Plan executives told to take holistic view on financial wellness

Financial wellness should be looked at holistically, especially when issues like health-care expenses and student loan debt are considered in addition to retirement savings, panelists said at Pensions & Investments' recent East Coast Defined Contribution Conference.

Health savings accounts present a relatively untapped retirement investment opportunity. According to Devenir Group, an adviser and consultant to the HSA industry, there was an estimated $45.2 billion in HSA assets at the end of 2017 — but only $8.3 billion of that total was investments.

One way sponsors can accelerate participants' interest is to personalize HSAs in their communications, said Kenneth Forsythe, assistant vice president for retirement product strategy and ideation at Empower Retirement. Sponsors must make the HSA experience "as easy as possible," he said during the session on "HSA shift from health coverage to additional retirement savings."

Mr. Forsythe said Empower Retirement research demonstrates a greater need for participant education. For example, a 2017 survey showed only 22% of participants understood the triple-tax free nature of HSAs, while 56% confused HSAs with flexible spending accounts. However, the survey also showed 72% were interested in opening an HSA and 80% agreed that it could be a health-care savings vehicle.

How employees can make long-term decisions to prepare for retirement when they are struggling with student loans was the topic of another session.

Helping employers assist workers in dealing with and/or paying back student debt is a good strategy for retaining and recruiting employees, said Asha Srikantiah, vice president for workplace investing emerging products-Fidelity student debt program.

There's plenty of opportunity for employers to act, according to Fidelity research, because more than one-third of plan participants have outstanding loans, she said.

And don't think student debt is just a problem for the youngest workers, she added. Fidelity research found 24% of baby boomers had outstanding student debt, and so did 36% of Generation X. Among millennials, 63% of workers had student debt.

Helping employees deal with student debt enables sponsors to differentiate themselves from competitors and enables participants to better plan for retirement, she said. For example, 79% of respondents in a Fidelity workplace survey said student debt interferes with their retirement.