronting business leaders and employees, there is good news regarding what can be done at the worksite to reduce benefits costs for your business and to boost the financial well-being of your employees. First, I will address action that business leaders can take right now to save money on costly benefit plan options:

Assess current health insurance plans—a significant

financial impact can result for your business and your employees when changes are made in this area. Make sure that you are working with your benefits advisor and your health insurance carrier to ensure that cost-effective options are implemented. This will likely involve making a change in benefit options or carriers during or even before the annual open enrollment period. Since employees typically pick up a portion of the health insurance premium,

The banking and

mortgage crisis is

reverberating through

our economy and is

impacting virtually

every consumer and

most business sectors.

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assessment, don’t be surprised if you find that there is room for vast improvement in these key areas! Most employees, regardless of education and pay scale, lack basic financial skills to properly evaluate benefit offerings. Every day financial stresses related to debt and spending decisions can consume employees and result in poor decisions regarding benefit plan selection. Consider the following ideas to boost your employees’ financial wellness:

Implement focused personal finance education—

begin with the basics—start by encouraging employees to prepare a basic monthly budgeting and cash flow planning document. Another important element for building a solid financial foundation is calculating personal financial net worth. Included in this report are sample Worksheets (pictured on the following page) that can be used for budgeting and estimating financial net worth. Both of these, along with other useful Worksheets, are included in my book, The 10 Steps to Financial Wellness, which is published by WELCOA.

When employees have an understanding of their ongoing budgeting needs and can calculate their financial net worth, they possess two financial benchmarks that are necessary building blocks for personal financial wellness. Employees who understand and commit to budgeting will often find a significant amount of savings in discretionary monthly expenses. Money saved through the process of budgeting can be used to boost participation and investment in company benefit programs and can reduce personal debt. These positive outcomes also serve to increase employee financial net worth.

Consider adding a Roth 401(k) or Roth 403(b) option—The

Pension Protection Act of 2006 made Roth 401(k) and Roth 403(b) permanent options for company plans. Previously, this option was scheduled to expire in 2010, making employers hesitant to add this option to their plans. Unlike Roth IRA plans, there are no income limits related to employee participation in the plan. Although employee contributions are not made with pre-tax dollars, at retirement withdrawals from the Roth account are tax-free, making this an attractive option for many employees.

Target wellness program financial incentives—in

challenging economic times, properly structured financial incentives can get the attention and support of the targeted employee audience. Take a look at strategic incentive programs to encourage employees to complete a health risk assessment, to participate in focused care and disease management programs and to encourage healthy behaviors related to nutrition, weight management and exercise. Properly designed incentives linked to your health insurance plan can dramatically increase employee participation in targeted programs and also identify those employees who have elevated risk factors, which have a direct impact on healthcare costs and the well-being of your employees.

Take These Steps To Boost Employee Financial Literacy…To leverage the success of benefit plan changes you make at the worksite, it is critical to consider the financial health and knowledge of your employees. When you step back and make this

Strategies To Reduce Business Benefit Costs

Assess current health ➤insurance plansEvaluate or consider ➤offering “voluntary” benefit optionsExamine pension ➤offeringsConsider adding a ➤Roth 401(k) or Roth 403(b) optionTarget wellness ➤program financial incentives

Strategies To Increase Employee Financial Well-Being

Implement focused ➤personal finance educationCreate savvy ➤employees involving big-ticket purchasesEnlist employee input ➤on best “personal finance” practices Distribute objective ➤personal finance materials to boost employee financial wellnessIncorporate “financial ➤wellness” into your employee wellness programming

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Worksheet 1-1—Personal Financial Net Worth Statement

AssetsTaxable Investments Current Value 1. Cash—include checking, savings accounts, CDs, $ _________

money market accounts

2. Stocks, bonds and mutual funds $ _________

3. Investments in real estate (do not include your home) $ _________

4. Value in businesses privately held $ _________

5. Value of other taxable investments $ _________

Tax-Advantaged Investments6. Value of 401(k), 403(b) or 457 accounts $ _________

7. Value of defined benefit pension plan (if applicable) $ _________

8. Value of IRAs and self employment plans (SEPs & Keoghs) $ _________

9. Value of education savings accounts (529 plans, UGMA) $ _________

10. Variable annuity plans $ _________

11. Other tax-advantaged investments $ _________

Personal Property12. Approximate market value of primary residence $ _________

13. Other properties including second homes $ _________

14. Value of home furnishings $ _________

15. Value of automobiles, if owned $ _________

16. Other $ _________

17. Total Assets (add lines 1-16) $ _________

Debts18. Mortgage balance $ _________

19. Home equity loans $ _________

20. Credit card balances $ _________

21. Student loans $ _________

22. Automobile loans or lease payments $ _________

23. Other debt $ _________

24. Total Debt (add lines 18-23) $ _________

Financial Net Worth: Line 17 minus line 24. $ _________

Worksheet 1-2—Monthly Cash Flow Budget/Worksheet*CATEGORY Budget Amt Actual Amt DifferenceINCOMETake home pay

Interest Income

Investment Income

Miscellaneous Income

***TOTAL INCOME:

HOME EXPENSESMortgage or Rent

Homeowners/Renters Insurance

Property Taxes

Home Repairs/Maintenance/HOA Dues

Home Improvements

UTILITY EXPENSESElectricity

Water and Sewer

Natural Gas or Oil

Telephone (Land Line, Cell)

FOOD EXPENSESGroceries

Eating Out, Lunches, Snacks

FAMILY OBLIGATION EXPENSESChild Support/Alimony

Day Care, Baby-sitting

HEALTH & MEDICAL EXPENSESInsurance (medical, dental, vision)

Out-of-Pocket Medical Expenses

Fitness (Yoga, Massage, Gym)

TRANSPORTATION EXPENSESCar Payments

Gasoline/Oil

Auto Repairs/Maintenance/Fees

Auto Insurance

Other (tolls, bus, subway, taxi)

CLOTHING PURCHASESDEBT PAYMENTSCredit Cards

Student Loans

Other Loans

ENTERTAINMENT/RECREATION EXPENSESCable TV/Videos/Movies

Computer Expense

Hobbies

Subscriptions and Dues

Vacations

PET EXPENSESFood

Grooming, Boarding, Vet

MISCELLANEOUS EXPENSESToiletries, Household Products

Gifts/Donations

Grooming (Hair, Make-up, Other)

Miscellaneous Expense

INVESTMENTS & SAVINGS401(K), 403(B) or IRA

Stocks/Bonds/Mutual Funds

College Fund

Savings

Emergency Fund

***Total Expenses, Investments And Savings: Cash Flow Shortage/Surplus (Total Income Minus Total Expenses, Investments & Savings)

Worksheets taken from Appendices 1-1 and 1-2 of 10 Steps To Financial Wellness. *Adopted From Financial Planning at About.com

about WELCOA

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Create savvy employees involving big-ticket purchases—

the two largest purchases most employees will make involve transportation and housing. This applies to both ownership and leasing. Poor decisions in these two areas can put tremendous financial strain on your employees, resulting in underutilization of company benefit programs and excessive debt. Consider an ongoing educational series offered at the worksite by respected professionals in the real estate and transportation industries. Most of these professionals will provide their insight at no cost and their expertise can save your employees a bundle when they make major purchases. Consider enlisting mortgage brokers, Realtors, bankers, auto dealers and credit counseling professionals. Be sure to specify the purpose of the program is education and not selling. Also ask to review all materials before any presentations. As you build success with this type of educational platform, consider bringing in a Certified Financial Planner (CFP) or other licensed financial planning professional to provide objective, overall financial planning advice.

Enlist employee input on best “personal finance” practices

—collectively, your employees will have some great ideas on techniques they use to keep spending in line and to plan for long-term investments. Consider posting these ideas on your company intranet or newsletter. When employees learn about the successes of their peers, it serves to motivate them to take positive action. Feature employee success involving participation in your 401(k)-type plan. A first-hand story from a peer on the importance of saving for the future and how a nest-egg can grow over time can serve to enhance participation and contributions to the plan.

Based in Omaha, Nebraska, the Wellness Council of America (WELCOA) was founded in 1987 as a national non-profit

membership organization dedicated to promoting healthier life styles for all Americans, especially through health promotion initiatives at the worksite.

Working Well—Specifically, WELCOA focuses on building Well Workplaces—organizations that are dedicated to the health of their employees. The Well Workplace process provides business leaders and members with a structure or blue print to help their organizations build results-oriented wellness programs. Ultimately these programs help employees make better lifestyle choices, and positively impact the organization’s bottom line. To date, over 700 companies have received the prestigious Well Workplace award.

Leading-Edge Wellness Information—In addition to helping organizations build structurally sound wellness programs, WELCOA serves as a national clearinghouse and information center on worksite wellness. WELCOA responds to thousands of requests for information and materials by publishing a number of source books, a monthly health and wellness newsletter, an extensive line of brochures, as well as conducting numerous training seminars.

Wellness Council of America [WELCOA]9802 Nicholas Street, Suite 315 | Omaha, NE 68114ph: (402) 827-3590 | fx: (402) 827-3594 | www.welcoa.org

Financial Wellness Goes Mainstream… WELCOA Report Available At No ChargeA perfect storm is brewing. Personal savings rates are declining, people are relying more on credit, social security is questionable, and employers are shifting to defined contribution plans. Given these factors, financial wellness is emerging as a major priority in U.S. business. In this report, WELCOA presents important information that will help worksites to meet the looming financial crisis for American workers.

To access this report at no charge, visit http://infopoint.welcoa.org/absolute/index.php.

about David Hunnicutt phd

about Jeff S. Rubleski mba

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only will you see improvement in utilization of benefit programs, you’ll empower your employees to make better financial decisions. In these challenging economic times, enhanced financial knowledge will give your employees the best opportunity to make solid choices to improve their personal financial wellness now and in the future! H

can give organizations a sustainable, competitive advantage. By tying in employee financial education to wellness offerings, a “leveraging effect” should take place, as employees will understand how their personal finances impact the financial choices they make at work (through benefit plan choices) and choices they make in their daily lives. Financial wellness programming can also serve as an excellent entry point for those who have not participated in traditional wellness programming. The relatively low cost of basic financial education programming can pay huge dividends for your wellness program and for the financial health of your workforce.

Act Now…By implementing the ideas listed, you will take measurable, cost-effective steps to optimize the investment your business has in its benefits programs and in the financial health of your employees. To increase the effectiveness of your efforts, be sure to incorporate personal financial education for your workforce. Not

Distribute objective personal finance materials to boost

employee financial wellness—a good source of objective and targeted information can often be found through your pension plan administrator and from a variety of websites. Some of the large mutual fund companies have excellent resources that will help employees to better understand important issues related to diversification, asset allocation, market timing, compound interest, systematic saving and investing, etc. Sites to evaluate for additional information include Fidelity.com and Vanguard.com.

Incorporate “financial wellness” into your employee wellness

programming—businesses of all sizes have come to realize the strategic importance of employee wellness in improving the health and productivity of employees. Furthermore, a healthier workforce uses less healthcare services and the corresponding savings in premium costs and productivity

All information ©Wellness Council of America (WELCOA) 2009. WELCOA provides worksite wellness products,

services, and information to thousands of organizations nationwide. For more information, visit welcoa.org.

Suggested Citation: Rubleski, J. (2009). Financial Wellness. WELCOA’s Special Report.

Dr. David Hunnicutt is the President of the Wellness Council of America. As a

leader in the field of health promotion, his vision has led to the creation of numerous publications designed to link health promotion objectives to business outcomes.

Jeff S. Rubleski is Director of Sales Strategy for Blue Cross Blue Shield of

Michigan and Adjunct Professor of Finance at Grand Valley State University. He is an employee benefits expert, with expertise in defined contribution pension plans, healthcare financing, comprehensive employee wellness programming, consumer-directed healthcare and personal finance.

Register Today—WELCOA Webinar!Financial Wellness In The Workplace July 15, 9:30 AM-11:00 AM Central TimeWith the economy in uncharted territory, employees are being supremely stretched to make ends meet. Sadly, when it comes to managing personal finances, many employees lack the basic knowledge and skills to effectively make ends meet. As a result, scores of employees are experiencing unrelenting stress and the accompanying health consequences of being pinched financially.

In this Webinar, financial wellness expert and author, Jeff Rubleski will address the need for incorporating financial wellness programs into the general health promotion mix of programs and services. Specifically, Mr. Rubleski will share how financial wellness programs can be set up within a workplace and what specific principles and topic areas need to be covered in order to equip employees with the knowledge and skills necessary to remain financially healthy.

Free to WELCOA Member Companies—Member’s register at: welcoa.org/surveys/fillsurvey.php?sid=100$69 for all others—Reserve your spot at: welcoa.org/store/TR010.html

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“The 10 Steps To Financial Wellness is an illuminating, practical and factual must read for anyone seeking financial stability at any stage of life. The chapters that focus on employer-sponsored benefits, saving/investing and insurance are an invaluable guide for maximizing employer provided benefit programs for every working American.”

— Arthur A. Fabbro, Jr. Director, Total Compensation Magna International, Inc.

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Information may not be reproduced, copied, cited, or circulated in any printed or electronic form without written permission from the publisher. The information contained in this document has been carefully reviewed for accuracy. It is not intended to replace the advice of your physician or health care provider. Any mention of supplemental products or services in this publication is strictly a suggestion, not an endorsement.

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