How SECURE 2.0 Helps with Employee Financial Wellness: PSCA National

SECURE 2.0 was front and center for much of PSCA National, with many sessions detailing how it can be leveraged by plan sponsors to supercharge their offerings.

Are plan sponsors fully utilizing emergency savings and understanding the attractiveness of student loan matching to a younger generation? Perhaps not, according to moderator Will Hansen.

The panel consisted of Liz Davidson from Financial Finesse Ventures, Tim Kohn from Whole Foods and Will Sealy, co-founder of Summer, who discussed emergency savings, student loan matching and how planning for the long-term can lead to better financial resilience for employees.

Holistic Approach to Financial Wellness

Hansen opened the discussion with a simple question directed to Davidson, "Why should plan sponsors care about financial wellness?"

Davidson talked about the many changes SECURE 2.0 has brought to the industry, including how it brings a more "holistic" approach for plan sponsors. Within that "holistic" approach, plan sponsors should change their thinking from taking a simple approach to enrollment to looking at it from the goal of helping people become financially independent.

Building a strong financial foundation was also a big point of Davidson's statement on how building a strong financial foundation starts with an emergency savings plan and having financial resilience. Such as an employee being able to withstand shocks in life without needing to take out withdraws and loans.

"Can you have employees that are much more productive, engaged, happy, and healthy? The impact of financial stress on your physical and mental health?" Davidson asked attendees.

You can, according to Davidson but it starts with developing the long-term roadmap for where your company (and employees) are going and using the data to see where the real impact could be.

"Look at the impact [your plan] has had on whatever that goal is. Whether it's improvements in certain benefits, participation, numbers, preventing deferral rates, reductions in loans and even employee satisfaction."

Look for Answers in the Data

Tim Kohn, who had transitioned from a service provider to plan sponsor, talked about the difficulties he has found in the transition and how rewarding it has been.

"I love the ability to focus on the strategy [of plans] and what we can implement."

What does it take to help employees across the nation reduce their financial stresses? Kohn's approach at Whole Foods is getting data from your record keeper and pouring through the financial wellness checks. The data indicated to Kohn that emergency savings and debt management are paramount.

"People want help saving for an unplanned emergency."

Gen Z Wants Financial Options

Will Sealy, who Hansen refused to call "Will 2.0" despite cries for it from the audience, talked about Summer's work with plan sponsors on student loans.

"The workplace has 35%, on average, employees with student debt in their name. But when you look at it from a household, [many] employees are buried in debt."

According to Sealy, there's a perception that student debt falls on younger generations as they navigate their loans while parsing a career. Surprisingly, the fastest growing group of student loan borrowers are people aged 50 and older.

Sealy also explained the average Gen Z worker's mindset while looking for employers.

The student loan provision in SECURE 2.0 allows employers to match employee student loan payments, so potential employees' "ears may perk up a bit." A retirement match might be attractive for a student with $80,000 worth of student loans, as retirement thinking isn't front and center.

Hansen announced that PSCA National will take place in Salt Lake City from May 15 to May 17 at the recently opened Hyatt Regency.

Room rates should be similar to 2023 and Hansen expects the audience to be upwards of 700—between a mix of plan sponsors and service providers.