PLANADVISER - September/October 2022 - 15

Savings for Low-Earners
How they want to be prepared for emergencies
COMMONWEALTH and the Defined Contribution
Institutional
Investment
Association
Retirement Research Center have
released new survey findings that show
workers earning a low or moderate income
continue to face challenges in financial
security, exacerbated by the pandemic.
With the current economic environment,
it has become even harder to build
liquid savings for unexpected expenses.
The two organizations' report, " Emergency
Savings Features That Work for Employees
Earning Low to Moderate Incomes, " examines
how employers and service providers
can build and offer emergency savings
solutions designed for these workers.
Individuals with lower financial wellbeing
scores are more likely to want a
workplace emergency savings program,
the report says, also noting that
those
enrolled in one and who have emergency
savings were less apt to have accumulated
debt, to be prematurely tapping retirement
savings or to have taken actions that jeopardize
their financial future.
Lower-wage earners said they prefer
that an emergency savings solution have
no fees (34%), have no minimum balance
requirements (17%), and be liquid (16%)-
i.e., allow immediate access to funds. Over
the nearly 1,000 respondents, these preferences
stayed consistent regardless of race,
gender or exact earnings.
The report suggests that these findings
should demonstrate what features to priortalking
points
Annuities Ascending
Total U.S. annuity sales increased 16% to $79.4 billion
in the second quarter, according to LIMRA's U.S. Individual
Annuity Sales Survey. Fixed-rate deferred annuity and
registered index-linked annuity sales reached an all-time
high in the quarter, while fixed index annuity sales fell
just short of a record quarter.
itize when choosing or designing an emergency
savings solution.
Participants are overwhelmingly interested
in incentives: 91% said these can help
motivate them to open a savings account.
They gave employers multiple options for
structuring the incentive, including giving
rewards for opening an account (98%), for
saving consistently (93%) and for reaching
a target savings amount (92%).
Workers with no emergency savings
were significantly less likely to contribute
to a defined contribution plan, the report
says. Offering an emergency savings solution
could help boost retirement plan
participation, it observes.
Those eligible but not participating in a
DC plan tended to be younger, to earn less
and to be Black or Latino, the report says.
Overall, lower-wage earners had less preference
for an emergency savings account
linked to a workplace retirement account
than did workers who earned more, which
could portend a challenge for the solutions.
The study also asked questions to gain
employee benefit
insight
into effective
communication strategies, as emergency
savings solutions lack automatic enrollment
or payroll integration. Most employees
deemed email (55%) their primary source
of news about benefits. Many supported
having their employer increase communications
(35%), hold workshops (35%) or have
a human resources representative present
updates (35%). -DJ Shaw
➜ MetLife Investment
Management entered
into a definitive agreement
to acquire Affirmative
Investment
Management, a
global environmental,
social and corporate
governance impact
fixed-income investment
manager.
➜ Triton Pacific
Securities added
Katie Hubbard in a
newly created role,
senior vice president
of registered investment
adviser channel
and Western capital
markets.
➜ Mercer Global
Advisors Inc. acquired
Jordan Financial Strategies
LLC, a wealth
management firm
located in Denver.
➜ Putnam Investments
appointed Jacquelyn
VanderBrug as head of
sustainability strategy,
a new position. She
will join the company's
operating committee.
➜ PGIM Fixed Income
appointed Diane
Parker as head of diversity,
equity and inclusion
to develop and
implement a global
DEI strategy specific to
the company and its
employees around the
world.
planadviser.com September-October 2022 | 15
➜
http://www.planadviser.com
PLANADVISER - September/October 2022

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