AutoSave Overview

AutoSave is a unique savings plan that automatically diverts through payroll deduction a small amount of post-tax wages into an accessible savings account. Savings that are fully under an individual's control are valued as a form of self-insurance, a key ingredient in one's sense of security, and as a personal safety net that can be tapped in the event of unanticipated expense. These are "flexible savings," in contrast to savings that are restricted as to use (often by the tax laws), such as for retirement or for medical expenses. Currently no systematic savings program exists to intentionally encourage short-term flexible savings.

This new infrastructure, near-seamlessly enabling individuals to contribute small amounts of their wages into an accessible, non tax-advantaged savings account, will be especially valuable for individuals who have limited liquid assets, and who may otherwise be forced to meet emergency liquidity needs with high-cost emergency loans.

With support of the Rockefeller Foundation, New America's Asset Building Program and MDRC, a nonprofit, nonpartisan education and social policy research organization conducted intensive concept and product development in 2008. We engaged employers, employer intermediaries, financial services firms, asset building practitioners, and other experts to inform the pilot design and vet the core elements of the model.

Throughout our research and learning phase, we heard enthusiasm for the idea of automated non-retirement savings, especially for lower-wage workers, and are confirming that the strategy of making this as "opt-out" as possible is indeed a novel one. We also heard from employers that AutoSave could enrich an employer's benefits package and enable an employer to address issues of financial insecurity that may result in absences or reduced productivity.

The workplace is a promising asset-building delivery channel that has been rarely utilized to facilitate saving for non-restricted, emergency use. AutoSave has the potential to change this situation. Furthermore, the potential to produce new and compelling research into the role of unrestricted savings that would emerge from such a demonstration underscores the importance of executing a well-crafted pilot.

We are seeking employer (public, private, not for profit, for profit) and financial institutions partners (banks and credit unions) to participate in a national AutoSave pilot.

To read about the AutoSave conceptual groundwork or the rationale for a workplace facilitated savings program, please see the documents below. For two-page overviews of the AutoSave concept and the pilot, please also click below.

This work is made possible by the generous support of the Rockefeller Foundation and the Charles Stewart Mott Foundation.

• AutoSave Links
• Articles
• AutoSave In the News
• About Us

AutoSave Links

• Automating Savings in the Workplace: Insights from the AutoSave Pilot
  • Alejandra Lopez-Fernandini, Presentation, November 2009
• AutoSave Pilot Overview
  
  • Policy Paper, October 2009 (revised)
  Savings Made Easy--Perfect for Tough Times
  • Podcast, March 2009
• AutoSave Concept Paper: The Rationale for a Workplace-Facilitated, Automatic Savings Mechanism
  • Policy Paper, November 2008
• AutoSave Overview
  • Policy Paper, July 2008
• AutoSave: A Proposal to Reverse America's Savings Decline and Make Savings Automative, Flexible and Inclusive
  • Working Paper; July 2006

Articles

Save More for Yourself and America

As the economy slows, millions of Americans will cut their budgets to stay afloat. This generates conflicting impulses: If I skip that morning coffee and granola, will my thriftiness put my local coffee shop out of business?

Will that force America's granola farmers to lay off workers? What's a budget-conscious, patriotic and hungry girl to do?

Not to worry, saving a few dollars now will not prolong the recession. And, more important, spending all your discretionary income will not end the recession.

Alejandra Lopez-Fernandini | CNN.com | March 18, 2009

PODCAST: Savings Made Easy -- Perfect for Tough Times

Alejandra Lopez-Fernandini | March 11, 2009

End the War on Savings

Finland recently launched a war -- on household savings. The campaign warns Finns to lay off the piggy bank, pleading: "Don't feed the recession." The rhetoric there is quite similar to reports we've seen here from economists and Wall Street forecasters nervous at signs that U.S. consumers are starting to save.

Alejandra Lopez-Fernandini, Rourke O'Brien | USA Today | February 12, 2009

More:

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AutoSave In the News

• Saving Grace
  • Reid Cramer, The American Prospect
    January 20th, 2007
• Detroit Free Press Quotes Reid Cramer on AutoSave
  • "A New Twist to Some Smart Old Advice Can Help Get Americans' Savings Rate Up"
    December 10, 2006

About Us

About Us

The Asset Building Program of the New America Foundation develops policy and best practice ideas to support long-term asset accumulation, flexible savings and asset-building financial services. With MDRC, a nonprofit, nonpartisan education and social policy research organization, we conducted extensive research and planning in 2008 to develop a pilot to that would explore utilizing the workplace to increase personal saving. We seek for-profit employers, government agencies, and non-profit organizations to participate in a 2009 pilot, as well as financial institution partners. For more information, please contact Alejandra Lopez-Fernandini, 202-986-2700, lopez@newamerica.net.

For more information about MDRC, click here.

For more information about the Rockefeller Foundation, click here.