Credit card, auto, housing, medical, and student loan debt create high levels of financial stress for many Americans, negatively affecting their ability to participate in benefits programs and adequately prepare for retirement. The City of Memphis is taking steps to help employees manage debt and achieve financial security through financial wellness programs.
At the Spring 2022 Policy Forum recently hosted by the Employee Benefits Research Institute, Alex Smith, Human Resources Manager for the City of Memphis, described some of the programs the city has in place to help its employees. employees manage their debts, potentially improving their engagement at work. , and improve their retirement planning.
According to Smith, the goal of the City of Memphis is to build an engaged workforce that will work every day to improve the quality of life for all Memphis residents. To help its workers manage debt and reduce financial stress, the city of Memphis offers several innovative financial literacy and financial health programs, described by Smith. These programs include:
Free financial advice. This program offers one-on-one counseling with a financial advisor, in-person and virtual workshops on a variety of topics, including building and increasing credit scores, creating a budget, managing money and home ownership. According to a 2021 snapshot of the program, Smith said, 74% of employees saw an improvement in their credit score and 33% of employees achieved a score of 660 or higher and a +15 point change in FICO score.
Contribution to student loans. The City of Memphis provides its employees with student loan contributions of $50 per month. To qualify for this program, employees must work full-time and have 12 consecutive months of employment. In 2021, Smith said, 522 employees were enrolled in this program, which generated more than $313,000 in savings ($600 in savings per year per employee).
Tuition reimbursement. Employees who qualify for this program may receive tuition and fee assistance of up to $3,000 for undergraduate degree/diploma programs and $2,000 for certificate programs per exercise. From 2020 to 2021, 175 employees were enrolled in the program and reimbursements totaled more than $422,000.
Memphis Employee Credit Union Membership. The City of Memphis offers new employees a free savings account and free membership in the Memphis Employee Credit Union. There is also a $100 offer for new checking account members, as well as direct deposit and payroll deduction options.
Caisse members also have several account options, including IRAs, money market, and CDs. Plus, they enjoy low interest rates on car, mortgage, and debt consolidation loans.
Retirement support program. Under this program, employees receive a variety of services, including one-on-one counseling for assistance with pension plan enrollment, investments, and account review.
Plus, they get help reducing debt before retirement and have access to a full-service financial wellness website that features topics on transitioning to retirement, smart spending, saving, investing and estate planning. Employees also have a retirement calculator to work out how much money they’ll need to cover their desired retirement lifestyle.
Debt management programs
During his presentation, Smith suggested several steps organizations can take to effectively transform the debt management programs they offer their employees. Smith recommended that organizations challenge the status quo, conduct a needs assessment of their employees to determine their specific needs and wants, create effective partnerships, engage in targeted communication with all parties stakeholders and always strive to be flexible and adaptable.
Ayo Mseka has over 30 years of experience reporting on the financial services industry. She was previously editor of NAIFA’s Advisor Today magazine. Contact her at [email protected].
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