Delta Air Lines

As a transportation company, Delta Air Lines, headquartered in Atlanta, was hit hard by COVID-19. Many employees whose hours were slashed or who went on leave for lack of work made substantial withdrawals from their 401(k) account.

“The pandemic was devastating for Delta as a company because there was almost no commercial travel taking place for months at a time,” says Josh Jessup, general manager of global retirement and financial wellness at Delta. “We had thousands of employees take voluntary unpaid leaves during that time, and so, coming out of the pandemic, we knew we had to rebuild Delta financially.”

So 2023 became a year to increase employee support, to nurture a culture of employee saving. Key to the sponsor’s efforts was to add an emergency savings program.

“We were looking to figure out the best way to support our employees from a financial wellness perspective,” Jessup says. “We did a lot of research, we talked with vendors, we surveyed our employees, we had a lot of face-to-face conversations with employees—trying to understand what they wanted. As we looked at all the offerings [on the market], the one thing we just kept coming back to as a top request from our employees—as a fundamental aspect of financial wellness—was emergency savings,” Jessup says.

The program Delta designed sits outside the 401(k) plan, and it provides a $1,000 incentive contribution for each new participating employee.

Delta had several specific objectives for the emergency savings program, Jessup says: to alleviate near-term financial pressure by building emergency savings; to improve financial literacy and thereby strengthen financial confidence and control; and to increase 401(k) savings rates—and retirement readiness—by reducing new loans. Additional goals were to lessen employee financial stress, to improve productivity and to address turnover issues, he says.

The company also had what Jessup calls “many nonnegotiable requirements for the program.”

“We wanted the ability to make company contributions into employees’ emergency savings,” he says. “Employees had to be able to set up an automated payroll contribution; the emergency savings account had to be easily accessible with no minimums, no account fees; and we needed to be able to incorporate financial education and the necessary reporting to track employee completion to provide incentives.”

Since no existing off-the-shelf offering could handle all those requirements, the sponsor had to be especially resourceful. “Fortunately, we had great partners who were willing to help us create a custom program. But that also resulted in many behind the scenes requirements for our retirement and financial wellness team to facilitate. The incredible response to the program made managing this program and nearly a full-time job for much of our team.

Included in the program is an educational component to improve workers’ financial literacy as they save. The education has been helping, Jessup says. Those who completed the financial literacy education were more likely to increase their 401(k) contributions, he notes.

For the emergency savings program overall, Delta found that 22% of participants who had enrolled increased their 401(k) deferral rate—this was 120% higher than the rate among workers not enrolled in the program. And results were two to three times higher among participants from Delta’s minority populations.

—Noah Zuss