Together with Commonwealth, BlackRock’s Emergency Savings Initiative (ESI) published a groundbreaking report, BlackRock’s Emergency Savings Initiative: Impact and Learnings (2019-2022), that highlights ESI’s work researching, piloting, and implementing solutions that increase access to emergency savings for people earning low and moderate incomes (LMI). 

As a founding expert and leading partner in BlackRock’s Emergency Savings Initiative, Commonwealth played a lead role in driving partnerships with systems actors and will continue to lead the movement to make low-cost, accessible, and easy-to-use emergency savings the norm for every worker in America.

Through BlackRock’s Emergency Savings Initiative, Commonwealth partnered with systems-level actors to drive impactful shifts in the employer, payroll, and retirement sectors, creating real-world results including increasing access to emergency savings. ESI reached more than 10 million people and helped generate more than $2 billion in new liquid savings. Commonwealth’s leadership was key to connecting the business value of a financially secure workforce with tangible, proven, and effective programs that significantly impact millions of workers’ financial lives. 

Broad-based financial security is critical for households, communities, and economies to thrive—and we’re excited to continue leading the effort to make emergency savings ubiquitous and make it a priority across the public, private, and social sectors. We are working towards a future where every person living in the U.S. has a true opportunity to build a savings cushion and, ultimately, long-term wealth. Providing tools and opportunities to save that suit the unique needs of households earning low and moderate incomes—who are disproportionately Black, Latinx, and woman-led—is also critical to closing the racial and gender wealth gaps.”

Timothy Flacke, Co-Founder and Executive Director of Commonwealth.

Commonwealth joined BlackRock’s Emergency Savings Initiative as a founding partner at its launch in 2019 alongside Common Cents Lab and the Financial Health Network. BlackRock’s ESI was developed as a response to 2018 data from the Federal Reserve around the dire state of Americans’ short-term savings, which indicated that 39% of Americans do not have $400 in liquid savings, and that the problem is exponentially worse for people living on LMI, and for Black, Latinx, and women-led households.

BlackRock’s Emergency Savings Initiative has made tremendous progress in creating awareness and driving adoption of emergency savings programs across the United States. We are proud to share this report which provides valuable insights for employers, policymakers, and other stakeholders looking to help workers in the U.S. achieve greater financial security.”

Claire Chamberlain, Global Co-Head of Social Impact for BlackRock and Co-President of The BlackRock Foundation

Key Achievements Impact Millions

Through BlackRock’s Emergency Savings Initiative, Commonwealth drove systemic change through their recruitment and leadership of key partnerships with major systemic actors, including employers, retirement providers, financial institutions, fintech companies, and payroll providers. These collaborations developed savings tools and opportunities that significantly move the needle for people earning LMI:

• A partnership with ADP, which processes pay for 1 in 6 Americans, led to dramatic emergency savings growth for a total of $1.55 billion saved, greater uptake, and increased utilization.
  
• UPS effectively drove awareness of and engagement with the after-tax option of its Voya-administered 401(k) plan, leading to a 40% increase in participation and $15 million in contributions over a 21-month period.
  
• AutoNation developed a first-of-its-kind, multi-solution benefit that ensures its diverse workforce has several options to meet their savings needs.
  
• Using prize-linked incentives, higher dividend rates, incentivized educational programming, and a multi-channel employee awareness campaign, Best Buy drove at least 1,360 new employees to open an emergency savings account since January 2021.

• Truist, a top 10 financial institution, motivated 25,000 households to open new savings accounts, accumulating approximately $37 million in balances over a six-month pilot.

Policy Change Marks a Historic First for Employers

BlackRock’s Emergency Savings Initiative was also instrumental in policy; research from Commonwealth and its partners, including the Bipartisan Policy Center, SaverLife, the Defined Contribution Institutional Investment Association (DCIIA), Aspen Institute Financial Security Program, and AARP Public Policy Institute, influenced policymakers’ passage of SECURE 2.0 in December 2022. 

“The passage of this legislation was a significant signal from our government that emergency savings matters, is important for retirement security, and should be eligible for auto-enrollment and employer matches,” said Flacke. “In a historic first, Congress provided legislative clarity on concrete ways for plan sponsors and vendors to create practical emergency savings options in retirement plans.”

Employers Are Critical to the Future of Emergency Savings

The report highlights the critical role of employers in solving the emergency savings crisis, and how these provisions are an important step in enhancing emergency savings and financial security for workers living on LMI. The report also shows that emergency savings is unlikely to hurt retirement savings rates and can even help.

With a focus on workers earning LMI, the report contains many examples of effective out-of-plan solutions that meet the needs of workers who do not participate in or are not eligible for retirement accounts and features case studies drawn from pilots with major employers that outline effective strategies and structures for creating successful emergency savings programs for employees.