Key takeaways from the Commonwealth sponsored webinar on June 10, 2025, as part of BlackRock’s Emergency Savings Initiative, “The 4-1-1(k): A SECURE 2.0 Provision’s ‘Grand’ Impact on Emergency and Retirement Savings” with Tom Armstrong from Voya Financial; Kathleen Kelly from Compass Financial Partners, a Marsh & McLennan Agency LLC Company; Carrie Schroen from BlackRock.
The traditional approach to retirement planning has long created a paradox for American workers: save for the future while struggling to handle today’s financial emergencies. Almost 40% of Americans are unable to cover a $400 unexpected expense, many employees face an impossible choice between contributing to retirement and maintaining financial security for immediate needs. The SECURE 2.0 Act’s new $1,000 emergency withdrawal provision is beginning to bridge this gap, offering a practical solution that addresses both short-term financial stability and long-term retirement security.
Key Takeaway #1: Emergency Savings Access Directly Impacts Retirement Plan Participation
The connection between emergency preparedness and retirement planning is stronger than many realize. Recent Voya data reveals a striking pattern: participants without adequate emergency savings are 13 times more likely to take hardship withdrawals and three times more likely to take loans from their retirement plans. Even more compelling, workers with access to emergency savings are 70% more likely to contribute to retirement plans in the first place.
“It’s a luxury to think about tomorrow, when we can’t take care of our families and ourselves today.” As Carrie Schroen from BlackRock aptly noted, alluding to Larry Fink’s 2025 Annual Chairman’s Letter to Investors “No one invests for retirement if they’re worried about paying for a flat tire or ER visit tomorrow.”
Key Takeaway #2: Early Provision Implementation Data Shows Promise, Not Misuse
Despite concerns about potential misuse, early adoption data from providers like Voya tells a reassuring story. Nearly a thousand plans have enabled the provision, albeit still a low percentage of plan sponsors. Voya’s participant data for a large corporate employer reveals less than 1% of participants that have access to this feature are using it on a year over year basis. Furthermore, 90% of participants who utilized the emergency withdrawal option continued to contribute to their retirement plans, suggesting that they managed to either partially or fully repay the withdrawn amount. Notably, 66% of participants that took emergency withdrawals in the first three quarters of 2024 have already completely repaid their emergency withdrawal, underscoring the effectiveness of this support mechanism in maintaining retirement savings momentum.
“We see this fitting best with employers who have a high concentration of low-to-moderate-income workers and lower retirement plan participation,” said Tom Armstrong of Voya. “It’s a new tool to help boost participation by showing employees that retirement savings aren’t completely out of reach and that the money isn’t locked away forever; it can be accessed in emergencies. It’s especially effective when paired with an in-plan or out-of-plan emergency savings solution.”
This usage pattern suggests the provision is functioning exactly as intended—as a targeted safety net rather than a regular income supplement. The compliance framework also appears manageable, with record keepers successfully enforcing the $1,000 annual limits and implementing self-certification processes similar to existing hardship withdrawal procedures.
Key Takeaway #3: New Benefit Success Requires Strategic Implementation and Measurement
Perhaps most importantly, implementation should start small and build strategically. Rather than waiting for perfect conditions or comprehensive solutions, plan sponsors should begin with measurable pilot programs that provide learning opportunities for future expansion.
“Advisors should think about emergency savings both as a short-term withdrawal mechanism and as part of a broader strategy,” said Kathleen Kelly of Compass Financial Partners, a Marsh & McLennan Agency LLC Company. “In most cases, the pieces are already there, whether through the plan’s recordkeeper or payroll provider. It’s not about adding another vendor, it’s about connecting existing solutions.”
Successful implementation requires more than simply enabling the feature. Plan sponsors and advisors need to take a holistic approach that leverages existing vendor relationships, targeted promotion tactics, and incorporates impact measurement strategies to define success.
The most effective approach involves tracking key metrics such as: emergency withdrawal request volumes, plan participation rates before and after implementation, financial wellness survey scores, and overall retirement leakage trends. This data-driven approach allows plan sponsors to understand the true impact of the provision and make informed adjustments.
Moving Forward: The Time for Action is Now
The SECURE 2.0 emergency withdrawal provision represents more than just a new plan feature—it’s a recognition that effective retirement planning must address the full spectrum of employee financial needs. By providing access to small emergency funds without derailing long-term savings goals, this provision helps solve one of the most persistent challenges in retirement plan design.
For plan sponsors and advisors, the message is clear: the tools and data needed for successful implementation already exist within most benefits ecosystems. The key is connecting these resources strategically and beginning with small, measurable steps that can scale over time.
The early adoption data suggests that when designed thoughtfully, emergency access features enhance rather than undermine retirement security. As more plans implement these provisions and generate additional data, the retirement industry will continue refining approaches that serve both immediate financial stability and long-term retirement readiness.
Watch the full recording here.
Disclaimer
- The information and opinions presented here are for general information only and are not intended to provide specific advice or recommendations for any individual or organization. You should contact your investment representative, attorney, accountant or tax advisor with regard to your individual situation. The opinions expressed do not necessarily reflect those of Voya or its affiliates.
