The need for a financial wellness program is well documented, but the biggest pushback we often hear from employers is the lack of a budget to help pay for it.
While the benefits and savings from a financial wellness program are often large enough to pay for a program on their own, employers sometimes struggle to find extra money in the budget to implement a financial wellness program.
Below, we’ve broken down some traditional and non-traditional ways of paying for a financial wellness program.
The simplest way to pay for a new financial wellness program is using your organization’s general wellness budget. After you’ve gotten an idea for how much a financial wellness program will cost by talking to a program administrator, paying for it directly from the business’ budget may make the most sense.
Some organizations have wellness and benefits budgets allocated long before the fiscal year begins and HR can use their discretion to allocate these funds as they see fit.
While the ROI from a financial wellness program may take a few months to a year to manifest, if you have the cash on hand to implement a financial wellness program, the sooner you can implement a program, the sooner you’ll reap the benefits.
ERISA Budget Account
While retirement accounts and plans are different across almost all organizations, one thing they may share in common is an ERISA budget account.
An ERISA budget account is a separate account that can help you pay for ongoing education and wellness initiatives. After the retirement plan has deducted its administrative fees and operational costs, a portion of the remaining funds may be placed into an ERISA budget account.
These remaining fees can be used by the employer to help cover a range of unforseen or additional costs like legal fees or on programs that directly benefit its participants, like a financial wellness program.
Talk to your plan provider to see if there are additional funds available in an ERISA account for your current retirement plan and if you can use them for a third party financial wellness program outside of the plan.
Health and Wellness Services
Similar to additional funds allocated in a retirement plan in an ERISA account, your current health insurance and wellness provider may have a budget set aside for third-party wellness initiatives.
Financial wellness programs are able to reduce employee stress and boost employee happiness, which means they may fall under the umbrella of being able to be a relevant expense as part of a wellness budget.
If your current healthcare plan has an education and training budget that can be used to help employees lower their healthcare costs or boost their overall mental wellbeing, a financial wellness program may fall under the list of approved programs you can use your budget for.
Learning and Continued Education Budget
Finally, your organization may already have a budget in place for continued education for its employees. If you work at a large organization, you may have a Chief Learning Officer on staff whom you can talk to about continued learning opportunities for your department or for the organization as a whole.
Businesses allocate money to continued education for their employees to boost employee retention and to attract better candidates over time. Talk to your CLO about the opportunity for a financial wellness program.
Paying for a financial wellness program is often the biggest bottleneck employers face when trying to introduce a new program. But if you are able to justify the cost by showing that employees who are engaged with their personal finances and less stressed about them can save organizations up to $3 for every $1 invested, you may have an easier time justifying the cost to the organization.
Additionally, you may already be paying for continued educational opportunities for your employees and not be aware of it.
Talk to your health and financial program providers about additional budgets you can use to help pay for a financial wellness program.
If we missed anything, let us know. We’d love to hear from you.