Going the Extra Mile for Employees

Are there manageable ways for a cooperative to do more to support the financial health of its team?

The Challenge

Lake Region Electric Cooperative (LREC) is an important employer within its community and, like many employers, is concerned about recent research showing a dramatic rise in economic insecurity.

The financial fragility of many American workers is a top concern, as highlighted by data from the Federal Reserve. With nearly half of Americans lacking sufficient savings to cover even three months of expenses, and over a third unable to handle a $400 emergency, employers have an opportunity to help improve their employees’ financial wellbeing with an employer-sponsored savings program.

The Partnership

It turns out that LREC is not alone with this question. Employers recognize that employees who have trouble covering their day-to-day expenses are less likely to contribute to their 401(k)s. According to the Wall Street Journal, employers are increasingly taking steps to add emergency savings accounts, often matching contributions, as a way to attract and retain talent. But how could LREC set up a plan and make it work?

Homestead Advisers offers financial guidance and an understanding of cooperative financial structures. Homestead Advisers also provides educational resources and onsite employee meetings that allow for one-on-one engagement to assist employees with their savings questions.

By tapping into that experience, LREC came up with a framework to encourage employee savings. Homestead Advisers worked closely with LREC’s CEO and HR personnel to clearly understand their goals and budget as well as the needs of their employees. Together, Homestead Advisers and LREC developed a savings campaign for LREC’s employees.

The Solution

Working with Homestead Advisers, LREC offered employees investment choices that went beyond bank savings accounts and CDs.

• Homestead Funds’ family of mutual funds offered a way for employees to invest in line with their goals, balancing objectives for safety of principal and growth.
• Assets are held in Homestead Funds accounts owned by the employees, so they can continue to fund or access their money whenever the need arises.

The Results

The program was an immediate hit, with more than two-thirds of employees signing up in the first three months.