Chattanooga-based Unum starts emergency savings fund perk for employees

Staff File Photo / A woman walks across Walnut Street in front of Unum's offices in downtown Chattanooga.
Staff File Photo / A woman walks across Walnut Street in front of Unum's offices in downtown Chattanooga.

Chattanooga-based insurer Unum has begun offering a new perk that permits its workers to start an emergency savings fund and put the money into the same kind of selections as in its 401(k) plan.

Carl Gagnon, Unum's assistant vice president of global financial wellbeing and retirement programs, said participants can earn much more than a typical savings or Christmas Club account at a bank.

The company's 401(k) plan typically earns from 7% to 8% annually, he said in a web interview Wednesday.

"They can choose to be conservative or aggressive in that," the Unum official said. "We leave that choice to employees."

Gagnon said that during the coronavirus pandemic, the uncertain economy has created hardships. While Unum hasn't laid off any of its nearly 3,000 workers in Chattanooga amid the pandemic, some of their spouses and partners may have experienced jobs cut, he said.

Results of Unum workforce engagement surveys have shown that three of the top five stressors in the lives of its employees are financial in nature, Gagnon said.

When people are dealing with deviations in their lives, or they need a new roof for a house or transmission for a vehicle, "those can rock a person's life," he said.

The company just started offering the emergency savings fund at the start of this year, and about 300 employees have participated so far, Gagnon said about the business that has more than 10,000 workers worldwide.

"It's about building savings," he said. "When those [problems] occur in their lives, they can address them."

That way, employees don't have to put a sudden expense on a credit card or take out a payday loan, Gagnon said.

"If they've built savings, they can consider that [emergency savings fund] first," he said.

Gagnon said there's no fee to withdraw money. Because the contributions are taxed on the front end, only the gains are taxed on withdrawal.

The official said Unum is at the leading edge of companies nationally in offering such an emergency savings fund for employees.

"We're trying to protect our employees," Gagnon said. "It's a pretty creative way of doing it."

The emergency savings fund has a $10,000 per year maximum contribution per worker, he said, and high-income employees are excluded.

Unum consumer research shows that 34% of U.S. workers have less than $1,000 in their checking or savings account.

Also, 57% said they could only pay their bills for three months or less if they were to lose their main source of income. For millennials, the figure climbs to 70%, while for Gen Z, it's 69%, according to Unum.

Ben Roberge, Unum's director of financial and retirement programs, said the company offers something for each of the insurer's employees.

"Along with our student debt relief program, generous 401(k) matching, and other financial resources, we provide employees tools to reduce financial stress and improve overall well-being," he said in a statement.

Other financial resources Unum offers employees include access to dedicated financial assistants, regular financial well-being checkups and backup emergency care for children, adults and elders as well as leave and family support benefits, according to the company.

Contact Mike Pare at mpare@timesfreepress.com or 423-757-6318. Follow him on Twitter @MikePareTFP.