It is still too early to see the full results of the new option, as no participating employees have taken withdrawals yet, according to Haas-Winkelman. The emergency savings tool is available to all workers on the MGM Studios payroll.
Participation has two big plusses for employees, Haas-Winkelman said. They can make more money on their investments than they would with a regular savings account. They also do not have to pay back any money they withdraw from their emergency savings.
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It is also too early to tell how widely these kinds of retirement plan features will be adopted.
Empower Retirement, which is part of Great-West Life & Annuity Insurance Company, tried offering emergency savings alongside its retirement plans. The company no longer provides that feature. Empower continues to provide educational resources around emergency savings, according to a spokesman.
Because there is so much leakage from retirement plans, anything that lets people save money for emergencies could help reduce that, according to Aron Szapiro, director of policy research at Morningstar.
“As these are experimented with, we’ll learn a lot about the degree to which they work,” Szapiro said. “The idea is quite promising.”
Enabling employees to develop better savings habits can improve their productivity and ability to focus at work, according to Prudential’s Waldeck.
“This is aligned with not only what employers want to do in terms of doing the right thing,” Waldeck said. “It is also aligned with what is good for their business, which is helping their work force be more resilient.”