After hearing from employees about their collective lack of emergency savings, Delta last year launched a program to help. To entice employee takeup, the airline offered $1,000 with some strings attached. "We knew that we'd have employees' attention with this $1,000 carrot in front of them," said Josh Jessup, general manager of global retirement and financial wellness at Delta, during the symposium.
To get the $1,000, employees have to meet one-on-one with a financial coach, establish an emergency savings account and set up automatic payroll contributions to it. After they meet with the coach, Delta contributes $750 to their emergency savings account and once employee contributions hit $250, Delta provides another $250, Jessup explained.
To date, more than 25,000 Delta employees have earned the $1,000 and 90% of the people who have contributed continue to do so, added Jessup, who said Delta has been "blown away" be the employee response.
Amazon in mid-2023 launched an emergency savings program of its own that has seen early success, said Justin Roberts, principal, global financial health, during the symposium. Though he said it's too early to measure what success looks like, Roberts said Amazon has made a big effort to make employee enrollment as easy as possible.
The company has integrated the emergency savings program into the employee app where workers check their pay stubs and other vital information. "We want it front and center and easy to do," Roberts said. The only way to keep somebody from having a financial shock and having to use the emergency financial coaching benefit — another Amazon offering — "is to make sure that they have adequate emergency savings," he added.
He advised the attendees that although emergency savings "is not the most exciting topic to talk about with your employees … I would highly encourage you to do so."
The Department of Labor on Jan. 17 issued guidance for plan sponsors and participants to establish, maintain and utilize "pension-linked emergency savings accounts," but both Jessup and Roberts said they don't plan to link their companies' emergency account offerings to their retirement plans just yet.
"Part of our motivation for implementing an emergency savings account is we have a higher utilization of 401(k) loans than we would like to see," Jessup said. "We want to disconnect people thoughts of their retirement account as the place to go to for emergencies."
As of Sept. 30, Delta had $27 billion in defined contribution assets, and Amazon had an estimated $19 billion in DC assets, according to Pensions & Investments data.