Why We Built the CARES Act 401(k) Calculator and Virtual Advisor
ForUsAll was founded to help everyone build a brighter financial future. That has always meant providing more accessible retirement benefits far away from the Fortune 500. Participants in our 401(k) retirement plans are the backbone of America: people who work for smaller businesses, doing regular jobs. These are the people we’re here to help. In the midst of the global coronavirus pandemic, that help has never been needed more.
I joined ForUsAll as Head of Engineering because of our mission. Most of us did. Even in a world without coronavirus, many people were financially struggling. ForUsAll was founded to help ordinary people navigate a world burdened with unprecedented financial inequality.
Once the effects of COVID-19 began to be felt across the world, that mission became increasingly important. With the pandemic came the looming shadow of a deep recession, skyrocketing unemployment, and an increasing number of people who can’t pay for basic essentials like food and housing. We set out to help people find their way to financial safety in the way we always have: with a mission-driven, scalable, technology solution, built with empathy and a desire to help the most vulnerable.
Unemployment claims 2006 to April 4, 2020
Our Pause/Boost tool was our first response to the crisis. It allowed 401(k) participants to temporarily either pause their contributions if they needed more financial leeway, or boost them if they wanted to take advantage of the market downturn, all with one click. It was a whole-team effort. We brainstormed how we could help our participants on a Monday, and by the same time the next week we were live.
An unprecedented number of participants chose to modify their retirement savings with the tool. No legislation had been approved; 401(k) plans had not yet been modified specifically to help participants affected by COVID-19. Nonetheless, by working cross-functionally, we were able to find a way to help - faster than most traditional financial institutions could have managed.
Making the CARES Act Easy to Navigate for Everyone
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was proposed with provisions that allowed workers who were affected by COVID-19 to gain immediate access to their retirement savings. Participants in a 401(k) plan whose incomes were affected by the pandemic would be able to either withdraw or take a loan up to $100,000 without penalty for early withdrawals. We knew that although the bill had not yet been finalized or approved by Congress, these provisions would almost certainly pass into law.
Our technology integrates across payroll provider and recordkeeper systems, providing a simple, 1-Click interface that helps participants make better investment decisions.
ForUsAll is a technology-enabled 401(k) advisor. That means we sit between a company’s payroll provider and the recordkeeper: the custodian organization that makes investments on behalf of a plan participant. Our technology integrates across payroll provider and recordkeeper systems, providing a simple, one-click interface that helps participants make better investment decisions. Our integration engine also allows us to make our advisory services more affordable, making them more accessible to smaller businesses.
Every payroll provider and recordkeeper works in a different way. There are no standards for how data is transferred in a 401(k) system, so we painstakingly build and maintain integrations with each new platform we work with. By concentrating on optimizing our technology integration engine, we can provide an easier-to-use solution that works at scale with more payroll providers and recordkeepers.
But when the CARES Act was proposed, we didn’t know how payroll providers or recordkeepers would react - or when. Our solution needed to help participants understand their options, even if recordkeepers had not yet updated their policies. And we needed to be able to quickly change our advice and provide deeper integrations once the recordkeepers caught up.
By the time the CARES Act passed at the end of March, long before recordkeepers had finalized their plans, we had already designed and scoped our solutions.
Our advice should never assume any level of financial sophistication. If we’re serious about helping everyone build a brighter financial future, our tools must genuinely be useful for everyone. Nobody should ever be expected to understand how a 401(k) plan works to receive help. We knew the same standard of accessibility needed to apply to the nuances of the CARES Act, too. Nobody wants to stop and understand the small print in a legislative bill when they’re desperately trying to figure out how they’ll pay for groceries.
It also needed to work across devices. While knowledge workers in Silicon Valley often enjoy expensive laptops, super-fast internet, and large screens, checkout assistants at rural community grocery stores might not. Providing an inclusive, accessible service means taking care to ensure it works for anyone, regardless of their context, no matter how they choose to access the internet.
Two Tools to Navigate COVID-19 Related Distributions
By the time the CARES Act passed at the end of March, long before recordkeepers had finalized their plans, we had already designed and scoped our solutions.
Ultimately, we decided to launch two tools. For participants with limited time, we set out to build the CARES Act 401(k) Calculator, a website that would allow you to determine your eligibility quickly. It calculates the potential impact on your savings at retirement, and provides you with concrete next steps that depend on the details of your 401(k) plan.
For participants that need more help understanding their options under the CARES Act, we decided to build an update for DAVE, our friendly, virtual advisor that we’ve always made available for our customers. DAVE is a conversational tool with a human voice, who gently takes you through the basics of setting up and configuring your retirement savings. In this context, he asks questions about how you’ve been affected by COVID-19, makes suggestions, and leaves you with an actionable way to proceed.
The CARES Act 401(k) Calculator lets the user drive the process entirely; DAVE leads the user through a series of choices with a friendly voice. As with all our tools, both were built using open web standards. No app is required: just click a link on any device with a web browser, and you can get started.
Our development methodology is iterative. That means we don’t stop after releasing one version of a tool: we actively solicit real feedback through conversations, and then continuously improve it over time. Our first versions of our CARES Act tools are starting points; as more people use them, we’ll learn and optimize to provide the best advice we possibly can.
Available to Anyone
While we originally conceived of these tools for our customers, it became clear that we could help more people if we allowed any company with a 401(k) to use them for free. It’s not about building our revenue: it’s about helping people determine what their options are during a crisis.
We modified our plan. Any company that wants to provide CARES Act help to its employees impacted by COVID-19 can use our tools, regardless of which payroll provider or recordkeeper you use. We’ll hand-hold you through the process of setting up, configuring them, and providing them to your participants. The only thing we ask is that you give us feedback, so we can continue to improve them. As more people give us feedback, the more we can continue to develop these tools to provide the best help possible.
So let’s get started. Today, they’re available for any company that provides 401(k) retirement benefits to its employees. To learn more and configure our tools for your company, you can visit our CARES Act 401(k) Resource Center or set up time with a retirement consultant now. We’ll be glad to help you.
