Workplace emergency savings accounts (or ESAs as they’re starting to be known) have rapidly become the top requested financial benefit for most working Americans. It’s easy to understand why when 53% of Americans don’t have any emergency funds according to CNBC Your Money Financial Confidence Survey and nearly 40% would struggle to handle a $400 unexpected emergency according to the latest from the Federal Reserve. All of this in a high inflation world.
Employers are responding to this urgent need to drive better financial wellness and are now further motivated by the passage of Secure Act 2.0, which highlights emergency savings. In fact, Transamerica predicts that 40% – 60% of all employers will offer emergency savings accounts by 2026. And at a recent Plan Sponsor Council of America conference, roughly three in four plan sponsor attendees raised their hands in response to a question prompting how many planned to adopt emergency savings in 2024 or 2025.
As organizations’ strategic conversations shift from “are we doing emergency savings?” to “what should we consider as part of an emergency savings program”, they’re leveraging Requests for Proposals (RFPs) and Requests for Information (RFI) to learn.
If you’re leading one of these RFP or RFI searches for workplace emergency savings accounts, you don’t need to start from scratch. We’ve put together a comprehensive list of factors to consider based on our experience with large business and enterprises, benefits consultants, retirement plan advisors, as well as actual RFPs we’ve submitted.
Examples of key factors include plan design, platform capabilities, program economics, technical integration and program implementation, security and privacy, engagement and marketing approach, and measuring success. Let’s dive in.
Want a simple RFP template that captures these factors? Reach out to us at firstname.lastname@example.org and we will send you a file directly!
Workplace Emergency Savings Plan Design
In retirement savings, plan design refers to the series of decision a plan sponsor makes as they formalize a 401(k) or similar such benefit. It covers eligibility, automatic enrollment, employer contributions, deductions and loans, and a myriad of other factors.
Thankfully, the world of emergency savings is intentionally simpler. We suggest including the following factors in your RFP:
In-plan or out-of-plan
This is the first big decision: do you want an in-plan or out-of-plan emergency savings program? But it should not be made in isolation. An “in-plan” emergency savings account is rolled out typically alongside the retirement savings plan subject to ERISA law. Secure Act 2.0 specifically enables automatic enrollment into in-plan ESAs, but there are some drawbacks as well. Out-of-plan are often simpler and provide greater flexibility with employer contributions, but do not enjoy automatic enrollment yet or the same pipelines built for retirement savings.
Some employers may choose to limit the emergency savings benefit to non-leadership roles only, or segment based on income. If you decide to go in-plan, some of these decisions are pre-made based on Secure Act 2.0.
You may choose to have a probationary period that’s in line with your broader benefits eligibility requirements, perhaps 30 to 60 days. For in plan, again make sure you’re compliant with Secure Act 2.0.
Consider offering sign-up bonuses to incentivize enrollment, or reward continued savings behavior and achieving milestones by additional bonuses or rewards. This is an exciting area where employers can use their creativity and lean on behavioral science especially if choosing an out-of-plan approach. All employers on Sunny Day Fund choose to offer rewards, with most doing ~$300 per enrolled employee per year.
Minimums or maximum employee contributions
Consider any minimum or maximum employee contribution requirements for the program. In all cases, we recommend a dollar-based choice for employees, rather than a percentage, with the ability to change contributions at any time.
Determine when is best for rolling out the program – during open enrollment alongside everything else, or perhaps in line with another organization milestone such as a wellness month? This ends up being an important part of plan design because of the anchoring effect alongside retirement savings or other mainstay benefits.
Platform Capabilities Powering Workplace Emergency Savings
Beyond their opinion on plan design, your provider should give more detail about their actual services and how they meet your organization’s needs. In your RFP, we suggest you include:
Goal-based savings vs. Emergency Only Fund
One popular feature with an emergency savings program is to enable employees to plan ahead and save for large financial expenses, like a security deposit or holiday gifts. That mental accounting could influence employees to put away more cash, all of which could be tapped if there’s a true emergency.
Type of money storage accounts
This is where and how the employees’ money is stored, and may include savings accounts, money market accounts, or other types of investment accounts. Ask whether these are individual demand deposit accounts, or the money is under an omnibus or “for benefit of owner” account, as it may have implications for FDIC-coverage, portability, and trust.
A crucial part of an emergency savings program is the actual funding process. Some providers deduct the savings directly from the paycheck as a post-tax contribution, which we believe is the preferred and safest approach. Others rely on drawing from employees’ personal checking accounts after their paycheck hits. Your finance team may also influence this process in case they prefer to wire or ACH the deductions separately instead of letting the provider draw themselves or payroll system pay the provider.
Incentivization or rewards approach
Building on employer contributions from a plan design perspective, it’s important to understand exactly what customization is feasible based on the provider’s offerings. Some employers are choosing to limit contributions based on income, while others are rewarding based on how long an employee has been tenured. Understand what’s possible.
Reporting capabilities and data sharing
Ensure that the provider can provide reports on program participation, average balances, withdrawals, and key performance metrics (see below for more). While some of this information is optional and can only be shared as anonymized, aggregate detail, other reports and logs on employee contribution allocations are must-haves for traceability. If your organization leverages an internal dashboard of KPIs, make sure that the provider can share details needed to report to leadership.
We recommend solutions that offer portability, allowing employees to take their emergency savings with them when they leave the organization. Portability is now the preferred approach driving individual trust and access, while also reducing the administrative burden on the employer.
Mobile, web only, or mixed experience
Mobile apps are now the standard, but a shockingly high percentage of working America either lacks the local storage or the right version of operating system on their phones. Consider something flexible, based on your demographics.
A simple sign-up process is critical for employees who are already inundated with many emails and asks. Ask whether detail can be pre-filled, or embedded into their benefits workflow in HRIS or benefits admin tool.
Similarly, employees need to be able to get their money when they need it – and quickly. At the same time, keep in mind that this is a savings program, not a spending program, so ask about how we encourage better behavior, either in platform or via education.
A technology that meets employees where they are – including their language – is critical given a country with nearly 68M people speaking a language other than English.
Accessibility (e.g., ADA)
Request information on the platform’s accessibility standards, ensuring compliance with the Americans with Disabilities Act (ADA) to accommodate employees with disabilities.
API integrations and/or SFTP
Determine whether the provider offers API integrations or secure file transfer protocols (SFTP) for data exchange with other systems, especially payroll.
Interconnectivity with other elements
Determine the provider’s ability to integrate with other systems, such as payroll or retirement savings platforms, for data sharing or single sign on.
Creating a consistent brand from employer to their benefit helps build trust and reinforces the employee value proposition.
Service desk and technical support
Employees on the frontlines may not always be able to call in during business hours, or some prefer call and text over email. Inquire how the providers approach these support issues. Importantly, ask if service is available in Spanish, or another primary language of your workforce.
Go beyond where the product is today to understand what the provider plans to do next. For example, they may be releasing new payments options like a card so employees can receive money quickly. Or there could be an AI-based goal planning and spending bot. Importantly, consider what role you may play in defining that roadmap.
Program Economics of a Workplace Emergency Savings Program
All emergency savings programs will come with some form of an investment – but the key questions are who is paying and how much? Here’s how you can ask those questions.
Determine the provider’s pricing model, such as per employee per month, per enrolled employee per month, per account, per transaction, monthly tier-based Software as a Service fee, and/or based on total savings. Be wary of “free” models, it’s typically a sign that the employee is somehow paying, they’re selling data, or their model is not sustainable. You can also find in most providers websites a way to calculate both the investment and impact from an emergency savings program like here.
Typical group sizes
If you’re issuing an RFP, you’re likely a larger organization and want to make sure that the provider can support or scale to service larger organizations. If you’re a network of smaller companies, like a franchise model, you may want to make sure that the provider can also assist those smaller business needs. In either case, you want a scalable economic model.
Determine whether there needs to be a minimum participation and whether that’s a realistic goal for your demographics. Ask if there are any penalties for non-participation or delayed launches.
Billing cycle and terms
A fairly standard question, but it can become more interesting with how rewards and bonuses are handled for cash flow.
Transitions and implementations
Some providers may charge for implementations or roll-offs due to the nature of upfront or wind-down work.
Outcome-based bonuses or clawbacks
Employers can always ask (even if providers do not answer) whether they can structure the agreement in a way that’s aligning expectations and economics for both stakeholders via bonuses and/or clawbacks.
Implementing and Marketing a Workplace Emergency Savings Program
The implementation of the program is crucial to its success. A typical implementation includes three main components – data integration with payroll, aligning on flow of funds, and benefits marketing. Here’s how you can look for those three things:
Project plan and timeline
A good provider should be able to convey a realistic plan and timeline that’s beyond a blanket number of weeks or months – the timeline should encompass key activities and milestones. Benefit consultants agree that the sign of a more mature provider comes down to how they manage their clients expectations from start to launch to post-launch review.
Payroll data integration
Whether connected via flat files or an API, it’s important to be on the same page from the start about how the payroll data goes to the provider. Consider also asking specifically if and how they worked with your particular HRIS or payroll system.
Reconciliation and audit
Enterprises and large businesses typically have policies on ensuring all records are properly maintained, or are audit ready. They should strive for the same in their provider.
Employee enrollment process
Building on the enrollment technology flow, consider the overall user experience and process that the employee needs to undergo and what data may need to be provided to streamline. Consider the employee enrollment process, including communication and training. Ask whether the enrollment can be embedded in their HRIS workflow, or whether it’s all off platform. Ask what issues the provider has faced with enrollments, especially given Know Your Customer laws in banking.
Marking channels for enrollment and general information
There are many channels through which an organization and its provider can market for enrollment its new ESA program during kickoff or open enrollment, but it’s impossible to do all at once. Ask where the provider has had the best success and which channels yield align most closely with your employees.
Marketing during open enrollment, new hires, termination
Request information on the provider’s marketing strategies during key stages of the employee lifecycle, and note that these could be different from the launch strategy.
Continued communication after enrollment
Understand how the provider plans to maintain ongoing communication with employees after they start saving. Examples can include providing access to additional financial education or coaching.
Focus on key demographics
Discuss the provider’s strategies for engaging specific employee demographics, such as select frontline worker groups or Spanish-speaking employees.
Digital vs. physical engagement
Digital engagement strategy via email has now become standard, but there may be additional approaches over text or social. In organizations with a physical workforce location or perhaps older workforce, there may be a preference for an in-person presence. Others may prefer mailers.
Unique marketing or empowerment strategies
Encourage providers to propose their unique strategies for driving engagement, which can be outlined in their response to the RFP. This freeform approach helps you learn new strategies you may not have previously considered.
Request case studies from the provider to showcase their success stories, share metrics, and demonstrate their ability to engage employees effectively. These can be as simple as blog posts like this one for a logistics client or a recorded conversation. Make sure to collect testimonials from the employees themselves.
Sales of additional services
Inquire about the provider’s approach to offering additional financial services or products to employees, beyond the emergency savings program. You may choose to limit these types of services.
Security and Privacy as Employees Enroll and Save
Ensuring the security of your employees’ financial information is paramount. In your RFP, include the following security considerations:
SOC 2 Type II or equivalent coverage
Request information on the provider’s security certifications and coverage, and whether there were any qualifications on the opinion (warnings) during the certification process. During this process, other items such as background checks on employees or internal organization processes and compliance are also covered.
Data collection and privacy
Learn the provider’s data collection practices, including how they collect, store, and use employee data, while maintaining privacy and compliance.
Cyber insurance coverage
Inquire about the provider’s cyber insurance coverage to protect against data breaches and security incidents. In this age, cyber insurance is an absolute must.
Credit checks on users
Understand the provider’s processes for conducting credit checks when they’re enrolling new employees. This is not a standard practice, but it’s important to know as these credit checks could impact employees’ credit scores.
Standard IT and Legal checks
Ensure that the provider has ongoing firewalls, code scans, and other IT and legal checks in place to protect against potential vulnerabilities.
KPIs Measuring Success in Your Workplace Emergency Savings Program
As you evaluate your investment in an ESA-driven financial wellness strategy, you will need access to different metrics and reports. Consider asking for the below:
NPS or Equivalent Customer Satisfaction Score
Ask how existing users / employees on providers’ platform are rating their satisfaction, or whether they would recommend the benefit to their colleagues.
Enrollment or take-up rate
Learn about the average enrollment or take-up rate for the provider’s existing clients’ programs to understand their success in driving participation, especially in certain industries.
Average savings contributions and balances
Unlike retirement savings, the goal of an emergency savings program is not to maximize balances. However, the account ideally is also not being used like a transactional checking account. Having a pulse on contributions and balances can help understand whether the savings activity is yield the expected financial well-being outcomes.
Impact on retirement plans
Learn whether the emergency savings is leading to better outcomes on retirement savings, such as participation or loans. Make sure to compare with existing studies like this one from DCIIA, Aspen Institute Financial Security Program, and Morningstar or this one from Commonwealth on how emergency savings have lowered retirement savings loans and withdrawals. You can also look at the relational impact that the CFPB has studied over the last decade.
Other KPIs and reports
Based on the provider’s unique platform, other reports may be available. For example, if the savings program has more than just an emergency savings goal, that could be valuable data on other priorities for your workforce. Other analytics can include demographic breakdowns or financial health indicators.
Values Alignment and Other Important Considerations in Choosing an ESA Provider
Lastly, include the following considerations in your RFP to ensure a comprehensive evaluation of potential providers:
Ask about any strategic partnerships that enhance the provider’s capabilities, such as a financial education or coaching partner, or perhaps a recordkeeper partner.
Procurement differentiators (e.g., MBE)
Consider procurement factors such as whether the provider is a certified Minority Business Enterprise, Veteran-Owned, or Women-Owned, to promote diversity and inclusion within your procurement process.
Approach on policy
Ask for the provider’s approach to policy matters, such as compliance, tax advantages to either employer or employees, and adherence to industry best practices.
Values & team background
Of course, make sure that who you will be partnering with aligns with why you exist as an organization.
Summary of Workplace Emergency Savings RFP Factors
Creating a Request for Proposal (RFP) for a Workplace Emergency Savings Program is a critical step in selecting the right provider for your organization. By considering these factors in your RFP, you can make informed decisions based on the providers’ plan design, capabilities, economics, implementation and marketing approaches, security and privacy, performance measurement, and values alignment. Find a summary graphic of all the factors below.
Choose a provider that aligns with your organization’s goals, values, and the needs of your employees. With a well-designed workplace emergency savings program in place, you can empower your workforce to build financial resilience, alleviate financial stress, and achieve the business and workforce wellbeing outcomes that make your investment worthwhile.
Remember, the success of the program ultimately rests on both you and your provider, so take this as an exercise to ready yourself too. Good luck with your RFP process, and may it bring about financial sunshine to your employees and organization!