For more stories like this, sign up for the PLANADVISERdash daily newsletter.
Milliman Inc. has announced that it will add SecureSave, an emergency savings program, to the financial wellness services offered to its network of retirement plan clients.
SecureSave is a financial technology platform that allows individuals to build emergency savings through an employer benefits platform. Through SecureSave’s platform, employees can set up free emergency personal savings accounts through the ease of payroll deductions, receive matched contributions from their employer and access their money whenever they need it. According to the firms, the SecureSave user saves an average of $103 a month toward an emergency savings account.
“I know without a shadow of a doubt that an emergency savings account is the key to a life of financial security,” says Suze Orman, cofounder of SecureSave. “To us, SecureSave is more than just a business or a technology product. We believe that everyone deserves to live a life of financial security and that starts with building and maintaining an emergency savings account.”
Emergency savings programs offer participants an alternative to plan loans or withdrawals and are important in helping people create healthy financial outcomes, says Janet McCune, Milliman principal and employee benefits administration products leader. Easy access to emergency funds today allows participants to retain their 401(k) savings for the future, she says.
Devin Miller, CEO and cofounder of SecureSave, says the solution is “purpose-built for employers with an active interest in employee financial success,” and it also serves as an attraction and retention tool for employers in a competitive labor market.
A recent report from the Defined Contribution Institutional Investment Association and Commonwealth gives insight into the progress the retirement industry has made on developing and implementing emergency savings solutions. DCIIA says solutions currently in place and those that are being created are guided by two key insights. The first insight says that emergency savings should be their own “bucket,” meaning funds are placed in an account that is distinct from funds intended for long-term retirement savings. The second insight says that well-designed emergency savings accounts are effective buffers against early withdrawals from retirement savings.
“Ideally, public policy will be supportive of further evolution in emergency savings solutions by providing clarity to plan sponsors, recordkeepers and other providers as to important guidelines and best practices,” the report says. “One significant development would be explicitly allowing for automatic enrollment into emergency savings vehicles.”