Building Financial Wellness at American Express with Smart Saving

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1 Building Financial Wellness at American Express with Smart Saving Barbara Kontje Director, Retirement Americas & Smart Saving April 11, 2012 AMERICAN EXPRESS COMPANY PROFILE American Express is a global service company, providing customers with access to products, insights and experiences that enrich lives and build business success: Fortune 100 Company $30 billion in annual Revenue (2011) Global payments company; celebrating 162 nd year in business Headquarters in New York City; more than 62,000 employees around the world American Express has one of the world s strongest brands: Currently ranked 16th in FORTUNE S America s Most Admired Companies Ranked #1 by J.D. Power and Associates in customer satisfaction among credit card issuers for the 5 th consecutive year Consistently ranked as top employer in recognition of workplace programs One of the 2011 World s Most Ethical Companies American Express is one of the world s leading issuers of general purpose credit and charge cards Over $822 billion in billed business (2011) Businesses include charge, credit card and payment products for consumers, small businesses and corporations, network services, corporate/consumer travel, and merchant services 2 1

2 SMART SAVING LOGO & TENETS Brand for financial wellness, companion to Healthy Living, our brand for physical wellness 3 BACKGROUND AND GOALS Issues Declining RSP*/401(k) participation from mid-80% to 70% in Q Goal to Increase Awareness and Usage of Financial Benefits Employee Engagement Smart Saving Fairs Seminars and Process webinarsstep Process Step Launch Smart Saving on The Square Q&A Tables on-site 1:1 financial & retirement planning meetings Feedback from our employees and vendors highlights an unfulfilled need Employee Appreciation Easy access to resources Address employee irritants Promote existing programs Utilization of services below expectation Promote Usage 10% increase in RSP participation Increase utilization (e.g., financial planning and legal service plan) Integrate Healthy Living/Smart Saving/Work Life messaging * RSP is the Retirement Savings Plan, the Company 401(k) plan 4 2

3 A COMPREHENSIVE APPROACH TO FINANCES Goal: To renew and sustain the commitment to help employees make good decisions about their finances, including: Short-range budgeting and debt management Retirement saving and planning Long-term financial planning for major events (e.g., higher education, home purchase) Estate planning, income and survivor protection, and other insurance Financial education and support programs Saving money day-over-day Current benefits and programs include: Ayco AnswerLine financial counselors LifeWorks and EAP Retirement Savings Plan, Retirement Plan, Retirement Restoration Plan, and Deferred Compensation Retiree Medical, and Health Savings Account Wells Fargo, Ayco resources Ayco AnswerLine service College Coach Hyatt Legal and Ayco AnswerLine service Life and Disability Insurance Auto/Home Insurance Ayco and Wells Fargo education sessions Ayco AnswerLine financial counselors Tax advantaged plans (HSA, FSA, commuter benefits) Employee Deals & Discounts, Auto/Home Insurance 5 OFF TO A GREAT START Process Step Process Step Q Q Launch 4,934 visits to new Smart Saving page 2,517 employees took Smart Saving Check-In 38% increase in calls to financial planning service Campaign 0% savers: 334 enrolled (7% of audience) 1% 4% savers: 428 increased RSP (8.5% of audience) 4,225 hits to 5 plus 5 page on The Square Targeted 0% savers: 245 enrolled (9.5% of audience) 1% 4% savers: 388 increased RSP deferral rate (12.5% of audience) Events 18 events in Phoenix, Salt Lake City, Greensboro, Fort Lauderdale/Miami, Atlanta, Jacksonville, St. Petersburg and NY reached close to 8,400 employees 2,000+ signed up for 1:1 financial planning session 400 enrolled in RSP or increased contributions Many more participated in follow-up education sessions Onsite visits for Q&A and 1:1 Ayco sessions Add Power Campaign Encouraged employees to take the 1% challenge and direct 1% more of pay to the RSP or personal savings. 1,032 have increased RSP deferral rate. Innovation! Smart Saving for Kids Hong Kong Mexico U.S. Enhancements Special Enrollment for life insurance, LTD & legal assistance plan Roth 401(k) effective October 2011 Reduce wait for Company Matching Contributions effective January 2012 Self-Directed Brokerage Account provider change-october 2011 External Recognitions MetLife/ Boston College Financial Wellness Case Study Center for WorkLife Policy-X Factor-Gen X research paper Corporate Leadership Council Case Study Vanguard White Paper-Tiered strategy Workplace Leadership in Financial Education Award Two-time IABC Gold Quill winner 6 3

4 FRAMEWORK FOR SMART SAVING FAIRS Welcome Roadmap and other materials Q&As #1: Retirement Wells Fargo, Ayco Learn: About the RSP, enroll, increase savings, how to change a beneficiary, how to better budget for retirement, answers to common Qs Do: Enroll in the RSP, sign up for one-on-one Ayco AnswerLine sessions and upcoming education sessions #3: Protection & Planning Hyatt Legal, Marsh, MetLife, Health Equity Learn: Basic estate planning, will preparation, about auto & umbrella insurance Do: Talk to representatives, take materials, get auto quote Snack Games Giveaways at every table! #2: Day-to-Day Expenses Ayco, Smart Saving Rep Learn: How to manage debt, budget, etc., about available deals and discounts Do: Sign up for one-on-one Ayco AnswerLine sessions #4: Family & Kids College Coach, LifeWorks, Bright Horizons Learn: How to prep for college, enhance study skills, financial prep for baby, backup child and elder care and more Do: Talk to representatives, take materials Exit Grand Prize Raffle Feedback Flip Cams 7 RESULTS Retirement: Overall 401(k) participation increased 7% Plan participation increased from 70% in Q to 77% in Q Those deferring 5% or more increased from 72% to 80% for the same period Locations that hosted Smart Saving Fairs increased participation from1% to 17% for the same period Average deferral rate is 7.3%, up from 7.2% in 2010 Day-to-Day Expenses Calls to the financial planning service increased by 12% from Q to Q Deals and Discounts (increased utilization of entertainment, cell phone and other discount programs) Protection & Planning Special Enrollment for Supplemental Life insurance, LTD and legal assistance plan 1,260 employees elected supplemental life insurance coverage 560 employees signed up for the Will Preparation Service (provided at no additional cost to those enrolled in Supplemental Life) 350 employees signed up for the legal assistance plan Family & Kids 5,800 employees utilized back-up child care program 1,500 employees enrolled in a secondary education resource program (education counseling for employee or employees children) 275 employees utilized back-up elder care program Note: results include Smart Saving Fair promotion as well as individual program promotions Locations that hosted Smart Saving Fairs showed larger increases in program utilization 8 4

5 GROWTH PLAN FOR U.S Considerations for Smart Saving page on The Square Wells Fargo website enhancements Retirement modeler rebranded Quarterly newsletter (Q2) Retirement program quarterly statements update Retirement modeler update Smart Saving 2.0 on The Square Total Compensation Statement online New hire orientation update Deferral Plan introduced to broader employee population RSP investment enhancements: passive line-up New Roth 401(k) (Q4) Banking and brokerage offerings (2012) Linkage to credit unions or American Express Personal Savings program (2012) Auto enrollment for new hires Reduction of 1-year wait for RSP Matching Contributions Introduce 529 plans Virtual Fairs Will Preparation service to employees with supplemental life coverage (at no additional cost) SMBA update (Q4) Will Prep service enhanced to include Power of Attorney and Living Will for employees with Supplemental Life insurance Special Enrollment for Supplemental Life, LTD and legal assistance plan Opportunity to leverage globally 401(k) distribution options Group annuity products Onsite resources 2055 Fund Retirement Funds enhancements 9 SMART SAVING GLOBAL OVERVIEW Market Hong Kong Mexico US Launch time July 2011 Oct 2011 August 2010 Brand Building upon the Smart Saving brand in the US, launches in Hong Kong and introducing Smart Saving in Mexico 2012 expansion to the UK and Canada and potential other markets Widening the Benefits brands target audience Overall aim Help employees understand money concepts Develop good money management habits Identify and provide tools and resources for employees Communications Smart Saving marketing promotions Presence on The Square (company intranet) Metrics Program participation rate Program participation rate Attendance at launch events 401(k) Plan participation Utilization rates of other programs Participant survey results Hits to The Square Targeted communication metrics Program developed in U.S. and expanded and adapted to local markets 10 5

6 SMART SAVING KIDS GLOBAL OVERVIEW Market Hong Kong Mexico US Launch time Aug / Sep 2011 Oct 2011 Nov 2011 Brand Building upon the Smart Saving brand in the US and Hong Kong and introducing Smart Saving in Mexico Widening the Benefits brands target audience Overall aim Help kids understand money concepts Develop good money management habits Facilitate dialogues and co-learning on money management between kids and parents Communications Smart Saving Toolkits Smart Saving Kids Guidebook Presence on The Square Age group 6 to 14 6 to 12 7 to 18 Metrics Program participation rate % of participants completing the 4- month money management development program % improvement on money management (if available) Program participation rate Savings amount after 3 months Program participation rate Participant survey results Hits to The Square Follow up responses/results Number of toolkits distributed Program developed globally and delivered locally 11 INTEGRATED BENEFITS STRATEGY Blog Events Newsletter Intranet 12 6