Whole Foods Plans Benefit to Plug Workers’ Saving Gaps

The company announced this week it will offer emergency savings accounts in 2024.

Amazon subsidiary Whole Foods Market will join a growing number of large U.S. employers that offer emergency savings accounts as an employee benefit, announcing plans to bring emergency savings accounts to full-time and part-time U.S. employees beginning in 2024.

Julie Cunningham, vice president of total rewards, talent and learning & development posted on LinkedIn information about the launch including:   


The American multinational supermarket chain, headquartered in Austin, Texas, worked with Fidelity Investments to build the program.

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

Almost 1,500 Fidelity workplace clients have chose to use Fidelity Goal Booster, says Emily Kolle, vice president, Goal Booster.  

“Emergency savings is one of several goals available through Goal Booster, which makes it difficult to say which employers are focused on emergency savings alone, but we do know that emergency savings has been the most popular goal selected by employees for some time,” says Kolle. 

“We are continually looking for new and innovative benefit offerings for our team members,” said Brian O’Connell, Whole Foods’ senior vice president of team member services, in a statement. “We are excited to add Fidelity’s savings program to our suite of financial wellness benefits, creating an easy way for team members to save for unexpected expenses—one paycheck at a time.”

Delta Air Lines and Starbucks are among several large companies that have recently implemented emergency savings benefits to help employees achieve savings goals, with Delta enhanced its program in August to provide greater flexibility. According to Delta, employees who enrolled in the emergency savings program have increased their 401(k) contributions.

“It’s great news that more and more employers are looking to add emergency savings: we think it’s foundational,” says Pamela Hess, executive director of retirement research at the Defined Contribution Institutional Investment Association. “It sets a foundation for folks’ and their financial health and that ability to withstand shocks and withstand financial challenges is critical so they continue to save and reach their long-term goals. It’s wonderful to see Whole Foods signing-on and being another large employer taking that step and we think the more it becomes a snowball effect, the more employers doing the more mainstream it becomes, which we think is really critical to help all workers.   

Fidelity recently published data highlighting that Americans’ persistent lack of savings to cover unexpected expenses­—coupled with economic events like inflation and market volatility—has increased the stress on their finances. In a sign of financial stress, 57% of U.S adults could not afford a $1,000 emergency expense, according to a Bankrate LLC report published in January.

“We’re seeing a lot of employer interest in implementing emergency savings programs for a diverse workforce, like organizations in the retail sector such as grocery chains, says Nick Maynard, senior vice president at Commonwealth. “Employees earning low and moderate incomes are often living in the financial present, carrying financial anxiety and stress. [Research] has demonstrated that having emergency savings contributes to both short- and long-term financial well-being, like retirement.”

Whole Foods’ workforce comprises more than 90,000 employees, according to the company’s LinkedIn page. Representatives for Whole Foods Market did not provide additional details on the emergency savings program.

Workers’ Emergency Savings Shortage Showing in Shaky Retirement Security

Fidelity Investments has revealed several best practices for employers to incorporate, bolstering access to emergency savings options and to limit early retirement-fund withdrawals.

Americans’ lack of savings to cover unexpected expenses is not a new issue,­ but economic events—inflation and market volatility—have shined a brighter spotlight on the stress on people’s finances. One sign of that stress is that the percentage of plan participants taking an early withdrawal from a retirement plan has increased over the past five years, according to analysis of transactions by Fidelity Investments.

More than three times as many participants took a hardship withdrawal in 2023 than did in 2018, Fidelity noted in a recent publication for employers. Hardship withdrawals increased to 6.9% in 2023 from 2.1% five years ago; in-service distributions increased to 10.2% this year from 9.2.% in 2018; and plan loans increased to 5.7% in 2023 from 4.4% in 2020—a five-year low—although slightly down from 6.5% in 2018.

Get more!  Sign up for PLANSPONSOR newsletters.

That 2023 in-service distributions and plan loans are also higher than those taken in 2020 is noteworthy, at least in part, because such activity was higher that year as the COVID-19 pandemic-era CARES Act permitted penalty-free distributions. Hardship withdrawals were significantly higher in 2020, however, at 15.1%.

Importance of Emergency Savings

Other than preparing for retirement, emergency savings ranks as participants’ top saving goal, according to recently published Fidelity data of active workplace plan participants from January 1, 2020, through August 31, 2023.

“In looking at data from similar checkups from previous years (2022 and 2021), emergency savings was ranked first behind retirement in each of those financial wellness checkups as well,” says Emily Kolle, vice president, Fidelity Goal Booster. “In terms of why it is so high now, Americans have long struggled to maintain emergency savings, but the economic and world events of the last several years—including inflation, market volatility, and individuals still recovering from the financial impacts of the pandemic—have exacerbated the issue. In today’s current economic climate, many individuals are struggling to even meet their everyday expenses, never mind putting money aside for emergencies.”

In another sign of financial stress, 57% of U.S adults could not afford a $1,000 emergency expense, according to a Bankrate LLC report published in January.

“Today’s economy has left many Americans living paycheck to paycheck, and the thought of setting aside money for the unexpected can feel daunting,” said Kevin Barry, president of Fidelity Investments’ workplace investing division, in a statement. “The good news is many employers are stepping up to support the financial wellness of their workforce with emergency savings benefits.”

Several large employer-sponsored retirement plans have recently implemented benefits to help their employees achieve short-term savings goals, including Delta Air Lines, Starbucks and Whole Foods Market. Following Delta’s January launch of an emergency savings benefit, the company enhanced the program in August to provide greater flexibility. Early results summarized by Delta show that airline employees enrolled in the emergency savings program have increased their 401(k) contributions.

Fidelity-Recommended Best Practices

Fidelity’s publication provided best practices to get employers involved, noting that the “secret” to get workers to save is to start with a goal.

For example, employee interest increases when employers offer an incentive. According to Fidelity, its research showed an incentive for emergency savings can increase adoption of the accounts by 10 to 20 times. Allowing funding of the accounts through payroll deductions can double funding, Fidelity reported.

Fidelity also suggested to employers several factors that can boost employees’ short-term and emergency savings:

  • Providing easy access to emergency funds quickly;
  • Offering the emergency savings benefit to all employees, not only those eligible for the retirement plan;
  • Ensuring workers can take emergency savings with them if they quit or are terminated; and
  • Assuring employees that information about their personal finances is private from the employer.

Data in the report came from internal Fidelity analysis and Employee Benefits Research Institute data. 

«