Financial Literacy in Labor Unions
It was in the late 1990s when Cygnet Institute launched the first of its kind Financial Wellness initiative as a part of a 401k education campaign at UFCW Local 876. The idea eventually took hold, and the Retirement Service Center was created to provide unbiased financial education to all union members. In the succeeding months, this program was expanded to several UAW locals as well as Teamsters locals.
Unlike the typical insurance or investment salespeople who market to union members what their companies describe as “grey collar” products, Cygnet Institute’s focus was to educate members as to what to do not what to buy.
The reason the program was very positively received by the leadership of the unions was because it complemented their bargaining agreement. The program provided union members with personal financial information and advice that went beyond the scope of the union contract. Cygnet was helping people with advice on financial topics that could not be provided by the stewards, committee people, or business agents. The major key in all of this is that Cygnet had put in writing its commitment to operate under the Fiduciary Standard of Care in all its dealings with the members of the union.
Over the past 25 years, surveys have shown that financial wellness is a key to reducing financial stress. If people are not making good financial decisions, financial stress is the typical outcome. This financial stress can damage people’s lives. Learn more about this topic in an excellent report from the International Foundation titled “Financial Wellness and Education in the Workplace: Strategies and Best Practices”.