Meet Debbie Westover, SoFi’s Senior Benefits Manager
According to the CFPB, industry surveys define financial wellness programs as “those that assess and support an employee’s ‘complete financial picture’ or the ‘overall financial health of an individual.’” To shed some light on this topic, we talked to SoFi’s own senior benefits manager, Debbie Westover.
Some of Debbie’s responsibilities include developing, designing, and administering employee benefit programs—making her a great resource on ways employers can satisfy the benefit desires of employees while still balancing their own financial and strategic priorities.
Here’s just some of what she had to say about helping employees reach their financial goals.
“I believe we’ll see an increase in the number of employers who are offering a holistic financial wellness program, a program that’s integrated with companies’ overall benefits strategies. There are many ways in which to engage employees in this regard, including personalized, one-on-one financial counseling and/or coaching, while utilizing technology to measure their progress in debt reduction and their overall financial goals.”
In 2019, student loan debt is undoubtedly a challenge faced by many employees. This includes the millennials and Gen Z-ers who struggle with their own debt, as well as baby boomers who may have returned to school for advanced education, or who may be helping their children with student loan debt.
As Debbie looks to the future, she believes that increasing numbers of employers will provide student loan debt reduction programs to employees. This is true, in part, because of how fierce the competition for millennial talent will likely become.
“Currently, many employers are still debating whether they can provide this type of assistance, or whether it’s too much of a financial burden for them because, after all, it can have some serious financial ramifications,” Debbie said. “Employers must look for ways to stand apart from the crowd to recruit, engage and retain employees, and student loan assistance is a key differentiator. [It’s] a type of benefit that not a lot of employers are currently offering.”
What’s Moving to the Forefront
The overwhelming amount of stress that many employees are experiencing because of their financial situation, including a lack of savings, is becoming a big part of the human resource conversation.
In order for more employers to be willing to offer student loan debt reduction benefits, Debbie believes that more conversation needs to take place around how their contributions to student loan debt can become tax deductible. “Right now, it’s a straight cost to the employer,” she said, “with no reduction in their tax liability.”
That is why SoFi has joined forces with the consumer advocacy group, DebtFreeTaxFree.
Debbie also believes there should be more discussion around how employees are often struggling to save for their retirement because of high student loan debt. “There have been some attempts,” she said, “to solve this by integrating loan repayment and retirement savings. Unfortunately, the rules around 401(k) plans are complicated, and so these approaches have not taken off.”
Here’s another issue that needs to be addressed, according to Debbie—that student loan assistance only benefits a certain employee population. “I often hear,” she said, ‘What about me?’ In other words, if an employee doesn’t need assistance in paying student loan debt, he or she may not feel that such a program is equitable.”
An alternative approach could allow employees to pick their benefit of choice. Debbie lists student loan repayment, additional parental leave or a 401(k) match, as some potential examples.
Options to Consider
Currently, companies are helping (or considering helping) their employees in multiple ways, including:
• Converting unused PTO into a payment against student loan debt: “What’s nice about this approach is that employers have already accrued this expense for PTO.”
• Allowing unused sick time to roll over, rather than causing employees to lose this time
• Using a student loan program to promote lifelong learning for older workers
• Combining student loan repayment benefits with overall well-being; this partnership allows companies to focus their efforts on financial literacy and retirement programs
• Offering support by providing qualified financial professionals for debt counseling and financial planning through expert-led programs
• Allowing employees to use a percentage of their employer-matched retirement benefits to pay down their student debt
• Offering signing bonuses to help pay down student loans, along with a second bonus if the employee is still with the company after five years
• Adding an option for employees to benefit from a student loan reduction payment on each work anniversary, with increasing amounts for each year that the person stays with the company
At SoFi, our goal is to help people reach financial independence so they can realize their ambitions–and Debbie truly believes in a holistic approach to achieve this.
Yes, tackling the student loan debt challenge is a key component for many employers who want to recruit, engage, and retain talent, but holistic financial wellness also includes a focus on additional financial matters of importance: budgeting, savings, debt reduction beyond student loans, retirement planning, investing and more.
“So,” Debbie said, “the more financial education that employers can provide, the better. If the only focus is on student loans, then employees will lose out on about ten years of their retirement planning. So a focus also needs to be put on encouraging employees to not put off saving for their post-work years.”
Adding Voluntary Benefits to the Workplace
As employers consider what benefits to offer their employees, they naturally want to offer programs that offer the greatest advantages in the most cost-effective way for the company. Some companies conduct pilot programs, starting with a small population of employees to determine if a particular program works, both for the employees and for the employer and their budgets.
Offering financial wellness-related voluntary benefits can help companies stand out from the competition. They may also help boost morale and productivity as employees (hopefully) start feeling less anxious and stressed out over their finances.
Because of that, when these benefits are offered, there can be an increased sense of loyalty to the company, which can be a real plus when it comes to retention rates and employee engagement. Debbie points out that these voluntary programs can be added at any time during the year.
“Voluntary benefits are a great way to have ongoing employee engagement in benefits throughout the year,” she said. “In many respects, it may be better to add voluntary benefits outside of open enrollment so the messaging and offering does not get lost.”
Communicating Voluntary Benefits to Applicants and Employees
Student loan repayment programs are a very hot topic, both in the news and for people who carry this debt. This benefit would be a welcomed addition to recruitment information, from job postings and career pages, to pre-hire marketing materials and more. Company recruiters should be well-trained in communicating these benefits so they can promote them to job candidates.
If your company decides to integrate financial wellness programs into your overall benefits strategy, you can highlight these benefits in employee communications, promoting the program to them.
Then, for employees who have signed up, you can provide real-time information on contribution portal dashboards, including how an employee’s debt has decreased because of access to this program. For example, information can include information on the loan servicer, when a payment was made, how to update a loan servicer online, answers to frequently asked questions and so forth.
We hope you’ve enjoyed meeting Debbie Westover and learning more about her perspectives on company-based financial wellness programs! If you’re looking for a way to build a program at your company, SoFi offers an easy and comprehensive way to provide unique employee benefits focusing on student loan contributions, refinancing, and education.
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