!!!!!!Financial Wellness: Impacting the Bottom Line There are many different ways to calculate the impact of an employee financial wellness program on an organization’s bottom line, but the main drivers of cost savings are: !

• Short-term SavingsThis includes savings related to:

• Increasing employee productivity and reducing absenteeism • Lowering stress and associated health care expenses • Reducing social security taxes through educating employees on flexible benefits accounts !

• Long-term SavingsRelated to helping employees not having to delay retirement, foregoing additional years of paying both disability and health care premiums !!

Short-term Savings!In the short-term, each financially distressed employee costs the employer $2,024 per year  . If you 1

break that number down, it looks like this:!• $450 in positive job outcomes, since financially troubled

employees are absent more than others and they waste more time at work dealing with personal financial problems. Typically, at least two-thirds of employees deal with financial matters at work. Another way to calculate costs related to reduced productivity and increased absenteeism is to assume that for every 100 employees on the payroll, a company loses 22.5 person days of productivity per year due to financial distress.  2!

• $300 in lower health care costs for each employee who improves his or her financial behaviors and financial well-being. These health care savings are due to a reduction in anxiety, insomnia, headaches, and depression, as well as an inability to afford or access recommended health maintenance practices and health care services.!

• $1,274 for employers offering and promoting flexible benefits accounts, such as HSAs, by reducing the amount the employer has to pay in social security taxes.

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Short-term Financial Wellness Savings

63% 15%

22%

Positive Job OutcomesLower Health Care CostsTax Savings from Flexible Benefits Accounts

� Employers Waste $750 to $2,000 Annually on Each Employee's Poor Money Management Behaviors, June 21, 1

2006: http://www.pfeef.org/press/press-releases/Employers-Waste-Money.html

� Why Employers Should Care about their Employees Financial Wellness by Paul Squires and Richard LoFredo; Oct 2

9, 2012: http://www.corporatewellnessmagazine.com/article/why-employers-should-care-about-their-employees-financial-wellness.html

!Long-term Savings In the long-term, health care and disability income insurance premiums increase dramatically with age. Therefore, an older workforce that cannot afford to retire will cost the employer approximately $10,000 in insurance premiums per employee per year once an employee is in their mid-sixties, when compared with an employee in their 40s. However, older employees are not “all downside” and the positive qualities of older workers are documented in the Department of Labor research paper "Employer Strategies for Responding to an Aging Workforce  .” A more appropriate employer cost should be 3

estimated to be around $7,000 per employee per year, when factoring in the positive qualities of older workers. !Therefore, it can be calculated that if a financial wellness program can help an employee retire on time and not have to defer retirement for one year, an employer can realize a $7,000 savings per employee. Employee tenure once they reach 55 years old is approximately 55%. It can be assumed that roughly half of all employees in the 55-65 age range will retire at their current employer. If an employer just focuses on this group, they can realize significant savings on the long-term expenses related to employees having to delay retirement. !Other bottom line financial wellness cost factors that are not included in the Retiremap ROI calculation, but bear mentioning, are: !

• Turnover and retraining costs The turnover cost savings is based on the percentage of seriously financially distressed employees for whom a financial wellness program has an impact substantial enough to prevent them from leaving their employer. The Personal Finance Employee Education Foundation has a financial wellness ROI calculator (http://personalfinancefoundation.educatedinvestor.com/fss/ROICalculator/calculator.html) that includes employee turnover in its calculation. The calculation uses national cost figures and a conservative rate for annual turnover. It also includes costs-per-hire, as well as retraining costs. In the PFEEF calculator, turnover represents approximately 40% of the employer cost savings.!

• GarnishmentsEmployer costs for garnishments considers both the direct costs of the number of garnishments and the amount of payroll-staff time needed per employee to process garnishments. In the PFEEF calculator, garnishments appear to represent less than 5% of the employer cost savings. !!

Retiremap and Financial Wellness The Retiremap program can help plan advisors achieve a significant ROI for their plan sponsor clients by putting in a place an engaging financial wellness program that uses today’s technology to help employees improve on both the short-term and long-term cost factors. !!Calculate a Plan Sponsor’s ROI with Retiremap In addition to realizing Retiremap’s ROI for plan sponsors, depending on the plan advisors’ business model, Retiremap can also help advisors generate revenue. !Both the plan sponsor and advisor ROI can be modeled using this online spreadsheet: http://goo.gl/cmeyvo [case sensitive] !More Information To learn more about Retiremap, please contact Matt Iverson at matt@boulevardr.com or 415.250.6727

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� Employer Strategies for Responding to an Aging Workforce, Francine M. Tishman, Sara Van Looy, and Susanne M. 3

Bruyère; March 2012. http://www.dol.gov/odep/pdf/NTAR_Employer_Strategies_Report.pdf