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Q&A with an Expert: How Are Goal Accounts Built for Employees?

Q&A with an Expert: How Are Goal Accounts Built for Employees?
Posted on Tuesday, February 18, 2020 by Rae Shanahan

When Businessolver debuted Goal Accounts last month, we were thrilled to offer a new benefits solutions to employers and employees.

buying-a-new-home-with-goal-accountsIn a benefits market that’s increasingly complex, Goal Accounts aim to offer a simple, flexible solution for a something millions of Americans struggle with: saving money. As employees begin to see Goal Accounts in their benefits packages, we’re taking a closer look.

Instrumental in the development of the Goal Accounts platform was Jim Lynch, who serves as a consultant and advisory board member at Businessolver. Jim has been a leader in the Consumer-Directed Healthcare industry since 1986 and most recently served as Chief Sales Officer and member of Executive Leadership Team at WageWorks, where he served numerous Fortune 1,000 companies and large public sector clients.

We spoke to Jim to understand the architecture behind Goal Accounts and how they’re set to transform employees’ saving experience.

What is the ultimate objective of Goal Accounts, both from an employer and employee perspective?

For employers and employees alike, Goal Accounts are a financial well-being strategy. For employees, it’s a way to become more financially stable since these accounts enable them to save for major expenses and purchases via the payroll system. Goal Accounts help support employee savings in both the near-term and the future.

For employers, Goal Accounts are a way to expand their benefits programs without a lot of costs attached. In our current environment of low unemployment, employees might be more likely to consider making career changes, but Goal Accounts create an attractive reason to stay with your employer. With Goal Accounts, employees might ask themselves, “what kind of savings benefits will I be giving up if I leave my current job?”

What space in the benefits market are Goal Accounts aiming to fill?

Human resources departments are spending a majority of their costs and time managing the components of health insurance, but they’re also aware of the need to offer flexible benefits for things like student loan assistance or helping younger employee populations with first home purchases. Goal Accounts help relieve that burden. There is some discussion of the need for this kind of option on the benefits market, but Goal Accounts are one of the first solutions of this kind designed to help people become more disciplined in their savings habits.

How are Goal Accounts different from other financial wellness programs and tools?

The primary difference is the flexibility. As your goals change, you can change the amount you put toward your Goal Account. As an example, if I had been saving for my child’s college tuition, and then he receives a scholarship after I’ve started saving, I could re-allocate those finds toward my HSA to build up that account. Other solutions on the market right now don’t offer the flexibility to make changes so easily and from a centralized place.

How do Goal Accounts aim to impact the employee experience on a daily level, with regards to productivity and stress?

The convenience of Goal Accounts being linked to payroll deductions is a big benefit, since financial stress may keep folks from creating outside savings accounts on their own. We see that many people are good at adapting to slightly less take-home pay if they know those dollars are going toward things that matter to them. Being confident that you have dollars on hand when you know a mortgage payment is due takes a lot of stress off people. Plus, you’re not locked into anything. Very few people make adjustments to their 401(k) contributions during the year, but with a Goal Account, there’s more flexibility to do so—that helps employees feel much better on a daily basis.

Do employees need to have a major purchase in mind to make the most of Goal Accounts?

No, employees don’t need to have a big purchase in mind, but Goal Accounts are very helpful for that situation. In today’s world, it’s easy to move money around between checking and savings accounts, like you might do for something smaller like a vacation. But when it comes to major purchases like homes or college tuition, we see a lot of people taking money from their 401(k) accounts, because they figure it’s like loaning money to themselves. Using Goal Accounts instead is a tremendous advantage in these cases because employees don’t lose earnings over time, as you do when you lower your 401(k) balance. Employers can communicate the risk of lost earnings over time when relying on a 401(k) disbursement and offer Goal Accounts as an alternative.

How do you recommend that employees communicate the introduction of Goal Accounts to employees?

For employers who are already Businessolver clients, introducing Goal Accounts is just like offering a new benefit. A very succinct and separate campaign to explain the new addition makes sense. If you’re newly introducing the MyChoice™ suite, I recommend making Goal Accounts part of a larger conversation about savings vehicles. A good communications focus is logistics, such as explaining that the funds are associated with a separate debit card so employees understand how they can access their money. 

Explore Businessolver’s new Goal Accounts offering, part of the MyChoice Accounts suite.