PLANSPONSOR - December 2022-February 2023 - 35

TOTAL BENEFITS
at it within the retirement plan? Are you
looking at after-tax as an opportunity to
build up the savings? Is there an opportunity
to automatically enroll someone into
multiple accounts? "
Expanded Access
There have been several new products
introduced in the marketplace in recent
years aimed at helping employers solve
this problem. Among the most highprofile
launches is one by SecureSave,
a
company
in Kirkland, Washington,
co-founded by personal finance guru Suze
Orman in 2020. The eponymous product
integrates with company payroll systems,
so workers can set up automatic transfers
into a separate account, which they
can access via a website or app. To make
a withdrawal, they then transfer funds to
their personal account, as they would with
a consumer app such as Venmo or PayPal.
" We wanted to take the best components
of health savings accounts and
build a product that is laser focused on
emergency savings, " says co-founder and
CEO Devin Miller. " We work with plan
sponsors, as well as recordkeepers, banks
and benefit providers, to help them bring
emergency savings to their customers. "
Millennium Trust Co. introduced
a similar product also in 2020. Once
onboarded, employees have access to an
online service portal, which they can use
to manage their account.
T. Rowe Price introduced its emergency
savings product, Waysaver, this
past October. That out-of-plan product
allows participants to automatically
contribute to an emergency savings fund
at a bank insured by the Federal Deposit
Insurance Corp.
Not everyone agrees that the retirement
industry should be so focused on
ESAs. Brent Weiss, co-founder of Facet
Wealth
Inc.,
a
registered
investment
adviser firm in St. Petersburg, Florida,
points out that individuals may open an
emergency savings account on their own
and set up automatic deposits to it. He
says employers might be better served
by investing instead in a financial wellness
program that offers tailored advice-
including information about how to set up
an emergency savings account and why it
is a good idea.
" Plan sponsors need to think more
problems
holistically
about
the
their
participants are facing in their lives, " he
adds. " They need access to competent,
ethical, educated and experienced [consultants]
who can offer one-on-one financial
coaching or advice to help employees make
better decisions in their everyday life. "
Different Approaches
Several Fortune 500 companies,
including Starbucks Corp., The Kroger
Co. and United Parcel Service Inc., have
added ESAs to their suite of benefits,
and advisers say plan sponsors increasingly
ask about the programs. For now,
there are various ways to set one up, with
some employers creating in-plan, pre-tax
accounts and others opting for out-ofplan,
after-tax accounts; the latter may
be easier for workers to access, penalty
free, in case of an emergency. Employers
typically facilitate such benefits through
payroll deduction and offer a small dollar
amount to match or seed the accounts.
There are pros and cons to both
in-plan and out-of-plan emergency
savings options, says Bennett Hadley, a
senior actuarial associate in Segal's retirement
practice in New York City. In-plan
options tend to be less expensive for the
plan sponsor but are a bit harder for participants
to access, while out-of-plan options
are more flexible but require participants
to maintain and keep track of a separate
account, he notes.
One of the most important factors
in a successful workplace emergency
savings program is making it easy to use
and understand, he says. " Plan sponsors
need to remove as many barriers to entry
as possible. If these things are complicated
or difficult to use, you're not going
to get much engagement, even if it could
help participants. "
A Commonwealth Fund survey of
workers with low to moderate income
found strong interest in ESAs, with a
preference for accounts that had no fees,
no minimum balance and a provision
allowing immediate withdrawal of funds,
when desired.
For employers that do opt to put an
ESA program in place for employees,
successful execution will require a
communication strategy that stresses
educating workers about how the program
works, who qualifies and the potential
benefits of participation, says Sara
Vipond, a defined contribution financial
wellness research senior associate at
Mercer in St. Paul, Minnesota.
" The communication should be as
personalized as possible, " she says. " It
needs to express that the employer is trying
to help the employees meet their needs. "
SECURE 2.0
The SECURE 2.0 legislation was passed
as part of the December 2022 omnibus
spending package, and among other plan
design initiatives, it addresses emergency
spending. Participants may now withdraw
up to $1,000 once a year to pay for
an unforeseeable or immediate financial
need relating to a personal or family emergency,
without
incurring an early-withdrawal
tax penalty. The person must repay
the amount in full before borrowing again
and has three years to do so.
Employers may also offer retirementplan-linked
emergency savings accounts
that would allow four penalty-free withdrawals
per year. Employees could
contribute a maximum of $2,500 to such
an account.
The retirement plan industry has
been widely supportive of this legislation,
with more than 60 companies and
lobbyists signing an industry letter urging
Congress to pass new regulations.
" The implementation of those provisions
will be hugely helpful, " says Dave
Amendola, senior director, retirement,
at WTW in Fairfield, Connecticut. " This
will be a huge push in terms of employer
adoption of ESAs. " -Beth Braverman
PLANSPONSOR.COM December 2022 - February 2023 35
http://www.PLANSPONSOR.COM

PLANSPONSOR - December 2022-February 2023

Table of Contents for the Digital Edition of PLANSPONSOR - December 2022-February 2023

INSIGHTS
RULES & REGULATIONS
PARTICIPANT ANALYSIS
UPFRONT
Risk Protection
Benchmarking Beyond Fees
Exploring ESG Investing
In Case of Emergency
Employee-Owned
FIDUCIARY FORUM
INSIDE ANGLE
PLAN PROFILE
PLANSPONSOR - December 2022-February 2023 - Cover1
PLANSPONSOR - December 2022-February 2023 - Cover2
PLANSPONSOR - December 2022-February 2023 - 1
PLANSPONSOR - December 2022-February 2023 - INSIGHTS
PLANSPONSOR - December 2022-February 2023 - 3
PLANSPONSOR - December 2022-February 2023 - RULES & REGULATIONS
PLANSPONSOR - December 2022-February 2023 - 5
PLANSPONSOR - December 2022-February 2023 - 6
PLANSPONSOR - December 2022-February 2023 - PARTICIPANT ANALYSIS
PLANSPONSOR - December 2022-February 2023 - UPFRONT
PLANSPONSOR - December 2022-February 2023 - 9
PLANSPONSOR - December 2022-February 2023 - 10
PLANSPONSOR - December 2022-February 2023 - 11
PLANSPONSOR - December 2022-February 2023 - 12
PLANSPONSOR - December 2022-February 2023 - 13
PLANSPONSOR - December 2022-February 2023 - Risk Protection
PLANSPONSOR - December 2022-February 2023 - 15
PLANSPONSOR - December 2022-February 2023 - 16
PLANSPONSOR - December 2022-February 2023 - 17
PLANSPONSOR - December 2022-February 2023 - Benchmarking Beyond Fees
PLANSPONSOR - December 2022-February 2023 - 19
PLANSPONSOR - December 2022-February 2023 - 20
PLANSPONSOR - December 2022-February 2023 - 21
PLANSPONSOR - December 2022-February 2023 - 22
PLANSPONSOR - December 2022-February 2023 - 23
PLANSPONSOR - December 2022-February 2023 - 24
PLANSPONSOR - December 2022-February 2023 - 25
PLANSPONSOR - December 2022-February 2023 - 26
PLANSPONSOR - December 2022-February 2023 - 27
PLANSPONSOR - December 2022-February 2023 - Exploring ESG Investing
PLANSPONSOR - December 2022-February 2023 - 29
PLANSPONSOR - December 2022-February 2023 - 30
PLANSPONSOR - December 2022-February 2023 - 31
PLANSPONSOR - December 2022-February 2023 - 32
PLANSPONSOR - December 2022-February 2023 - 33
PLANSPONSOR - December 2022-February 2023 - In Case of Emergency
PLANSPONSOR - December 2022-February 2023 - 35
PLANSPONSOR - December 2022-February 2023 - Employee-Owned
PLANSPONSOR - December 2022-February 2023 - 37
PLANSPONSOR - December 2022-February 2023 - FIDUCIARY FORUM
PLANSPONSOR - December 2022-February 2023 - INSIDE ANGLE
PLANSPONSOR - December 2022-February 2023 - PLAN PROFILE
PLANSPONSOR - December 2022-February 2023 - Cover3
PLANSPONSOR - December 2022-February 2023 - Cover4
https://www.plansponsordigital.com/plansponsor/december_2022_february_2023
https://www.plansponsordigital.com/plansponsor/october_november_2022
https://www.plansponsordigital.com/plansponsor/august_september_2022
https://www.plansponsordigital.com/plansponsor/june_july_2022
https://www.plansponsordigital.com/plansponsor/excellenceawards_2022
https://www.plansponsordigital.com/plansponsor/april_may_2022
https://www.plansponsordigital.com/plansponsor/february_march_2022
https://www.plansponsordigital.com/plansponsor/december_2021_january_2022
https://www.plansponsordigital.com/plansponsor/october_november_2021
https://www.plansponsordigital.com/plansponsor/august_september_2021
https://www.plansponsordigital.com/plansponsor/june_july_2021
https://www.plansponsordigital.com/plansponsor/april-may_2021
https://www.plansponsordigital.com/plansponsor/february-march_2021
https://www.plansponsordigital.com/plansponsor/december-january_2021
https://www.plansponsordigital.com/plansponsor/october-november_2020
https://www.plansponsordigital.com/plansponsor/august-september_2020
https://www.plansponsordigital.com/plansponsor/june-july_2020
https://www.plansponsordigital.com/plansponsor/april-may_2020
https://www.plansponsordigital.com/plansponsor/february-march_2020
https://www.plansponsordigital.com/plansponsor/december-january_2020
https://www.plansponsordigital.com/plansponsor/october-november_2019
https://www.plansponsordigital.com/plansponsor/august-september_2019
https://www.plansponsordigital.com/plansponsor/june-july_2019
https://www.plansponsordigital.com/plansponsor/april-may_2019
https://www.plansponsordigital.com/plansponsor/february-march_2019
https://www.plansponsordigital.com/plansponsor/december_2018-january_2019
https://www.plansponsordigital.com/plansponsor/october-november_2018
https://www.plansponsordigital.com/plansponsor/august-september_2018
https://www.plansponsordigital.com/plansponsor/june-july_2018
https://www.plansponsordigital.com/plansponsor/april-may_2018
https://www.plansponsordigital.com/plansponsor/february-march_2018
https://www.plansponsordigital.com/plansponsor/december_2017-january_2018
https://www.plansponsordigital.com/plansponsor/november_december_2017
https://www.plansponsordigital.com/plansponsor/october_2017
https://www.plansponsordigital.com/plansponsor/september_2017
https://www.nxtbookmedia.com