Best Buy, ADP and Truist are among the latest companies exploring ways to help their employees build emergency savings, working with BlackRock’s Emergency Savings Initiative to do so, the firm announced Wednesday.
Such efforts could lead to emergency accounts that accompany 401(k)s — an option that researchers have said benefits from behavioral economics and reduces the reliance people have on their retirement plans as a source of income in a pinch.
Last year, Voya Financial, UPS and Mastercard began working with affiliates of BlackRock’s program, including Commonwealth, Common Cents Lab and the Financial Health Network. Online marketplace Etsy also began consulting with those groups in 2020 with the goal of developing a program for its sellers.
“Each partner we work with in a way that’s relevant to them,” said Timothy Flacke, executive director of Commonwealth. That can include research on how to help employees or clients and support in building the programs, he said.
“People realize that it’s really a crucial and often missing piece of people’s financial lives,” Flacke said. “The last year has underscored how being prepared for emergencies of different kinds” is necessary.
A report this week by the Society of Actuaries found that 44% of people of all ages have started paying more attention to emergency savings since the pandemic began, and 22% of people surveyed said they could not afford to cover unexpected bills of $1,000 or more. About 40% of people also said they have reduced their spending as a result of the pandemic. Those data come from a survey of more than 2,000 people conducted by Greenwald Research in January.
BlackRock’s initiative is funded by a $50 million commitment from the company, and it works in partnership with Commonwealth, Common Cents Lab and the Financial Health Network.
In the collaborations announced this week, the businesses are exploring different ways to help improve emergency savings. Best Buy, for example, already has an emergency savings program and is looking for ways to make it better and improve participation, according to BlackRock’s announcement.
ADP is testing emergency savings through Wisely, and Truist is planning to offer emergency savings to clients. Two other companies — Self and Varo — have also started working with the Emergency Savings Initiative.
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