How a Socially Responsible Credit® benefit helped Huntington Ingalls enhance employee retirement security
Huntington Ingalls is America’s largest military shipbuilding company and a leading provider of government technology, with a 135-year history of advancing U.S. national security.
It employs 44,000 people and has a built a culture where workers are proud to spend decades at the company. “We have well over a thousand people with 40 plus years’ of service, and it’s not uncommon to have three or even four generations of the same family working in our yards,” explains Kimberly Csan, Huntington Ingalls’ Director of Benefits, Strategy and Engagement. Indeed, employees can earn the highly-coveted Master Ship Builder designation only after 40 years—and many strive for that honor.
Because its bonds with employees are so strong and long-lasting, Huntington Ingalls has always taken workers’ well-being seriously. Csan explains that her department established a Healthy Body, Healthy Mind, Healthy Wallet strategy to identify and address any obstacles to employee well-being. One problem they uncovered: at the time they launched the program, employees were able to take out two loans at a time against their retirement plan assets—and an alarming number of employees had done so.
Employees were using these retirement plan loans to cover unexpected expenses. “We know things happen. Refrigerators break down, cars break down, medical expenses build up,” says Csan. “Those kinds of things can put financial pressure and the stress on our employees.” But every time an employee borrows against retirement savings, he or she makes it harder to accumulate enough assets to retire in comfort. A consultant brought in to evaluate the 401(k) plan found that, even if they waited to retire until age 70, only 78% of HII employees would have enough to cover their most basic needs. Worse still, only 46% would have enough to maintain their pre-retirement lifestyle, again, even working to age 70.
HII quickly realized it was important to restructure its 401(k) loan program so that employees could only take out one loan at a time. To help fill the gap that might be left, they implemented Kashable, a benefit that allowed employees to take out low-cost loans that are automatically repaid through the company’s payroll. The program, launched in March 2020, gave employees additional financial security during the COVID-19 pandemic, and enabled them to cover regular and unexpected expenses without tapping into their retirement funds. That allowed employees to stay invested through the March 2020 market break and subsequent recovery.
Nancy Hicks, Corporate Benefits Manager at Huntington Ingalls, added that, in addition to 401(k) loans, a huge problem facing employees was a lack of access to affordable credit. Many employees were previously forced to turn to high-cost payday loans to meet unexpected costs.
Offering Kashable has allowed even people who have been shut out of traditional banking services to access the credit they need. “So many people have been afraid to go to a bank. We had a huge problem with payday loans in our community,” she explains. “Our employees value the ease of being able to get their loan from someone their employer trusts, Kashable.”
The results have been dramatic. About 35% of employees who participated used Kashable loans to pay down existing, higher cost debt. Others used it for emergency expenses, and a small percentage took out loans for travel (7%) and special occasions (2%). But it doesn’t stop there. HII sees Kashable loans as part of a broader initiative to serve a diverse workforce equitably. “We’re trying to gain a broader understanding of what economic inequality really means, and asking ourselves, what are we doing internally?” says Hicks. “We’re going to be developing a roadmap to help us achieve higher economic equality within our organization. Kashable is certainly a significant part of the puzzle.”