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Weyerhaeuser's Financial Education

Promoting financial literacy among its employees pays off at the timber company in employee loyalty and productivity

More than a century ago, Weyerhaeuser (WY) began operations in America's Northwest as a logging company. Like many other frontier businesses, the job was hazardous. When a logger got hurt, the company took care of his family. (Most loggers were men.)

Flash forward to 2009. Cradle-to-grave benefits are no longer the norm in Corporate America. With the economy in tatters, workers these days feel lucky if they can get a free cup of coffee at the office. Company-sponsored health insurance and contribution-matching retirement plans are on the brink of extinction.

A Leader in Financial Literacy

And yet, despite the downturn, Weyerhaeuser is making sure that its workers maintain an educational safety net. It is recognized as one of America's leaders in providing financial education to nearly 14,000 employees.

Financial literacy is ingrained—pun intended—at the Federal Way (Wash.) timber company. "It's the best program I've seen that's sponsored by a company," says Steve Vernon, who is president of Rest-of-Life Communications, a retirement advisory firm and a former consultant at benefits giant Watson Wyatt (WW).

Weyerhaeuser's financial literacy efforts date back to the 1980s but took a leap forward when Sally Hass, a senior technology planning manager in the human resources department, noticed that corporate pension and 401(k) plan participants had poor savings habits in the 1990s. "When our stock price went up, they bought stock," Hass says. "They often would leave for other employers just prior to being eligible for a retirement benefit." Hass asked her manager if she could offer a retirement training program. Her planning seminars quickly caught on with employees, and soon the company established a benefits education department, led by Hass. This year, Weyerhaeuser will offer more than 40 retirement, benefits, and wellness programs to its workers.

Intensive Life-Planning Seminars

One-third of large American companies offer some kind of financial education to employees. Robert L. Clark, a professor of economics and management at North Carolina State University who studies corporate retirement and financial education programs, says Weyerhaeuser's employees rank at the top of major companies for their financial knowledge. He attributes much of the company's success to an extensive two-and-a-half-day life-planning seminar that's offered to all employees. Supplemental seminars are also offered throughout the year.

In 2008, Clark polled Weyerhaeuser employees who attended five seminars. His findings? All of the participants said that they were better informed about their retirement programs, 99% thought that they could now make better retirement choices, and 88% said they would change some of their retirement choices. "Participants thought the seminar was a valuable employee benefit, that it enhanced their positive feelings about Weyerhaeuser, and that it raised their awareness of the benefits that Weyerhaeuser provides," according to Clark's study.

Moreover, employees actually learned something. Survey responses show that many of them lacked basic knowledge about Social Security and Medicare prior to attending the retirement seminar. Clark's research shows they learned how these programs work as well the value of their own pension benefits. Seminar veterans also upped the age they planned to retire from 60 to 62.

The end result of all this planning is that "folks feel a lot better about Weyerhaeuser," Vernon says. "It helps Weyerhaeuser retain them and keep them productive."

What makes Weyerhaeuser's financial literacy programs so special?

Extensive, Frequent Training

Key to Weyerhaeuser's educational efforts is the exhaustive two-and-a-half day pre-retirement life-planning seminar known as "Healthy, Wealthy & Wise" that spans the gamut from understanding retirement benefits to estate planning to spending quality time in retirement with a spouse or partner. A gerontologist kicks off the seminar with a discussion about transitioning to retirement. Employees also spend a 45-minute session focused on the planning tools offered by Vanguard Group, which manages the company's 401(k) plan. (Investment options are a mix of index mutual funds and target-date funds, as well as the actively managed Vanguard Wellesley Income Fund.)

This year, Weyerhaeuser will offer its pre-retirement seminar, which is geared to workers who are older than 50, eight times. Employees are strongly encouraged by senior management to participate in the program. As long as workers get approval from their managers, they can attend the workshop during work hours. "That's real generous," Vernon says. "The gold standard is to do it on company time so that people don't feel like they are missing out on their weekends."

Weyerhaeuser also presents five shorter half-day and full-day seminars throughout the year called "Investing in Your Future," targeted at employees who are younger than 50. These programs look at a wide range of corporate benefits and financial planning topics. In addition, monthly Webinars are available to employees on subjects such as pensions, wellness programs, long-term care, and retiree health insurance. Other big companies typically offer half- or all-day seminars, if they offer anything at all.

Family Members Get Involved

What also makes Weyerhaeuser's programs unique—as well as successful—is that employees are encouraged to include spouses, partners, and family members in the planning process. The company's shorter programs and Webinars often take place during lunch, so that family members can attend or dial in. During a "Healthy, Wealthy & Wise" seminar this spring, one-third of the participants were spouse partners, says Andy Landis, who now heads benefits education at Weyerhaeuser. (Hass retired last year.)

Steve Trimble, a Weyerhaeuser information technology manager, brought his wife, Cheryl, along to the "Healthy, Wealthy & Wise" seminar when he was 53. While Trimble says he had a grasp of financial needs prior to the program, he did not spent much time prior to the session considering the nitty-gritty details of life in retirement with Cheryl.

"The program covers a lot of the aspects of retirement people don't tend to think about, such as what are you going to do with your time? What are you going to do with your spouse?" Trimble says. "The idea that you get along fine on weekends doesn't mean when you are nose-to-nose seven days a week you'll get along."

Trimble, who retired from Weyerhaeuser three years ago, says the time he spent thinking about his relationship with his wife before he left his job has made his retirement a success. Retirement education, he says, "is one of the things that causes the company to stand out from the crowd."

Gloria and Roger Hunt, both 64, had a similar eureka moment when they attended a life-planning seminar after they were married in 2002. During a retirement planning exercise, Gloria told Roger she wanted to watch sunsets from the back of a boat, and he mentioned that he envisioned spending his time in the San Juan Islands. They tested the waters and tried boating that summer.

The program also helped them set a retirement timetable. "The seminar taught us to think about spacing out retirements so they didn't ricochet at the same time," she says. Gloria ended up leaving the company six months before Roger in 2004. The couple now spend about 20% of their time on their boat.

Getting significant others involved the retirement planning process is a smart move, experts say. "To have a good life after you retire, you might have to make some changes," Rest-of-Life's Vernon notes. "The best way to make changes is to have people who care about you on board and on the same page."

Peer Education

Weyerhaeuser's educational efforts are homegrown, which means employees handle much of the teaching and discussion of retirement and health benefits as opposed to outside consultants. Weyerhaeuser employees and retirees run nearly all of the planning sessions. (Consultants are used for select topics, such as legal issues.)

Participants usually say that their favorite part of the "Healthy, Wealthy & Wise" program is the retiree panel, featuring four to six Weyerhaeuser retirees and their spouses. It's an open forum, and retirees field questions on everything from who handles their investment portfolio to working in retirement. These veterans offer an unfiltered look at works and what doesn't work in retirement, notes Trimble, who now participates in these panels as a speaker. Roger Hunt, another panel participant, warns would-be retirees to consider unexpected eldercare responsibilities, noting that he and his wife initially spent about 20% of retirement time caregiving for older family members.

Weyerhaeuser's educational efforts have paid off. Employees at the company are less likely to load up on company stock, which makes their portfolios more diversified and less risky. The typical employee retirement account allocates less than 14% to company stock. By contrast, asset allocation to company stock was 22% at companies with more than 5,000 employees in 2007, according to the Employee Benefits Research Institute. The number of Weyerhaeuser employees who have an all-company stock portfolio is only 3%, Landis says. (It's about 12% at the average U.S. company.)

That doesn't mean that Weyerhaeuser is immune to the recession. The company's profile has changed dramatically since last year, when Weyerhaeuser sold its cardboard box division to International Paper (IP) in August and cut its U.S. head count from 31,000 to less than 14,000.

Out of economic necessity, Weyerhaeuser suspended its retirement match in May. The company had previously offered a match of nearly 5% of a worker's salary. Workers, however, aren't fleeing from their retirement accounts—few have taken hardship loans. In fact, participation in the plan rose from almost 62% in April to 68% in May. "After the match was suspended, more employees signed up for 401(k) participation. Wow!" Landis says triumphantly.

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