THE NEW MATH OF On the Mend: Large Employers RETIREMENT Address “COVID Fatigue”

When it comes to the COVID-19 outbreak, more and more Americans are starting to feel under the weather

But it’s not just from the virus itself.

Americans are also experiencing frequent aches and pains from an emerging condition called “COVID fatigue.” Warning signs include angst, anxiety and anger as many tire of quarantining at home and adhering to safety protocols while also fearing infection.1,2

Overall, 53% of adults report that the pandemic is hurting their mental state. Another 73% feel blue because they believe the outbreak will worsen this year.³ According to one medical expert, “The slow-moving game of viral roulette is wearing on everyone.”⁴

Meanwhile, financial headaches are mounting. Researchers have found that higher-income households are just as concerned about the economic impact of the crisis as they are about health. And two- thirds (67%) of lower-income earners worry about the fiscal fallout while only a third (37%) worry about getting sick.⁵

So, what’s the cure for COVID fatigue? For many plan sponsors in the large, mega and nonprofit space, a heavy dose of communication may be exactly what the doctor ordered for helping employees stay strong, productive and connected during a period of so much distress.

As the second-largest retirement services provider in the U.S.,⁶ Empower Retirement serves more than 67,000 organizations and over 12 million participants.⁷ Recently, our team met virtually with valued partners to better understand how they’re cultivating a positive environment in this uncertain landscape. We learned that caring for workers suffering from COVID fatigue requires a balance of collaboration and compassion.⁸

1 UC Davis Health, “’COVID fatigue is hitting hard. Fighting it is hard, too, says UC Davis Health psychologist,” July 7, 2020. 2 Johns Hopkins Medicine, “How to Deal with Coronavirus Burnout and Pandemic Fatigue,” August 2020. 3 Brady Dennis, Jeremy Duda and Joel Achenbach, The Washington Post, “With no end to the pandemic in sight, coronavirus fatigue grips America,” August 2020. 4 Cleveland Clinic, “Are You Experiencing Coronavirus Quarantine Fatigue?” May 2020. 5 The Harris Poll, “Six Months That Changed America,” August 2020. 6 Pension & Investments 2020 Defined Contribution Survey Ranking as of April 2020. 7 As of January 4, 2021. 8 empower-retirement.com/about, August 2020.

1 THE NEW MATH OF Showing strength RETIREMENT

What is COVID fatigue? Meanwhile, Mid-America Apartment Communities (MAA), which is based in Germantown, Tennessee, took a proactive According to Empower research, COVID fatigue involves a approach after closing its leasing offices to the public and range of issues. Workers have adapted to a business model allowing corporate associates to work from home for a period that’s far from routine. Adjustments include working from of time. It offered workers up to 80 hours of “COVID time off” home, using video software for meetings and foregoing in- for COVID-related illness or quarantine in the household. person interaction with colleagues. Those required to work on-site must pass wellness checkups at entry, wear a face In addition, it provided hourly on-site workers with up to 40 covering during their shift and maintain distance from their hours of flex time off to use in April in the interests of work-life coworkers.⁹ In addition, working parents are struggling to balance and while the leasing offices were closed to the public. juggle remote and hybrid school schedules while also Those who were unable to use all or part of the hours in April meeting their professional responsibilities. received the value of those hours as a bonus in May.

Of course, dealing with unexpected savings strain is also “We wanted to get creative,” said Tracy Wilkins, another significant contributor of COVID fatigue. director of employee benefits. “This policy

In early March, Healthcare Company (HC) implemented several helped raise spirits and boost morale.” measures to limit expenses and protect jobs. The organization paused annual merit increases and temporarily suspended employer matching for its retirement plan. HC isn’t alone: 11% of employers on the Empower platform are taking this step to conserve cash while preserving paychecks.¹⁰

These steps allowed HC to distribute annual bonuses to workers in the spring while avoiding major furloughs and layoffs. The organization aims to restore both the standard merit increase and employer matching on January 1, 2021.

“Everyone was OK with making some minor concessions if it meant they would still get paid each month,” said Susan Smith, vice president of total rewards at HC.

How do workers describe COVID fatigue?

• “Being emotionally drained”

• “Wearing a mask”

• “Staying inside”

• “Overcoming distractions at home”

• “Going with the flow”

9 Jeanne Sahadi, CNN Business, “90% of employers say working remotely hasn't hurt productivity,” August 2020. 10 “How COVID-19 is affecting larger employers’ retirement plans,” Empower Institute, June 2020.

2 THE NEW MATH OF Lending a hand RETIREMENT

On many fronts, today’s world has shaped an uncertain tomorrow. According to Empower research, 71% of larger employers are But there is one certainty that larger employers share: prioritizing effective employee communication during this crisis.¹¹ Every Monday, MAA sends out an internal COVID update email filled The more engagement, the more relief. with tips, reminders and guidelines for a safe and secure workplace.

“Isolation is taking a toll on all of us,” Smith The real estate enterprise has also launched a 24/7 hotline for said. “It’s the little things that can leave a workers to anonymously report those who violate procedures big impression.” such as not wearing a mask or not staying home when sick.

HC has embraced technology to facilitate connection while “The last thing we want to do is put our corporate and billing personnel work remotely and clinical people at risk of exposure,” Wilkins said. staff report to local hospitals. Teams host online coffee “Communicating our regulations is key.” gatherings, turn on webcams during meetings and use email for questions.

And instead of postponing its summer picnic, HC held it virtually. “We invited everyone to bring their computer to their favorite park or log on from outside,” Smith said. “People were able to relax and have some fun.”

Therapies employers are offering to relieve COVID fatigue

Weekly listening sessions Location-specific Virtual coffee on COVID-19 challenges HR representatives gatherings

Internal portal Access to Hotline to for key services EAP program report violations

11 “How COVID-19 is affecting larger employers’ retirement plans,” Empower Institute, June 2020.

3 THE NEW MATH OF Taking advantage of the CARES Act RETIREMENT

With every ailment, various complications can flare up as it spreads, progresses and develops. How are plan COVID fatigue is no different. sponsors relaying Along with social, health and career shifts due to the pandemic, Americans are CARES Act content? experiencing financial uncertainty and discomfort, with 82% restless about the long-term implications of a potential recession.¹² In this context, it’s unsurprising that most companies have adopted some or all of the retirement-related provisions of the Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act. That figure includes 77% of nonprofit agencies such as HC; 69% of larger organizations, including MAA; and 63% of mega corporations.¹³ Landing page on internal Empower has found that most people say they would only dip into their retirement company-wide website account as a last resort. Instead, they prioritize other cost-cutting measures, such as pausing upcoming travel.¹⁴

Meanwhile, plan sponsors have also been strategic about sharing CARES Act information. MAA relied on Empower to send an employee email outlining CARES Act provisions. But only 58 of its more than 2,750 retirement plan participants have taken action. Wilkins attributes that outcome to the fact that the company hasn’t imposed layoffs or reduced hours. Intranet portal for all content related to the pandemic HC houses CARES Act materials on its internal portal dedicated to coronavirus matters. Smith said the organization has seen “just a handful of distributions and low interest.” This outcome aligns with Empower data indicating that only 3.2% of participants have initiated CARES Act withdrawals due to COVID-19.¹⁵

All plan sponsor interviewees have encouraged employees to contact their Empower counselor for a professional consultation.

Email campaign created “We wanted to save them from themselves,” Smith said. “We and delivered by Empower didn’t want to bring full attention” to the opportunity to tap retirement savings for current income needs.

12 “Retirement as a Last Resort: How Americans cope with financial need,” Empower Institute, July 2020. 13 “How COVID-19 is affecting retirement plans,” Empower Institute, June 2020. 14 “Retirement as a Last Resort: How Americans cope with financial need,” Empower Institute, July 2020. 15 Empower Platform Intelligence, as of November 2020.

4 THE NEW MATH OF Teaming up RETIREMENT

Employers, of course, aren’t alone in their attempt to ease the In reaction to these worrisome employee trends, HC recommended financial irritation often associated with COVID fatigue. one-on-one appointments with a financial advisor and organized a group meeting. The conversation covered the repercussions of With Empower, it’s a joint effort. halting retirement contributions as well as the benefits of preparing According to Empower research, 42% of workers would prefer for the future, market volatility, financial wellness and savings. that their employer supply retirement saving, investing and “We had a record for attendance,” Smith said. planning guidance during periods of market unpredictability.¹⁶ “And the message was well-received.”

Such proactive practices may explain why 85% of savers are OF WORKERS WOULD PREFER staying the course with their investment mix.¹⁸ THAT THEIR EMPLOYER SUPPLY RETIREMENT SAVING, INVESTING MAA has its own successful formula. The company regularly % AND PLANNING GUIDANCE 42 sends email communications about their 401(k) plan and DURING PERIODS OF MARKET UNPREDICTABILITY.¹⁶ publishes intranet announcements when the information is more urgent. All communications are digital.

After HC suspended retirement plan matching, some participants Moreover, during the pandemic, MAA has partnered with stopped their savings pledge altogether or decreased their Empower on a webinar series to help employees with their contribution rate. “That was an unexpected consequence,” financial future. And it might be working — few participants Smith said. “We weren’t ready for that sort of response.” have taken any drastic actions related to their 401(k) accounts.

By contrast, only 3.2% of Empower participants have initiated “I don’t think there’s that much panic CARES Act distributions from their retirement accounts — anymore, which is a good thing,” Wilkins said. presumably in order to get more money in their pockets today.¹⁷

Empower resources to help fight COVID fatigue

• Educational materials on the CARES Act and market volatility

• Webinars on financial wellness

• Fiduciary advice via My Total Retirement™

• Advisor sessions on saving, investing and planning

• Participant support via the Empower Customer Care Center

• Online tools, resources and calculators

16 “State of the Pandemic,” Empower Retirement, April 2020. 17 “Retirement as a Last Resort: How Americans cope with financial need,” Empower Institute, July 2020. 18 “How COVID-19 is affecting retirement plans,” Empower Institute, June 2020.

5 THE NEW MATH OF Moving forward RETIREMENT

COVID fatigue may be with us for a while, but plan sponsors can help employees find relief through the following steps:

Keep in touch

Use technology for social interaction.

Build a diverse communication blueprint to address all audience members.

Identify people to contact with questions or concerns.

Partner with Empower to host webinars and/or one-on-one meetings.

Think creatively

Consider adding “COVID time off” to your benefits package.

Survey employees to understand how they’re faring.

Post information about your retirement plan, health and safety, and the CARES Act on an internal website.

Introduce a flexible work-from-home schedule option.

Want more support? Contact your Empower representative today.

Securities offered and/or distributed by GWFS Equities, Inc., Member FINRA/SIPC. GWFS is an affiliate of Empower Retirement, LLC; Great-West Funds, Inc.; and registered investment advisers, Advised Assets Group, LLC and Personal Capital. Investing involves risk, including possible loss of principal. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice. The Empower Institute is a research group within Empower Retirement, LLC. This material has been prepared for informational and educational purposes only and is not intended to provide investment, legal or tax advice. ©2021 Empower Retirement, LLC. All rights reserved. GEN-WCWB-WF-885680-0121 RO1453564-1220 THE NEW MATH OF At a glance RETIREMENT

For this research paper, Empower interviewed leaders from two organizations with different sets of circumstances.

Healthcare Company Mid-America Apartment Communities (MAA)

Interviewee: Susan Smith, vice president of total rewards Interviewee: Tracy Wilkins, director, employee benefits

Market: Healthcare/nonprofit Headquarters: Germantown, Tennessee

Work-from-home (WFH) status: Until further notice, Market: Large billing associates and corporate executives are working WFH status: In early May, after implementing many remotely. Medical professionals are reporting to hospitals, additional protocols to keep their employees safe, the facilities and centers. company re-opened its leasing office doors to the public. Special considerations: Despite the COVID-19 case In mid-May, the company used a phased approach surge, patient volume at many emergency rooms has to bring employees back to work in the corporate decreased. Some health workers were transferred to offices. For each day worked, all employees are asked assist at pandemic hot spots. to complete a daily health screening questionnaire, practice social distancing, wash/sanitize their hands COVID fatigue advice: “Encourage people to make that regularly, and wear a mask when around others or in one last phone call at the end of the day — just to check common areas of their workplace. in on someone or cheer them up.” Special considerations: Only 300 of 2,500+ employees work in the corporate offices. Most employees work at the apartment communities across 16 states.

COVID fatigue advice: “Remind your people that certain protocols are in place to protect them. We’ve tried to make this a positive experience.”

Please note that some interviewees asked to remain anonymous.

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