Alight recently participated in a webinar featuring a panel of experts from HII, Alight, and Kashable, who discussed the problem of employees using their 401(k)s as cash machines and the solution that HII implemented to address it.
Financial wellness challenges faced by American workers
The panelists discussed the financial pressures that many Americans are struggling with such as inflation, debt, medical expenses and lack of emergency savings, and how they resort to borrowing or withdrawing from their 401(k)s, which hurts their retirement readiness and incurs tax penalties.
Kashable: An alternative to 401(k) loans
Kashable is a financial wellness platform that offers low-cost loans to employees based on their employment status, income, and credit history. Kashable integrates with Alight’s Worklife® platform to provide personalized and seamless financial guidance. Kashable loans are an alternative that is less risky to the borrower’s retirement savings, because they’re repaid in two years, do not affect the 401(k) balance and can even improve the borrower’s credit score.
Kashable's impact on HII's employees — study results
The panelists shared the findings of a study that analyzed six years of data from HII and Alight and showed how Kashable reduced the 401(k) loan participation rate by 34%, increased the employee retention by 30%, provided over $60 million in financing and prevented 8,000 401(k) loans. They also showed how Kashable's impact was independent of the macroeconomic trends and how Kashable helped employees with needs driven by life events.
