Generation Z (28 per cent), millennial (25 per cent) and generation X (21 per cent) 401(k) members rank a lack of emergency savings as one of the most common factors causing financial stress, according to Cerulli Associates’ latest survey.

In light of the provisions related to emergency savings accounts and student debt under the U.S.’s new Secure 2.0 Act of 2022, which was signed into law in December, Cerulli noted plan sponsors and record keepers now have more leeway to address these concerns among younger workers.

“Plan sponsors and record keepers stand to help facilitate better emergency expense preparation among the participants they serve,” said David Kennedy, a senior analyst at Cerulli, in a press release. “Adopting this optional Secure 2.0 provision is one of the ways they can accomplish that goal.”

Read: New U.S. pension law strengthening retirement savings for workers

Secure 2.0 also includes a provision to help participants accumulate savings through their employer’s 401(k) match while making student loan payments, which could potentially impact the 24 per cent of survey respondents who indicated they carry student loans. Within this group, student loan debt was cited as a top source of financial stress for 17 per cent of gen Z and 11 per cent of millennials.

The survey also found two-thirds (63 per cent) of student debt holders — across all income levels — said they’d continue to make the same payments to their students loans and continue to save the same amount into their retirement accounts with the provision, while about a third (35 per cent) said they’d reduce the amount saved into their retirement plan to pay down their student loans more quickly.

However, once the survey broke down income levels, it found households with fewer investible assets were more likely to reduce the amount they’re contributing to their retirement plan to pay down their student loans more quickly. Around a third (36 per cent) of participants with $100,000 or less in investable assets would do so, followed by 31 per cent of households with $100,000 to $250,000 and 29 per cent of households with $250,000 to $500,000 in investable assets.

“It will take time to see how 401(k) participants’ — specifically younger generations — savings rates, student debt load and financial stresses evolve based on provisions introduced by Secure 2.0,” said Kennedy. “However, plan sponsors now have additional tools at their disposal to address sources of financial stress, potentially improving wellness for this emerging cohort of active participants.”

Read: Nearly 60% of U.S. employers continuing student loan repayment benefits: survey