The Weekly Slice: Supporting Emergency Savings
Aspen Partnership for an Inclusive Economy
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Family Finances
At a Tipping Point: The Workplace Emergency Savings Landscape as SECURE 2.0 Implementation Begins in 2024
Thanks to the passage of the SECURE 2.0 Act two years ago, employers can now automatically enroll employees into emergency savings accounts (ESAs) within the structure of their retirement savings plans. But a host of companies, nonprofits, and fintechs are ahead of the game, having already launched “out-of-plan” ESAs. Though these accounts lack the legal framework for automatic enrollment, they’ve generated a lot of knowledge about setting up and administering ESAs.?
The Aspen Financial Security Program has been gathering and analyzing that knowledge, and the program’s Kara Watkins, Jason Ewas, and Karen Biddle Andres recently shared what they’ve learned in a post on the Institute website.?
What’s new:
Emergency savings accounts are expected to become more common as the SECURE 2.0 Act comes into effect.
Why it matters:
ESAs enable employees to accumulate liquid funds that can help households manage financial shocks and reduce the risk of hardship.?
How high-quality ESAs work:
Other key features:?
The most effective ESA programs may also offer automatic enrollment, financial incentives such as one-time employer contribution or employer match, no fees, no account minimums, and clear and consistent communication about the program.
What else:
The data the program has collected supports the “Four Pillars of Workplace ESAs,” to wit:
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Equitable Employment
Creating Real Value: Skills Data in Learning and Employment Records
Haley Glover of UpSkill America—an initiative of the Economic Opportunities Program—wants to know what kind of data should go into a learning and employment record. She’s been asking leaders from human resources, talent acquisition, learning and development, and management—the people who need to know what a candidate or employee knows and knows how to do.?
The answer, unanimously and emphatically, is verified skills data. It seems that while previous experience, educational attainment, and credentials tell part of a story, nothing informs like actual data.
Why employers value skills data:
In the post, Glover provides the stats that back up employer reasoning, along with quotes from the professionals she’s been querying. As more and more organizations deprioritize degrees and credentials—signifiers that don’t always indicate readiness for a job—verified skills data will only grow in importance.
Local Leadership
Remember Dignity: Dr. King’s Charge for Mayors and Local Leaders
When Dr. Martin Luther King Jr. spoke out for civil rights, many of the rights he championed were specifically economic. A recent post from the Institute’s City Innovation Program notes that he found human dignity to be an essential component to the fight against poverty—and that mayors are key to that vision. Local leaders are well positioned to pursue “human rights and the worthiness of all people to experience such items as fair pay, safety in all forms, and adequate housing.”
The post’s authors—who include Mayor Shawyn Patterson-Howard of Mount Vernon, New York and Mayor Sheng Thao of Oakland, California—believe that local leaders’ political power and relevance have grown over the years, and will only increase as the world’s population becomes more urban.?