Financial Literacy

Janet Parker Speaks on financial literacy

Janet Parker, SPHR, Board Chair of the Society for Human Resource Management, discusses representing the profession and SHRM on the President's Advisory Council on Financial Literacy.

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Identifying Retirement Scams

The Financial Industry Regulatory Authority (FINRA) has issued two resources to help companies and their employees identify and avoid early retirement scams:

Help Your Employees Achieve Their Retirement Dream: Tips for Spotting Early Retirement Scams. This FIRNA brochure offers tips for HR professionals on how to evaluate the financial professionals involved in early retirement seminars and the seminar materials such as invitations, slides, handouts and scripts. Company representatives may also refer early retirement seminar materials to FINRA for review if they have concerns.

Early Retirement Seminars 101: Smart Tips for Spotting Retirement Scams. FINRA offers advice for alerting employees to the pitfalls of early retirement schemes.

SHRM Express Request

Employers who offer a variety of options including, financial planners, credit/debit counseling and other financial educational opportunities credit these programs with increased retention, lower training costs and higher productivity. A 2007 survey of the winners of Best Companies for Employee Financial Security found their average turnover rate was 7.7 percent -- compared to the national average of 21.6 percent. SHRM members can receive additional information and resources on this topic by using the Express Request service, key term TRAINING FOR FINANCIAL FITNESS.

Did you know that April is Financial Literacy Month?

Here’s a shocking fact:

The personal savings rate in the United States dropped to 0 percent at the end of 2007, the lowest rate since the government began collecting the data in 1959. In light of our poor savings record, Congress has passed a resolution declaring April to be “Financial Literacy Month.” This is a time to focus on expanding Americans’ knowledge of finances -- from elementary school student to retirees.

Why should HR professionals care about financial literacy?

Recent studies have shown that one in four American workers are financially distressed. Yet, in a poll conducted by the Society for Human Resource Management, fewer than half of organizations said they offered financial planning advice.

In a SHRM webcast, speaker Joe Saari, a registered investment advisor, explains why helping employees develop a personal financial roadmap can pay employer dividends in terms of worker productivity and engagement. View this webcast here.

In a SHRM video, Gary Kushner, president of Kushner & Co., discusses the benefits of offering customized retirement advice to employees in his SHRM webcast on investment. View this video here.

What can HR professionals do to improve financial literacy in the workplace?

SHRM’s Board Chair, Janet Parker, is currently working to help answer this important question. Ms. Parker was appointed to the President’s Advisory Council on Financial Literacy by President George W. Bush on January 22, 2008. The Council’s purpose is to help keep America competitive by assisting Americans in understanding and addressing financial matters. Each member of the Council is involved in some way with the delivery of financial education to American citizens.

As Chair of the SHRM Board, Ms. Parker’s participation on the Council is recognition that human resource professionals have an important role to play in helping employees manage health care costs, save for a home or tuition, prepare for retirement, and plan other aspects of their financial future. At the inaugural meeting of the Presidential Council, Ms. Parker shared her thoughts on the importance of the Council. View her remarks here.

For more information on the Presidential Advisory Council on Financial Literacy and a list of the Council members, visit the Presidential Advisory Council on Financial Literacy home page.

How can HR professionals provide individualized investment advice?

The Pension Protection Act (P.L. 109-280), signed into law on August 17, 2006, made it easier for employers to provide employees with specific, personalized investing advice for their defined contribution retirement accounts. The changes brought about by this law are still being explored. A recent article in HR Magazine discussed strategies for helping employees plan for retirement. An article from SHRM's Compensation and Benefits focus area offers tips on identifying outside vendors that can provide investing advice to your organization’s employees.

There are many free tools you can refer employees to that can help them determine how much they should be saving for retirement. For example, on its "Choose to Save" web site, the Employee Benefits Research Institute (EBRI) offers an online "ballpark" calculator. This tool shows users how much they need to save to retire at a certain age and with a certain income.

How can HR professionals help the President’s Council on Financial Literacy?

The President’s Council on Financial Literacy recently published a request for comment in the Federal Register. Council members like SHRM Board Chair Janet Parker want to hear your thoughts on how to address the following areas for financial literacy: young people; the workplace; underserved markets; research and outreach; and public awareness.

The Council is seeking your assistance in answering the following workplace-related questions:

What financial education issues should be addressed in the workplace?
How can financial education best be provided in the workplace?

Please send your comments to nhammer@shrm.org by May 12, 2008. SHRM will compile your recommendations for submission to the Council.