Increase Profitability Through Financial Literacy Restore productivity and regain organizational commitment through employee financial well-being WHITE PAPER

Corporation goals today are to maintain productivity and increase profitability in a declining sales environment with fewer staff. The changes in business over the last five years have seen attrition rates escalate, putting a greater amount of work and responsibility on fewer people. Payroll has been frozen, bonuses cut, employee benefits reduced and pensions jeopardized. This has resulted in greater stress, illness, absenteeism, presenteeism and lack of organizational commitment. All of these symptoms compound the problem of achieving the corporations goals. By delivering a comprehensive financial literacy program for the employees, the employer can help them to use their benefits and pensions better, reduce their stress and their anxiety. This reduces their likelihood of illness, absenteeism, presenteeism, and restores their faith and commitment to the organization.1,2 Financial literacy programs can help organizations restore productivity and increase profitability to ensure a positive return on investment (ROI). This paper will help you recognize some of the signs and symptoms of financial distress among your employees and will illustrate how a lack of financial knowledge can lead to health problems and poor work habits. You will learn that by implementing a financial well-being program for your employees, you can help to increase job productivity and ultimately help your bottom line. Be sure to take a few minutes to watch the video on page 6 that explains how employers profit when they care about employee financial literacy. As an independent third-party of experienced, accredited, unbiased financial educators, we can work with your organization to develop and deliver customized financial well-being programs for your organizations employees. Financial literacy programs can help organizations restore productivity and increase profitability. Executive Summary 1 Prawitz, A.D., Garman E.T., (2009) Its time to create a financially Literate Workforce to improve the bottom line. www.pfeef.com 2 Garman, E. T., Junk, V. W., Kim, J., ONeill, B. J., Prochaska-Cue, K., et al. (2005). Financial Distress Among American Workers-Final Report. Personal Finance Employee Education Foundation. Available at http://www.personalfinancefoundation.org/features/feature-3full.html. 2014 Employee Financial Well-Being 2 Increased Profitability +ROI Increased Productivity Financial Literacy

Many studies have demonstrated that financial knowledge has a direct link to personal well-being. More accurately, that financial distress leads to health problems such as stress, irritability, anger, fatigue, and sleeplessness. These symptoms inevitably lead to the development of other more significant health problems that affect employees commitments at work.3 These health problems have been linked to: increased absenteeism; presenteeism; reduced productivity; reduced morale; increased employee turnover, and; a lack of organizational commitment. Add all of these issues on top of the increased health benefit costs that rapidly rise year over year, and the total cost to employers is significant.1, 4, 5 Most of the costs associated with these problems arent easily seen in the ways that health benefit costs are seen on a company balance sheet. Make no mistake, these cost are real and should be addressed.1 Many employers have trouble accepting that the return on investment (ROI) of financial literacy programs is positive as they struggle with calculating the loss due to poor productivity and health of employees. The reality is that if an investment of $1 yields a return of just $1, that means that the benefit is essentially FREE!1 Employees want and value employer-provided financial education and support. Those who participated in financial education programs have more respect for their employer and manage their money better.6 As businesses continue to shift the risks of retirement and health benefit funding from themselves to the employee, they should be prepared to take some responsibility to provide clear, comprehensive financial education programs for the employees.7 By providing employees with comprehensive, independent, unbiased financial education programs, employers will see substantial returns through increased productivity, lower absenteeism, lower health care costs, and greater organizational commitment and morale. Financially healthy employees can save employers up to $2,000 a year through increased productivity, reduced health care costs, better choices among employee benefits, and a variety of other ways. Personal Finance Employee Education Foundation (PFEEF) Introduction 3 Aversa, J. , Associated Press, (2008) Stressed Over Debt Taking Toll on Health. 4 Kim, J. (2004). Impact of a workplace financial education program on financial attitude, financial behavior, financial well- being, and financial knowledge. Proceedings of the Association for Financial Counseling and Planning Education, 22, 82-89. 5 Mayer, R. C., & Schoorman, F. D. (1992). Predicting participation and production outcomes through a two-dimensional model of organizational commitment. Academy of Management Journal, 35, 671-684. 6 MetLife. (2008). Sixth Annual Study of Employee Benefits Trends: Findings from the National Survey of Employers and Employees. Available athttp://www.whymetlife.com/trends/downloads/MetLife_EBTS08.pdf. 7 Braunstein, Sandra, and Carolyn Welch. 2002. Financial Literacy: An Overview of Practice, Research, and Policy. Federal Reserve Bulletin (November): 445-457. Washington. 2014 Employee Financial Well-Being 3

Over the past decade, researchers have studied the relationship between financial stress and health, and have consistently found that those who report greater financial distress also report poorer health.8 In a 2009 survey by Desjardins Financial Security, 61% cited money as their number one stressor. In the United States, the percentage of financially distressed citizens is 30%.9 Research has found that individuals who report more financial distress also report poorer health. The quantity and quality of the work produced by employees who experience poor health are decreased and unhealthy workers will likely be absent from work more often. Employer health costs also are higher for such workers.9 A recent survey reported in USA Today indicated that distress over financial matters is contributing to irritability, anger, fatigue and sleeplessness for more than 52% of Americans. People who reported high stress were also much more likely to have trouble concentrating and sleeping and were more prone to getting upset for no good reason. There are many studies that can clearly link financial distress due to poor financial knowledge and habits to poor health and productivity. Given these facts, employers will be better off by educating employees. More than 52% indicated distress over financial matters contributed to irritability, anger, fatigue and sleeplessness. USA Today Poor Financial Knowledge Leads to Health Problems 8 Bagwell, D. C. & Kim, J. (2003). Financial stress, health status, and absenteeism in credit counseling clients. Journal of Consumer Education, 21, 50-58. Retrieved fromhttp://www.cefe.illinois.edu/JCE/ archives/. 9 Garman, E. T., Sorhaindo, B., Prawitz, A. D., ONeil, B., Osteen, S., Kim, J. et al. (2003). Development of and norms for the InCharge Financial Distress/Financial Well-Being Scale: A summary. Consumer Interests Annual, 51, 233-238. 2014 Employee Financial Well-Being 4 27%had ulcers or digestive tract problems, compared with 8% of those with low levels of debt stress 44%had migraines or other headaches, compared with 15% 6%reported heart attacks, double the rate for those with low debt stress 29%suffered severe anxiety, compared with 4% 23%had severe depression, compared with 4% 51%had muscle tension, including lower back pain, compared with 31% of those with low levels of debt stress 11 People with high debt stress Source: Aversa, J , Associated Press, (2008) Stressed Over Debt Taking Toll on Health

Employees with money problems are like sharks swimming around the workplace taking bites out of the bottom line Dr. Thomas Garman When employees are financially distressed their level of productivity declines, they are absent from the workplace more often, tend to have lower morale, and greater disregard for the organization. While at work, these problems have a ripple effect on other employees. Financial distress has negative workplace outcomes At any given time, 15% 30% of the workforce is seriously financially distressed.1 A number of studies have examined relationships between financial distress and workplace outcomes. Researchers have found that financial distress spills over into the workplace, contributing to personal finance-work conflict, lower commitment to the organization, less satisfaction with pay, increased presenteeism and absenteeism, and poorer health.1 Clearly, such occurrences can decrease job productivity, a condition of special interest to employers. Pay satisfaction Those with greater financial distress are less satisfied with their pay, regardless of the amount of money they make. Dissatisfaction with pay is a concern for employers as well as employees, because it could lead to increased turnover. Employee turnover represents a huge cost to employers in the form of recruitment, interviewing, training and other expenses.1 Presenteeism Researchers have examined the relationship between financial distress and amount of time at work wasted dealing with personal financial issues. The amount of worktime lost due to presenteeism is three times greater than absenteeism. Thus, if employees are absent an average of five days a year, their work time lost is actually equal to 20 days a year. Undoubtedly, employees who waste time at work dealing with personal finances will be considered by employers to be less productive.1 Absenteeism Research supports that employees with more financial distress were absent from the workplace more often. It has determined that financial distress represents one of the strongest predictors of illness-related absence from the workplace. Clearly, employees who are absent from work are unable to contribute effectively to productivity in the workplace.1 Employees experiencing financial stress spent 13% of their workday dealing with money matters.10 Consumer Credit Council Services Personal Financial Problems Lead to Poor Work Habits 10 Atkinson, W. (2001). Drowning in debt. HR Magazine, 46(8). 2014 Employee Financial Well-Being 5 Presenteeism Absenteeism 25% 75%

Increased job productivity Employers today need to realize that workers suffering financial woes reduce profits. The effects of financial distress spill over into the workplace as employees struggle with financial problems, thus compromising job productivity. Financially distressed workers often lack initiative and exhibit signs that they are distracted and anxious.1 More profits An effective way to help employees reduce financial distress is by providing appropriate financial education in the workplace. In so doing, employers will find that in addition to a boost in employee productivity, the company also will experience higher profits.1 Significant ROI The return on investment for employers who offer employees easy access to quality financial programs is at least 3:1 or more; thus, for an employer who invests $250 per employee in a financial education program, the expected return is $750.1 Research suggests that financially healthy employees can save employers up to $2,000 a year through increased productivity, reduced health care costs, better choices among employee benefits and a variety of other ways. The bottom line is that the return on a financial well-being program investment is positive. And even if an investment of $1 yields a return of just $1, that means that the benefit is essentially FREE! In the video below, according to Dr. Thomas E Garman, a leading researcher in employee financial education, employers can see a benefit of $450 per employee for even a slight improvement in the personal finances of an employee. The ROI for employers who offer employees quality financial programs is 3:1 or more.1 PFEEF Reducing Employees Financial Problems Benefit Employers 2014 Employee Financial Well-Being 6 $750$250 Please click on image to play video

The simple yet resounding answer is YES, and employees want help from their employers! According to a 2008 MetLife Study of Employee Benefits Trends, a national survey of 1,380 full-time employees, more employees than ever before have indicated an interest in obtaining advice and guidance from their employers for their financial problems.6 The Shepellfgi Research Group examined the frequency and types of EAP accesses (i.e., requests for services) related to financial issues over the years 2007 and 2008. The findings indicate that accesses for financial counseling and consultation are on the rise, at a rate twice that of all other EAP services. Employees want and value employer-provided financial education and support. Those who have participated in the few employer provided financial education programs have been shown to have more respect for their employer and manage their money better.11 Employees are demanding help with personal finances at an alarming rate, with requests for help with debit/credit and financial planning being more than 53% of all requests! Engaging the employee through comprehensive programs that incorporate multiple mediums such as seminars, webinars, workbooks, online exercises, tools and calculators, will help to increase follow-through and ultimately ROI. To help employees succeed, companies need to ensure they have comprehensive and quality financial programs and services for employees and provide them access to Certified Financial Planners (CFP) who will answer their questions, provide guidance, and assist them in taking action. Requests for financial counselling increased at twice the rate of all other EAP services. Shepell-fgi research group Are Employees Ready to Learn About Personal Finance? 11 Hira, T., Financial Education in the workplace; A good Business Practice, Proceedings from Financial Forum II, Vancouver, BC. December 2006. 2014 Employee Financial Well-Being 7 87% Leading Financial Issues Addressed by EAP 2008 0% 5% 10% 15% 20% 25% 30% 35% 40% Bankruptcy Financial Stress (situational) Divorce/Finances Financial Planning Debt/Credit % OF ACCESSES of employees want financial education

During these challenging economic times, employers are always looking for ways to cut costs and expenses. The focus tends to be on the quarterly budgets and balance sheet, where loss of productivity some of their biggest expenses wont show up. Executives quickly look at large items, such as health care costs and pension funding and point to those areas as places to cut to increase margins and profits. These cuts usually come in the form of shifting the cost to the employees and converting Defined Benefit (DB) to Defined Contribution (DC) or company RRSP plans. As employers continue to shift the risk of retirement planning and health benefit funding to the employee, it should be the employers obligation to take on the responsibility of providing clear, comprehensive financial literacy education. Studies suggest that employers that offer DC pension plans have an ethical obligation to offer financial training to ensure their employees retirement security. One might extend the scope of such an initiative to involve unions and financial institutions that sell group and locked-in RRSPs.7 Employees could benefit from a variety of financial education offerings, including budgeting, managing credit, savings, tax and investment planning and goal setting. Unfortunately most employers who provide financial education offer only retirement planning programs. Employers that offer pension plans have an ethical obligation to offer financial education to ensure their employees retirement security.7 Employers Need to Take Back Some Responsibility 2014 Employee Financial Well-Being 8

Study after study demonstrates that employees who are financially distressed suffer poorer health, cost businesses money, decrease profitability, and can slow down a businesss growth. Survey results have demonstrated that employees who are provided with a financial well-being program have: increased productivity; lower absenteeism; lower health care costs, and; greater organizational commitment and morale. Employers should recognize the rapidly increasing demand from employees for financial counseling and take responsibility by providing a comprehensive, financial well-being program. Employers should look at a financial well-being program as an investment rather than a cost. Investing not spending $150 to $250 per employee per year in financial education programs will reap substantial rewards for employers as well as employees. Those rewards will come from an investment of a mere quarter or half of 1% of an employees income.1 The ROI for employers who offer employees easy access to quality financial programs is a least 3:1 and that doesnt include the value of the increased goodwill that is bought in providing such a program.1 The bottom line is that the return on a well-being program investment is positive. It will lead to a better, stronger, more profitable business, both in the short term and for many years to come.9 Financial education leads to increased productivity which improves profitability which ensures a positive ROI of at least 3:1 PFEEF Concluding Summary 9 3:1 ROI$ 2014 Employee Financial Well-Being

10 We develop, deliver and implement customized financial education programs for businesses with 10 to 10,000 employees. We do not sell or manage any products and only provide financial education services. Education Not Information Our programs are designed using the most modern adult education methods to ensure your employees are educated and not just informed. Financial Basics and Much More Our modules cover the entire personal finance spectrum. Lifestyle planning, debt and cash flow to investing, retirement, tax and estate planning make up the core programs. Additional programs on elder care, childrens education and executive compensation are also available. Available in All Formats Seminars, webinars, one-on-one coaching, individual financial planning, self-study, recorded webinars and video are all available. All our education can be taught in most formats. We will work with you to help determine which is likely to be most successful. Delivered by Accredited, Experienced Professionals All our facilitators are experienced at delivering personal financial education. They also hold at least two personal finance designations. This combined knowledge and experience ensures employees questions are answered and the correct information is given. It also increases the rate of change in your employees. Determining Employees Wants and Needs We work with you by conducting a comprehensive survey to help identify your employees wants and needs for a financial education program. We run the survey and conduct a few interviews confidentially to understand the underlying financial concerns of your employees. We use the data to build a proposal recommending the best topics, times and formats to ensure a successful financial education program. Measuring Performance and Defining Success Through our proprietary methods, we assess the employees financial well-being prior, during and post education to be able to measure the change. We work with you to define what success looks like and develop ways to measure the performance of your employees. Program Communication We know that you and your team are busy running a company. To make it easier and help to ensure greater participation and engagement in the program, we have developed a communications package for you to add your names and logos to. From initial communication from the CEO, to the ongoing communication of the various modules, this package takes the work out of getting employees to participate. To discuss the goals of your business and help your employees achieve a better quality of life, please contact Frank Wiginton. Financial Education Its ALL We Do Frank Wiginton, CEO Employee Financial Well-Being frank@employeefinancialeducation.ca employeefinancialwellbeing.ca 416-999-7392 877-227-8201 2014 Employee Financial Well-Being

2014 Employee Financial Well-Being Guide Employee Financial Well-Being 10 steps to successfully implementing an employee financial well-being program Part 3 Learn More About Financial Well-Being in the Workplace White Paper Increase Profitability Through Fiancial Literacy Restore productivity and regain organizational commitment through employee financial well-being White Paper Financial Literacy for Employees Understanding what makes an effective financial well-being program Part 1 White Paper Workplace Financial Education The benefits and rewards of a financially literate workforce Part 2 Guide howtoeatanelephant.ca Infographic 1 Financial Well-Being in the Workplace 87% Financial Well-Being in the Workplace 48%are willing to pay some or all of the costs have not sought financial advice in the last 24 months 51%of employees will participate in financial education 86% $2,000a year employers can save from a financially healthy employee 3:1or more ROI for employers who offer employees quality financial programs $ during work hours during lunch breakat home on my own time on the weekend Preferred formats for receiving financial education: LEARNING EFFECTIVENESSCOST EMPLOYEE PREFERENCE #1 in-person seminars one-on-one coaching #2 live webinars #3 self-study/video tutorial #4 self-study workbook and guides #5 recorded webinars #6 social media and short clips #7 #8 blogs/e-mail/newsletter articles of employees WANT financial education feel that it is very to extremely important to have an EXPERIENCED financial educator providing financial education 86% 80%feel it is very to extremely important to have an ACCREDITED financial educator providing the education Preferred times to participate in a financial education program are: right after work Infographic 2 Financial Literacy for Employees BOOKLET See Money DifferentlyTM Financial Literacy for Employees Companies top concerns regarding employees and their benefits: When do companies provide financial education? of companies feel the education provided is useful59% PRODUCTIVITY ENGAGEMENT MARKETPLACE COMPETITIVENESS SALARIES ORGANIZATIONAL COMMITMENT TURNOVER BENEFITS DRUG BENEFIT COSTS MENTAL WELLNESS ABSENTEEISM PRESENTEEISM HARASSMENT WORKPLACE VIOLENCE during work hours on employees time lunch breaks weekends right after work 69% 50% of COMPANIES say they offer financial education of EMPLOYEES say their company offers financial education vs Who provides the financial education? 57% company HR 38% independent 3rd party provider 28% benefit provider 27% employee assistance provider 72%of companies believe employee financial education will benefit them 42% online self-study one-on-one coaching 39% live webinar 59% live seminar How companies are providing financial education: 32% Companies want education from a third-party educator to be: 82% 88%Unbiased 87%Experienced Accredited Money DifferentlyTM See and build a better nancial future Workplace Financial Education The benefits and rewards of a financially literate workforce Part 2 WHITE PAPER Financial Literacy for Employees Understanding what makes an effective financial well-being program Part 1 WHITE PAPER Increase Profitability Through Financial Literacy Restore productivity and regain organizational commitment through employee financial well-being WHITE PAPER Employee Financial Well-Being to successfully implementing an employee financial well-being program Part 3 GUIDE STEPS 10 11