It is no secret that financial concerns are at the top of mind for employees throughout the US. This stress can come from budgeting, building savings, and knowing that one or two unexpected events in their lives could throw their financial situation into chaos.
Experts recommend that employees have enough in an emergency savings account to cover three to six months’ worth of expenses, yet studies indicate that more than half of all Americans (51 percent) have less than three months’ worth of savings for emergencies. Unum Group recently worked with the American Benefits Council, the Brookings Institute, and our 401(k) provider, Fidelity, to develop a financial savings safety net – built through the establishment of an Emergency Savings Program. The program, which was launched in spring 2023, allows 401(k) eligible employees to contribute any amount up to $10,000 to a fund that can be utilized to pay for any unforeseen expenses, without having to dip into retirement or credit cards.
Since the program’s launch, a total of 491 employees have enrolled, with combined contributions of $943,285. As of November 2023, the average savings per employee was $1,414. Unum Group’s program comes at a time when the majority of Americans say they cannot afford a $1,000 emergency expense, according to Bankrate. To date, Unum Group employees have withdrawn $329,888, but over 85% of those employees who have taken withdrawals still have kept money in their accounts, and most continue to contribute.
"Life is full of surprises, often coming with a hefty price. Our company wants to make sure that employees have the financial resources they need to address these situations when they occur"
Life is full of surprises, often coming with a hefty price. Our company wants to make sure that employees have the financial resources they need to address these situations when they occur. Our Emergency Savings Program is designed to help our employees build that important safety net through a simple, automatic process so they are better able to plan for financial emergencies and ease their minds during stressful times.
The Emergency Savings Program is an after-tax deferral program offered through the Unum Group 401(k) retirement plan. This emergency savings fund increases an employee’s personal savings and provides crucial funds that can pay for expenses such as housing, transportation, health care, groceries, childcare, debt payments and more.
Much like our 401(k) plan, Unum Group allows employees to set a deferral percentage that ranges from 0-50 percent and can contribute up to $10,000 per year on an after-tax basis. Additionally, the Emergency Savings Plan has the same investment options as the company’s 401(k) program, which means that the employee’s emergency savings have the potential to grow faster than contributions to a traditional bank-held savings account. Employees can start or stop deductions and can withdraw from the account at any time. If an employee does not use the funds, it will continue to grow and can be utilized as additional retirement savings. We are thrilled with the initial engagement with this program, and I am excited to watch our employees’ participation grow more and more throughout the coming years.
