Products June 12, 2024

Voya Financial and SecureSave to Offer Emergency Savings Program to Workplace Clients

The tool is available out-of-plan to Voya’s Workplace Solutions clients.

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Voya Financial Inc. announced a collaboration with SecureSave, a workplace emergency savings program, which is now available as an out-of-plan solution to Voya’s clients.

“As the workplace benefits and savings landscape continues to evolve and grow more complicated for employees and for employers, emergency savings solutions can be all that more critical for retirement plan advisers when it comes to supporting the holistic wellness needs of individuals today,” says a Voya spokesperson.

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An effective financial wellness program must inspire individuals to act and make it easy to do so through an impactful solution, the spokesperson states.

“Working together with advisers, this new relationship provides further support—that is easy to implement, customize and monitor savings goals—to help employees better prepare for their ‘rainy day’ needs,” the Voya spokesperson says.

Clients of Voya, regardless of size, can enroll in the program if they want to supplement their existing workplace benefits and savings plan with an emergency savings account option. The program also provides an after-tax savings option supported by voluntary paycheck deferrals.

“We are excited about our strategic relationship with Voya providing a complete emergency savings solution that’s automated, easy to deploy and impactful,” Devin Miller, co-founder and CEO of SecureSave, said in a statement.

To reduce the administrative burden on human resource personnel, the program offers simple implementation and management, Voya stated, including quick employee account activation and pre-built connectivity with numerous major payroll systems. The program also provides advanced reporting, with information on employee signup statistics and withdrawal reasons.

In the event of an emergency, many people turn to their retirement savings. Almost half (47%) of Americans “strongly agree” or “agree” that their retirement plan savings are the only significant emergency savings they have, according to a Voya survey, which was conducted among 1,000 adults in the United States aged 18 and older from January 22 to 23.

The program offered by SecureSave aims to promote financial health by providing plan participants accounts they can access in an emergency that are separate from their retirement savings. The program has produced results. With a 62% adoption rate, employees keep their savings in their SecureSave emergency savings accounts at an average retention rate of 87% as of January 2024.

“For employers, it’s important to recognize that helping support short-term needs today can also help improve employees’ long-term savings goals,” Tom Armstrong, vice president of customer analytics and insight and head of the Behavioral Finance Institute for Innovation at Voya Financial, said in a statement. “A well-designed workplace emergency savings benefit program can be a critical solution to get there.”

Data & Research June 12, 2024

Institutional Plan Consultants: Nearly 90% of Clients Want Income Solutions

PIMCO’s survey of DC plan consultants noted clients seeking a suite of both non-guaranteed and guaranteed income options.

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Institutional defined contribution consultants are getting this message from nearly 90% of clients: We want retirement income solutions to offer our participants, according to PIMCO’s 2024 DC Consulting Study.

In a study capturing data, trends and opinions from 28 consulting and advisory firms working with more than 15,000 clients representing more than $7.9 trillion, respondents said 90% of large institutional clients put retirement income solutions of both guaranteed and non-guaranteed options as a top priority—a 21% increase over 2023.

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“The focus on retirement income continues to be a theme that is top of mind for consultants and their clients,” Rene Martel, managing director and PIMCO’s head of retirement, said in a statement. “As more and more workers enter retirement, we expect to see a secular shift toward income generating investments and services for those who spent decades saving for retirement through defined contribution plans like the 401(k).”

Plan sponsors are focused on adding retirement income options through “plan design, education and expanding investment options for retirees on plan menus,” according to the researchers, who conducted the surveying in January and February of 2024.

Those options can be non-guaranteed or guaranteed, PIMCO noted, with target-date funds being the preferred delivery for non-guaranteed options, and out-of-plan annuities as a guaranteed solution.

The drive toward retirement income may in part be coming as two-thirds of DC advisers believe clients either prefer or are actively seeking to keep retired worker assets in the plan, according to the findings.

But doing so also means providing more options to this participant pool, according to PIMCO. That means more consultants working with clients on expanding the core retirement plan menu to include options such as “multi-sector fixed income and annuities.” 

In-plan retirement income solutions backed by annuities are proliferating, with solutions ranging from institutionally priced annuities available for purchase by participants to TDFs that include an annuity sleeve which participants can be defaulted into when closer to retirement age. Uptake, however, is still relatively minimal, with just 6.7% of plan sponsors offering an in-plan annuity option and another 26% offering them via a managed account service, according to the 2024 PLANSPONSOR DC Benchmarking survey.

The focus on retirement income is somewhat divided between advisers PIMCO labeled as aggregators versus institutional consultants.

Aggregators actually listed financial wellness as the top growing service for clients, not retirement income, which led for institutional consultants. That may be because “aggregators are more likely to provide participant services, including one-on-one advice,” the firm noted. “Institutional consultants are unlikely to provide these services, but will evaluate providers on behalf of clients.”

That bifurcation also has aggregators more optimistic about the use of more personalized managed accounts with income guarantees for the qualified default alternative investment for participants; institutional consultants expect TDFs with guarantees to be the most-used option.

When it comes to TDF managers, consultants say clients are more focused on the glide path’s fit for their participants (89%) than on who has the lowest fees (71%). Meanwhile, historical performance (36%), brand comfort (21%) and return expectations (21%) were only checked by a minority of respondents.

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