Meet HII
The Problem: Forging a Path to Retirement
401(k) Loan Utilization Volume
High Usage
The volume of 401(k) loans is notably high, particularly at Newport News, with utilization reaching its peak during the pandemic, a period when employees likely faced the most significant financial hardships.
Source: Kashable, Alight, HII 401(k) Research
HII recognized the urgent need to help support their employees financial wellness. In collaboration with Alight and Kashable, HII began to offer their employees a comprehensive financial wellness program. This initiative aimed at preventing premature 401(k) withdrawals and and promoted employee financial stability.
Kashable – A High Impact Benefit for Hll Employees
401(k) Loan Participation Rate
Reduction In Utilization Post Kashable
After implementing Kashable, the 401(k) loan participation rate, which peaked during the pandemic, has now significantly decreased. This decline is evident alongside an increase in Kashable loan utilization.
Pre-pandemic Average (2017-2019): 15.5%
Post-pandemic (2022): 10.2%
Reduction in Participation Rate: 34.1%
*Note that a portion of the decline in the participation rate is attributable to the increase in the denominator (Eligible employee count) between 2021 and 2022 from the addition of a new group to the Newport News population.
Source: Kashable, Alight, HII 401(k) Research
% of Kashable Borrowers That Didn’t Take 401(k) Loans
Kashable Loan Satisfies Need for Most
76% of employees who took a Kashable loan did not need to take a 401(k) loan. That’s nearly 8,000 401(k) loans prevented.
Overlapping Borrower 401(k) Loan vs Rest of 401(k) Loan Size
Kashable Borrowers Took Smaller 401(k) Loans
401(k) loan borrowers that did not take a loan with Kashable, borrowed 57% higher from their 401(k) than those that borrowed with Kashable.
The Solution
HII responded by restricting the ability to take multiple loans from 401(k) accounts in hopes to reduce habitual borrowing. Nevertheless, HII sought a more supportive approach to tackle the root causes of early withdrawals.
Kashable played a crucial role by offering low-cost loans as an alternative to 401(k) withdrawals and high-interest payday loans. Kashable’s platform integrated into HII’s HR and payroll systems, ensuring an efficient loan process for their employees.
Building a ‘Healthy Wallet’
“Offering Kashable has allowed even people who have been shut out of traditional banking services to access the credit they need, said Kimberly Csan, Corporate Director of Benefits at HII. “We had a huge problem with payday loans in our community. Our employees value the ease of being able to get their loan from someone their employer trusts, Kashable.
Securing employees’ finances by reducing their borrowing or withdrawals from 401(k)s is crucial for ensuring retirement readiness and avoiding tax penalties. The partnership between HII, Alight, and Kashable highlights how innovative financial wellness programs can help to build a Healthy Wallet’.