This article discusses the history of the Employee Retirement Income Security Act (ERISA). The implementation of the act developed an environment for employers, public and private, to transition from defined benefit (DB) retirement plans to defined contribution (DC) retirement plans. This transition has many implications for both employers and employees. The article argues that the transition to DC retirement plans is becoming more prevalent in the public sector and it suggests that the implementation of a workplace financial literacy program can enhance public employees' ability to make better decisions with regard to financial behavior and retirement planning. The article presents a nonexperimental single group pretest/posttest design to investigate the effects of a workplace financial literacy program. The findings suggest that participants are less stressed, more satisfied with their financial situation, less worried about monthly living expenses, and more confident about overcoming financial emergencies.
Bayer, P., Bernheim, B., & Scholz, J. (1996). The effects of financial education in the workplace: Evidence from a survey of employees (NBER Working Paper No. 5655, NSF, SBR94-09043 and SBR95-11321). Cambridge, MA: National Bureau of Economic Research.
2.
Bernheim, B., & Garrett, D. (1996). The determinants and consequences of financial education in the workplace: Evidence from a survey of households (NBER Working Paper No. 5667, NSF, SBR-94-09043). Cambridge, MA: National Bureau of Economic Research.
3.
Coolidge, C. (1999). Rollover rules. Forbes, 164(15), 198.
4.
Dickemper, J., & Yakoboski, P. (1997, November). Increased saving but little planning: Results of the 1997 Retirement Confidence Survey (Issue Brief No. 191). Washington, DC: Employee Benefit Research Institute.
5.
Fore, D. (2001). Going private in the public sector: The transition from defined benefit to defined contribution pension plans. In O. S. Mitchell & E. C. Hustead (Eds.), Pensions in the public sector (pp. 267-287). Philadelphia: University of Pennsylvania Press.
6.
Garman, T. (2005). Employer's return-on-investment model for workplace financial education and assistance programs. Retrieved March 25, 2008, from http://www.ethomasgarman.net
7.
Government Accounting Standards Board. (1994 ). Summaries/status: Summary of Statement No. 25 Retrieved July 1, 2008, from http://www.gasb.org/st/summary/gstsm25.html
8.
Grable, J. (2000). Financial risk tolerance and additional factors that affect risk taking in everyday money matters. Journal of Business and Psychology, 14(4), 625-630.
9.
Hira, T., & Loibl, C. (2005). Understanding the impact of employer-provided financial education and assistance program. Journal of Consumer Affairs, 39(1), 173-194.
10.
Holland, J., & Goodman, D. (2008). Transitioning to defined contribution retirement plans: The importance of financial literacy development in the workplace. In C. Reddick & J. Coggburn (Eds.), Handbook of employee benefits and administration (pp. 359-378). Boca Raton, FL: Taylor & Francis.
11.
Joo, S., & Garman, T. (1998). Workers want more than retirement education at their workplace: A report of research findings. Personal Finances and Worker Productivity, 2(2), 156-161.
12.
Kim, J., & Garman, T. (2004). Financial stress, pay satisfaction and workplace performance. Compensation and Benefits Review, 36, 69-76.
13.
Kraft, M., & Furlong, S. (2007). Public policy: Politics, analysis, and alternatives . Washington, DC: CQ Press.
14.
Lachnit, C. (2004). The 401(k) gamble. Workforce Management , 83(6), 10.
15.
Light, P. (1999). The new public service. Washington, DC: Brookings Institution Press.
16.
Loibl, C., & Hira, T. (2005). Self-directed financial learning and financial satisfaction. Financial Counseling and Planning, 16(1), 11-21.
17.
McCarthy, D., & Turner, J. (2000). Pension education: Does it work? Does it matter?Benefits Quarterly, 16(1), 64-72.
18.
Milne, D., VanDerhei, J., & Yakoboski, P. (1996). Participant education: Actions and outcomes (Issue Brief No. 169). Washington, DC : Employee Benefit Research Institute.
19.
Moore, D. (2003). Survey of financial literacy in Washington state: Knowledge, behavior, attitudes and experiences. Olympia : Washington State University.
20.
Muller, L. (2003). Investment choice in defined contributions plans: The effects of retirement education on asset allocation. Benefits Quarterly, 19(2), 76-94.
21.
On the march. (2005). The Economist, 374(8708), 34.
22.
O'Sullivan, E., Rassell, G., & Berner, M. (2002). Research methods for public administrators. San Francisco: Longman.
23.
Papke, L. (2002). Individual financial decisions in retirement saving plans: The role of participant-direction. Journal of Public Economics, 88, 36-61.
24.
Personal Finance Employee Education Foundation. ( 2008). PFW scale information. Retrieved April 13, 2008, from http://personalfinancefoundation.org/index.html
25.
Prawitz, A., Garman, T., Sorhaindo, B., O'Neil, B., Kim, J., & Drentea, P. (2006). InCharge financial distress/financial well-being scale: Development, administration, and score interpretation. Financial Counseling and Planning, 17(1), 34-50.
26.
Purcell, P. (2002, June). Employer stock in retirement plans: Investment risk and retirement security (Report No. RL31507). Washington, DC: Congressional Research Service.
27.
Quinn, J. (2000). Mainstreaming financial education as an employee benefit. Journal of Financial Planning, 13(5), 70-79.
28.
Samwick, A.A., & Skinner, J. (1996, May). Abandoning the nest egg? 401(k) plans and inadequate pension saving (Working Paper No. 5568). Cambridge, MA: National Bureau of Economic Research.
29.
State of Alaska. (2007). Alaska retirement and benefits. Retrieved March 25, 2007, from http://www.state.ak.us/drb/employer/hr_dcrplaninformation.shtml
30.
Stone, D. (2002). Policy paradox: The art of political decision making. New York: Norton.
31.
U.S. Department of Labor. (2006). Retirement plans, benefits and savings. Retrieved February 18, 2008, from www.dol.gov/dol/topic/retirement/typesofplans.htm and http://www.dol.gov/dol/topic/retirement/erisa.htm
32.
U.S. Department of Labor. (2007). Report of working group studying the trend in the defined benefit market to hybrid plans. Retrieved March 25, 2008, from https://www.dol.gov/ebsa/publications/cbalinfo.htm
33.
U.S. Department of Labor Bureau of Labor Statistics. (2008). National compensation survey: Employee benefits in state and local governments in the United States, September 2007. Retrieved April 1, 2008, from http://www.bls.gov/ncs/ebs/sp/ebsm0007.pdf
34.
U.S. Department of Labor Employee Benefits Security Administration. (2006). Reporting and disclosure guide for employee benefit plans. Retrieved March 29, 2008, from http://www.dol.gov/ebsa/pdf/rdguide.pdf
35.
Wooten, J. (2005). Employees Retirement Income Security Act of 1974: A political history. Berkeley: University of California Press.
