RETIREMENT SECURITY MATTERS
A forum for retirement innovation information sharing focused on
states, supporters, and service providers.
Vol 28 | April 8, 2021
Portability on Steroids: Let's See It!
J. Spencer Williams,
Founder and CEO,
Retirement Clearinghouse
If you know Spencer Williams, you know he has boundless energy and an invariably positive attitude. He’s also Retirement Clearinghouse’s Founder, President and CEO. Retirement Clearinghouse (RCH) is a specialized provider of portability and consolidation services for America’s mobile workforce and has helped guide more than 1.6 million job-changing participants, over 30,000 plans and $24 billion in assets during Williams’ 14 year tenure with the company. You’ll see why this matters in a few minutes.

Prior to joining Retirement Clearinghouse, Williams served in a number of senior executive roles at MassMutual Financial Group, and as a Retirement Services executive at Federated Investors, Inc. Williams earned his B.A. degree in English from the United States Naval Academy and an M.B.A. from the University of Pittsburgh. Was it the naval influence that drove him to cross at least one state border for a haircut during the pandemic? 
Behind the scenes we call this newsletter “War and Peace” because it stubbornly resists our attempts to keep it short. Naturally our conversation with Spencer was far reaching, and sometimes detailed. We share it in two parts.

Spencer Williams, it is really terrific to talk to you today. You and your company are pioneers in the auto portability space. What is “auto portability” and why do we care about it?

So, what is auto portability? I'm going to start high, and go low. At the highest level auto portability is the first tangible fulfillment of a feature, or benefit, that was baked into ERISA when the law was passed in 1974. ERISA promised portability to participants in defined contribution and defined benefit plans. 
Spencer, let's talk a little more about the relationship you mentioned with Alight. What are you starting to see?

Let me provide some insight around this, some characteristics. One, Alight’s client base is solely made up of large employer plans, generally with over 10,000 employees. They have about 5 million participants in their defined contribution book of business. 
Thank you very much, Spencer Williams! Colleagues, If you’d like to connect directly with Spencer, you can reach him by email here; you’ll see his work bio here. You can follow Spencer’s work adventures on Twitter: @RCHJSpencerW, and connect on LinkedIn here. And you can follow and engage with Retirement Clearinghouse on Twitter @RCHConsolidate, on LinkedIn, and at their site.

Auto IRAs and Employers: What's the Skinny?
Alison Shelton has researched and spoken about retirement security for two decades. She’s one of those people who walks and talks softly but carries the big stick of great experience and wisdom! Actually, she’s such a kind person that she might not want to be referred to as carrying a big stick.

Ms. Shelton previously worked at AARP’s Public Policy Institute, at the Congressional Research Service, and in the domestic and international divisions of the U.S. Treasury Department. Whew! She is a graduate of Smith College and the Wharton School of the University of Pennsylvania.
Alison Shelton,
Senior Officer, Retirement Savings,
The Pew Charitable Trust
Alison Shelton, we are so pleased to have you with us today. You're a Senior Research Officer with Pew’s Retirement Savings team. Tell us about your work.
I'm glad to be here! I've been here at Pew for the most recent four years of this team’s work on retirement security, work-based access, and preservation of assets in retirement.
We know your latest research on the state Auto IRA programs is focused on employers. Tell us what you’re learning.

Yes. We are conducting surveys in multiple states. Some of these state programs are really brand new and we are in beginning stages of those surveys. Oregon’s got a slightly longer history. We were able to survey more than 2,500 private sector businesses in Oregon over 2019 and 2020. What we're talking about today is this first survey work based on the OregonSaves program and employers’ experiences with it.
Key Findings
  • Four-fifths of employers (79.8%) reported that their employees had few or no questions about the program. Approximately 4% of employers reported that their workers had a lot, or a great deal, of questions about the program.

  • Large firms fielded more questions from their workers than small firms, an unsurprising result given that a higher number of employees could generate a higher number of questions.

  • Workers in the following industries had more questions than workers in other industries: leisure and hospitality (24.3%); trade, transportation, and utilities (21.9%); and administrative and support services (20.2%). By contrast, only 14.5% of employers in the manufacturing industry reported receiving questions from their employees. Industries with a greater number of part-time and contingent workers (such as on-call, temporary help agency, freelance, and independent contractors) may see more questions about whether employees qualify for the program.

  • Firms that already had a pension plan for some part of their workforce were more, not less, likely to field questions about OregonSaves from their workers. Although the reasons are not clear, this finding could indicate that new participants in OregonSaves had questions because they were comparing the auto-IRA program with the retirement savings plans used by other employees at their firm.

  • Higher employer satisfaction with OregonSaves is strongly linked to low levels of workers’ questions about the program. Satisfaction may reflect, in part, that OregonSaves’ customer service channels were successful in resolving questions and issues, resulting in fewer questions directed to employers.
Your most recent work focuses on whether employers are getting a lot of questions from employees who've been automatically enrolled. What are your top discoveries?

We found some interesting results!

(… OK people, click here to see the nuances related to these findings, and more!)
Thank you so much for your fresh insights Alison Shelton! Want to connect directly with Alison to ask her some of the questions we didn’t? You can, right here. Connect with Alison on Twitter: @AlisonShelton18, and LinkedIn. And you can follow the work of Alison and her peers at Pew’s Retirement Savings Project here and on Twitter: @pewtrusts.
State Program Metrics - Auto IRAs
We got you! Cheat Sheet: These figures reflect March 31 reporting from CalSavers, but do not yet include March updates from Illinois Secure Choice and OregonSaves. Using most current data, funded accounts, at 313,811, are up 19% since year end and over 80% since September 30. Assets are up 24% over the last three months, flirting with the $200 million mark.

Opt out rates are holding steady from last month at about 32%, and are down both year to date and over the historical measured periods.

Nearly 33,000 employers have registered to facilitate program savings. Three-quarters of these (24,837) have added employee rosters. 40% (13,177) have started payroll deductions for their participating employees. In absolute terms this represents a 13-15% increase year to date, and a 40-43% increase over the last six months.
State Facilitated Retirement Programs - The Latest
Oregon (workforce 1.9 million) – The Pew Charitable Trusts recently released two issue briefs to summarize the results of its survey of OregonSaves employers. The first brief was published March 31, 2021, and the second on April 2, 2021. Overall, 73 percent of participating employers are satisfied or neutral. Four-fifths of employers reported that employees had few or no questions about the program. And, a little bird told us that Oregon crossed the $100 million mark last week 🎂. Cupcakes on us!
Connecticut (workforce 1.6 million) – The Connecticut Retirement Security Authority has posted agendas for recent meetings of its Outreach and Education Subcommittee (April 1,2021), Program Design and Investment Subcommittee (March 29, 2021 and March 24, 2021). The state is targeting a July 2021 date for pilot implementation of its program … so … the countdown is on! Lots of work taking place by CRSA’s staff, committees, and provider BNY Mellon.
Illinois (workforce 5.7 million) – A recent article in Illinois Times summarized AARP-backed bills aimed at reducing racial disparities in the financial situation and health care among older Illinoisans. One of AARP’s policy recommendations is to expand Illinois Secure Choice by reducing the limit for requiring employer participation from 25 employees to one employee. SB 208, currently with Senate’s State Government Committee, would amend the Illinois Secure Choice Act to make the Act apply to employers with at least one employee and require the Board to adopt annual automatic contribution increases.
New Mexico (workforce 950,000) - The New Mexico Work and Save board met March 25 focused on forward-going operations. Chair Lynn Hoffman announced the board’s three new committees: Rules, Education and Outreach, and Finance and Funding and described initial charters. On March 19, SB 129 passed out of the Senate and House and is now headed to the Governor. This bill extends implementation timelines to not later than July 1, 2024. It further clarifies certain definitions and provisions of the programs, as well as the scope of authority of the board.

A C T I V E
Nevada (workforce 1.5 million) – on March 9 introduced a bill providing for the establishment of a retirement savings program for private sector employees. The bill was heard on April 5 and given a “Do Pass” recommendation.
Rhode Island (workforce 540,000) – on March 18 introduced SB640, an Act Relating to Public Finance -- Rhode Island Secure Choice Retirement Savings Program Act. This Act establishes the Rhode Island secure choice retirement savings program. Establishes a board which is a public corporation. Allows for creation of IRA-type retirement investments managed by the board.
Meetings on Deck.

  • California (workforce 17.9 million) –The next meeting of the CalSavers Board is scheduled for June 22, 2021.


  • Illinois (workforce 5.7 million) – The next meeting of the Illinois Secure Choice Board is scheduled for May 13, 2021.


  • Oregon (workforce 1.9 million) – The next meeting of the Oregon Saves Board is scheduled for May 4, 2021.  

Grant's Go-To's: State Auto IRAs - Competition, Coopetition, or just Complementary?
Columnist and Senior Associate Grant Boyken is based in California. You’ll see his Golden State perspectives reflected here – along with 50-state insights into retirement security innovation around the country.

Since the beginning of 2021, I’ve noticed an uptick in media stories and marketing that highlight alternatives to State-Facilitated Retirement Savings Programs (SFRPs) such as CalSavers, Illinois Secure Choice and OregonSaves. One company in California, for example, describes its Pooled Employer Plan (PEP) 401(k)s as more suitable for highly compensated employees because unlike IRAs, 401(k)s allow for employer contributions and have higher annual employee contribution limits.
“Fair enough,” I think to myself as I skim through the press release. But I bristle when I come to their characterization of CalSavers as a “half-measure” with an opt-out rate significantly higher than that of 401(k) plans.

As my initial reaction subsides, I adopt a more measured perspective. If SFRP programs serve as a catalyst for innovation and create opportunities for financial service providers to market to a segment of the workforce that has previously been underserved, isn’t that a good thing? …
Anecdotal evidence that SFRPs are inspiring innovation and uptake is encouraging, but assessing the extent of the “SFRP effect” on the marketplace will require research. 

Stay tuned! / Grant
Hot Sauce! Cool Stuff.
Coming up next week – NIRS’ 12th annual retirement policy conference, Rebuilding the Road to Retirement: Opportunities and Innovations. Dates: April 12-14, 2021, from 1-4 PM EDT daily, virtual. This year NIRS is focusing on the steps being taken by businesses and government to ensure that all Americans are able to achieve retirement security. Important: If you are not a member but are interested in attending this event, please contact Nicole Dascenzo at membership@nirsonline.org for more information.

It’s Financial Literacy Month! So here’s a favorite new (to us) podcast: Minority Mone‪y with Emlen Miles-Mattingly of Gen Next Wealth Management. Why you care: if you are not from the Black community, you may have no idea what it’s like to reach for financial and retirement security in the US. If you want to serve this community, you need to get closer to real people and understand where they’re coming from. Two excellent recent episodes: One. Two.

What We’re Reading: This week it’s The Gentleman Boss – Thomas Reeves’ 1975 biography of Chester A. “Chet” Arthur, US President from 1881 to 1885 in the heart of America’s gilded age.
You may recall that Arthur came to the presidency somewhat by chance, as he was both a dark horse nominee for veepee, and then the successor to James Garfield after Garfield’s death from bungled healthcare following an assassination. The early part of this book focuses on some minutiae that had us questioning the author’s focus, but the pace is picking up. At the moment Chet handling his Civil War duties with amazing alacrity. (Arthur’s birthplace in Fairfield, Vermont – photo Gerald L. Hann)
We’re a little worried because we know Arthur is followed by Grover Cleveland, and this piece by Ashley Flowers isn’t too flattering.

And this is a tiny bit off-topic, but it’s nice and spicy. Give Geoff Sanzenbacher’s piece on voting rights a read!
... pleasssse give us the PIX!
OK, this may be the most impressive single photo ever. In the back you will see the dapper J. Spencer Williams alongside his beautiful wife of nearly 40 years, Loretta. and their children and children’s children. Yes, just the direct descendants. We told you Spencer has more energy than anyone we know! What a great-looking crew on such a special day. #Congratulations! (Can you guess how many kids, spouses, and grandkids there are in the pic? Answer at the bottom)
Weddings do get us thinking of spring, and good weather. In fact just this morning you may have heard some birds singing outside your window, alerting you to the brand new day. If you did but you weren’t certain exactly what species they were, we know who you should ask.
In Maryland where Alison Shelton lives, birding is a rewarding pastime. Even for the birds. Hello little friend!
In Florida, where you may find yourself if it is school holiday week, there are lots of birds. And a few iguanas. We’ve read they are most likely stowaways from South America back in the day. One thing we know for sure. You can toss them a tasty piece of arugula if you like. Go ahead! They want the fries.
And if you grab your plate back in a big hurry, you can still save most of the fries for yourself. #10secondrule #stilldelicious #sorrydude

You may have such a lovely time in the Keys that you begin dreaming of life in an RV parked next to a conch shell. Or something like that. Snap out of it!
Answer: 13 children, 10 spouses, 25 grandchildren and a total of 50 people in the pic.
OK, that’s a wrap. ❤ Hug your people and change the world.
Massena Associates provides process, policy, and implementation consulting on retirement savings programs and products.

Our clientele includes states, governments, policy organizations, and private sector providers. Our specialty – efficient, targeted results. We are an active speaker on retirement security topics, including state-facilitated programs, MEPs and more.

If you’d like to explore working together, we welcome the conversation. Connect with us here, and at 339-236-0684.
RESOURCES
Looking for a great retirement savings innovation resource? Led by Dr. Alicia Munnell, the Center for Retirement Research at Boston College develops and hosts terrific content and proprietary research related to states, financial security, social security, and more.

The Georgetown Center for Retirement Initiatives, Exec Angela Antonelli, provides excellent information on state-based and other retirement security innovation and policy.

Pew’s Retirement Savings Project studies the challenges and opportunities for increasing retirement savings and is another great resource - check out the work of John Scott and his terrific team.

If you want a great source of broad-based, consumer-focused retirement news, Jeffrey H. Snyder’s The Morning Pulse is your ticket. You can subscribe here.