Even as the economy makes a slow turnaround, many organizations still can't afford to reinstate 401(k) matching contributions.

However, employers can get inspired by a new portal developed by EMC and Fidelity Investments Consulting Services that educates employees about how to sustain and grow their personal finances. Such offerings can provide lower-cost retirement benefits while increasing workers' financial fitness - which may further power economic recovery.

The portal offers EMC employees a peek into their retirement future, functioning much like a time machine by altering various factors - like the amount they contribute to a 401(k) account or health savings account - to predict potential retirement savings while minimizing taxes and maximizing company subsidy.

"The leverage of retirement income was far greater and was far more powerful if people optimized what was available to them, rather than if EMC put a little more money into the plan," says Adam Stavisky, senior vice president, consulting services at Fidelity Investments Consulting Services. Therefore, in six months, EMC and Fidelity Investments Consulting Services "built [the platform] to be a highly personal, highly prescriptive tool." They launched the tool in August 2008.

On the secure Web site, employees can reallocate their current compensation to show how much they could save for retirement by tinkering with their percentage and time span of savings, or how much money they contribute to the employee stock purchase plan or EMC's other elective benefits, such as a 401(k) or flexible spending account.

While a user manipulates the axes on the modeling module, a bar graph that projects annual retirement income grows and shrinks accordingly in stark contrast to the juxtaposed bar graph of what the worker is projected to earn in retirement based on current elections and contributions.

"[The modeling tool] has been customized for EMC, and it takes wealth accumulation and preservation to another level," says Stavisky.

'A little push'

The platform goes beyond modeling retirement; it also places a strong emphasis on education. After completing a wealth assessment, the tool automatically grades the user as "on track" or "at risk," while offering up suggested actions and a reading list that employees can reference in regards to their specific questions and situation. For example, if an employee has recently gone through a divorce, there is a tool designed to educate that worker on how to cope financially with this life-changing event.

Another tool within the site is the optimizer, which shows how much an individual has invested in the employee stock purchase plan, the 401(k) plan, whether they've put money into an HSA and how much, the deferred compensation retirement plan, and any other non-tax-advantaged savings.

The tool then calculates how much more money could be acquired from EMC and how much could be saved on taxes if the employee took full advantage of EMC offerings. WealthLink has embedded a total rewards statement in the Web site as well.

"If employees feel financially secure and feel that they have control over their health, you're going to have better-performing employees than if you have employees who don't know where they are going with their financial well-being. Also, we get a better appreciation for our benefits because it opens their eyes to what we are providing," says Ed Golitko, human resources director at EMC.

Appreciation isn't the only end result of the portal. The company now boasts increased participation in their programs, which breeds employee motivation and enhances employee productivity.

The 2,100 employees who use the tool on a regular basis increased participation in an FSA by 3% one year later, whereas nonusers of the tool decreased FSA participation by 17%. Regarding the employee stock purchase plan, nonusers lowered participation by 20%, as opposed to users, who only decreased the plan by 5%.

Nonusers' participation in HSAs remained flat, as opposed to users, who increased participation by 40%. The 401(k) plan's user rate dropped by 7% by non-users, whereas its participation rates remained flat for those who took advantage of the portal.

Promising feedback accompanied the dramatic results - as one participant explained, the tool's draw is "all-encompassing; it helps you look at where you are now and pushes you in the right direction," says Chris O'Brien, a software quality engineer at EMC. "I think it's [especially] helpful for people who may need a little push in thinking about their retirement."

He points out that it "has explanations on not only what benefits are available through work, but advice about when is the best time to purchase a car or a house. It also has basic investment advice," he says. "I like having everything all encompassing on one Web site - it means I don't have to dig around and go on external Web sites for information."

All in all, O'Brien was able to save over $1 million for retirement and is on track for retiring at age 59.

"Before using this site I thought I was pretty savvy with my finances and preparing for retirement. This helped me fine-tune and reassure me that I was in fact on track," he says.

Golitko seconds this observation: "From my own experience, using a tool like this gave me a certain comfort level knowing that I was on the right path," he says. "If you're not going to provide pension plans, you better provide the information for employees to figure it out themselves. Otherwise you're not doing your fiduciary responsibility."

With positive feedback and results, it's easy to see why other companies are considering jumping on the WealthLink bandwagon. The tool has modules, which can be teased out or reworked to fit any company niche, explains Stavisky.

"I think this is germane to other companies now because so few employers are putting more money into their benefits program," he says. "It's about making [benefits] work better and helping employees get more out of them, and that's why this approach is catching on with more companies."

He adds that employers can "get greater appreciation if people understand and optimize their benefits. Additionally, there's been a shift over the last decade to transfer risk from the employer to the employee as we move from a pension environment to a defined contribution environment. For benefit plans to support [the employer's] workforce objectives, they need people to use the plan and elect the plans as they were designed," he concludes. "People need better education and personal guidance to make those decisions."

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