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A12 business
Tuesday 17 OcTOber 2023
Someday your boss could help you

save for emergencies

By LIZ WESTON
of NerdWallet
When I wrote about em-
ployer-provided emergen-
cy savings accounts four
years ago, the idea was still
pretty novel. Some com-
panies were experiment-
ing with ways to help their
workers save for short-term
needs, but the concept
wasn't even on the radar
for many employers.
What a difference the pan- In this April 2, 2018, file photo, an IRS Form 5305, Simplified
demic made. Millions were Employee Pension — Individual Retirement Accounts
thrown out of work with little Contribution Agreement is shown in New York. Associated Press
warning, and few had the
financial reserves to survive But there's also been a gan, those companies
even a few months of un- growing awareness that have been joined by sev-
employment. Big employ- emergency savings are eral big employers — in-
ers, and lawmakers, took key to financial health, he cluding UPS, Starbucks,
notice, says Claire Cham- says. Even a small amount Delta Air Lines and Best Buy.
berlain, global head of so- of savings can help fami- Some provide incentives to
cial impact for investment lies avoid falling behind encourage savings: Delta
manager BlackRock. The on bills or turning to high will chip in up to $1,000 for
result: Hundreds of thou- cost loans. Workers without workers who complete a
sands of workers now have emergency savings are less financial education pro-
options to build emergen- likely to contribute to retire- gram, for example, while
cy savings through their ment plans, and those with Starbucks contributes up
employers, and Congress savings are less likely to tap to $250.
passed laws to encourage the retirement savings they One of the biggest hits
more companies to add have, Flacke says. so far is a savings feature
short-term savings options. In addition, companies are that payroll processor ADP
"I think a lot of people woke aware that financial stress added to its Wisely pre-
up," Chamberlain says. takes a toll on workers' paid debit card and app.
PANDEMIC HIGHLIGHTED productivity by distracting Wisely can be used by em-
AMERICANS' FINANCIAL them during working hours, ployers to pay workers as
FRAGILITY Chamberlain says. an alternative to checks
Employers tend to overes- "It's that productivity drag or direct deposit. The sav-
timate their workers' finan- that I think at its core is mo- ings feature allows users to
cial stability, says Timothy tivating employers," Cham- set up automatic transfers
Flacke, co-founder and berlain says. to a "savings envelope,"
executive director of Com- PUSH FOR EMERGENCY and transfer savings back
monwealth, a nonprofit SAVINGS PICKS UP STEAM to their available balance
that promotes financial In 2019, BlackRock whenever they need to
security. The pandemic launched its Emergency spend the money. By the
brought home the reality Savings Initiative in partner- end of 2022, Wisely us-
that most Americans live ship with Commonwealth, ers had saved more than
paycheck to paycheck, the Financial Health Net- $1.55 billion, Chamberlain
and many have little or no work and a third nonprofit, says.
emergency savings. Common Cents Lab. The DON'T EXPECT AN EMER-
"COVID really changed a initiative started with a GENCY SAVINGS PLAN AT
lot of things in terms of an handful of employers and OPEN ENROLLMENT
employer's understanding financial services firms ex- We're a long way from em-
of the day-to-day financial perimenting with emergen- ployer-provided emergen-
challenges of their people," cy savings programs. cy savings accounts being
Flacke says. Since the pandemic be- as common as employer-
provided health insurance
or retirement plans. But
momentum seems to be
building.
"It is rare that I have a con-
versation with an organiza-
tion of any size that is not
thinking about emergency
savings," says Matt Bahl,
Financial Health Network's
vice president and head
of workplace financial
health.q