PLANADVISER - November/December 2019 - 19
cover story
FUND
The value of
facilitating
emergency
savings
accounts at
the workplace
Art by Victo Ngai
A LACK OF EMERGENCY SAVINGS is a major financial worry-second only to
inadequate retirement savings, according to the 2019 John Hancock Financial
Stress Survey: 25% of study participants had no emergency savings at all.
Employers often can sense the financial stress in less productive employees
and see it in increased 401(k) plan loans, says Brian Nelson Ford, a financial
well-being executive at SunTrust Banks Inc. in Atlanta.
Employers increasingly understand why it makes sense for them to play a
role in their workers saving for emergencies, Ford says. But with little federal
regulatory guidance and no clear best practices emerging in these early days
of employer involvement, employers have a wide set of options to consider.
" It's a little bit like the Wild West now, " he says. Everyone has good intentions,
but there is much variety in the approaches being utilized, he says.
Emergency savings has become a regular conversation topic at many plan
committee meetings, says Harry Dalessio, head of institutional retirement
plan services with Prudential Retirement in Hartford, Connecticut. For plan
advisers, he says, it is worth starting now to take on the role of emergencysavings
advocate and consultant: They can help an employer decide on its
emergency-savings philosophy and pick the program that best suits its goals;
work on the design and implementation of a program; help a sponsor decide
which investments to utilize for the program; and educate participants about
why they should save for emergencies.
Taking Care of Short-Term Emergencies
Three-quarters (75.3%) of households headed by defined contribution (DC)
plan participants have liquid savings equal to three or fewer months of their
income, according to an Employee Benefit Research Institute (EBRI) analysis
of Federal Reserve data. " These people probably will not be able to cover their
expenses if they have an emergency, " says Craig Copeland, senior research
associate at EBRI, in Washington, D.C. " If they build up debt to pay the emergency
expenses, they're going to focus on paying that off, instead of saving
for retirement. Or they'll take the money from their 401(k) account to pay
those expenses. "
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PLANADVISER - November/December 2019
Table of Contents for the Digital Edition of PLANADVISER - November/December 2019
Foul Weather Fund
2019 PLANADVISER Practice Benchmarking Survey
Streamlining the Process
To Surmount the Gender Gap
NQDC Guidance
Employee-Owned
Continued Growth
The Extent of Obligation
Cyberfraud
How to Protect Participant Data
PLANADVISER - November/December 2019 - C1
PLANADVISER - November/December 2019 - FC1
PLANADVISER - November/December 2019 - FC2
PLANADVISER - November/December 2019 - C2
PLANADVISER - November/December 2019 - 1
PLANADVISER - November/December 2019 - 2
PLANADVISER - November/December 2019 - 3
PLANADVISER - November/December 2019 - 4
PLANADVISER - November/December 2019 - 5
PLANADVISER - November/December 2019 - 6
PLANADVISER - November/December 2019 - 7
PLANADVISER - November/December 2019 - 8
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PLANADVISER - November/December 2019 - 11
PLANADVISER - November/December 2019 - 12
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PLANADVISER - November/December 2019 - 14
PLANADVISER - November/December 2019 - 15
PLANADVISER - November/December 2019 - 16
PLANADVISER - November/December 2019 - 17
PLANADVISER - November/December 2019 - Foul Weather Fund
PLANADVISER - November/December 2019 - 19
PLANADVISER - November/December 2019 - 20
PLANADVISER - November/December 2019 - 21
PLANADVISER - November/December 2019 - 22
PLANADVISER - November/December 2019 - 23
PLANADVISER - November/December 2019 - 2019 PLANADVISER Practice Benchmarking Survey
PLANADVISER - November/December 2019 - 25
PLANADVISER - November/December 2019 - 26
PLANADVISER - November/December 2019 - 27
PLANADVISER - November/December 2019 - 28
PLANADVISER - November/December 2019 - 29
PLANADVISER - November/December 2019 - 30
PLANADVISER - November/December 2019 - 31
PLANADVISER - November/December 2019 - Streamlining the Process
PLANADVISER - November/December 2019 - 33
PLANADVISER - November/December 2019 - 34
PLANADVISER - November/December 2019 - 35
PLANADVISER - November/December 2019 - To Surmount the Gender Gap
PLANADVISER - November/December 2019 - 37
PLANADVISER - November/December 2019 - NQDC Guidance
PLANADVISER - November/December 2019 - 39
PLANADVISER - November/December 2019 - 40
PLANADVISER - November/December 2019 - 41
PLANADVISER - November/December 2019 - Employee-Owned
PLANADVISER - November/December 2019 - 43
PLANADVISER - November/December 2019 - Continued Growth
PLANADVISER - November/December 2019 - 45
PLANADVISER - November/December 2019 - The Extent of Obligation
PLANADVISER - November/December 2019 - Cyberfraud
PLANADVISER - November/December 2019 - How to Protect Participant Data
PLANADVISER - November/December 2019 - C3
PLANADVISER - November/December 2019 - C4
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