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RETIREMENT SECURITY MATTERS
A forum for retirement innovation information sharing focused on
states, supporters, and service providers.
October 22, 2020
We're doing a double-header this week folks! Please bear with us as our software has limitations: there will be some jumping to get the full story. Both people, and pieces, are chock full of different, complementary, info. We hope you enjoy.
Mindful About MEPs: Troy Tisue Talks Turkey About Something Old That’s New Again
Measuring Retirement: Taking Aim at Secure and Comfortable.
Troy Tisue, President,
TAG Resources
Dr. Alicia Munnell, Director, Boston College’s Center for Retirement Research
MEPs, PEPs and ARPs? We’re pleased this week to highlight one of the leading voices from this longstanding and emerging space. Troy Tisue is one of the industry’s top experts on both multiple employer plans and fiduciary outsourcing. In 2001, Troy Tisue co-founded TAG Resources to address the 401(k) product gap in the small

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If you haven’t met Dr. Alicia Munnell, you are missing out! Alicia H. Munnell is the Peter F. Drucker Professor of Management Sciences at Boston College’s Carroll School of Management. She also serves as the director of the Center for Retirement Research at Boston College. Before joining Boston College in 1997, Alicia Munnell was a member of the

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State Facilitated Retirement Programs -- The Latest
On a combined basis the three programs now serve over 177,000 savers, up 63% from year-end levels and up 17% since June 30. Employer registrations and progression continue to risk and are getting a tailwind from the CalSavers September 30 deadline for employers with 100+ employees and no plan. Assets are more than double their year-end levels. All figures are up from 9/30 to date.
Colorado (workforce 2.4 million) -- the Colorado Secure Savings Program Board held its inaugural meeting on October 13, focusing on orientation and organizing concepts. Treasurer Dave Young and two board members served on the study board that evaluated retirement security in Colorado, leading to 2020 legislation. The Board anticipates meeting frequently in the early period while it prepares to secure expertise and move toward implementation.
Connecticut (workforce 1.6 million). Meeting October 16, the full board of the Connecticut Retirement Security Authority considered a number of governance and logistical elements as they work toward an agreement with selected provider BNY Mellon/Sumday and the start of program implementation. An element of consideration that all state programs face is access to best quality employer data for purposes of engagement and measurement.
California (workforce 17.9 million). Also supported by a full board, CalSavers met October 19 reviewing current operations, program rollout, and investment performance. Action items included approval of a contract for investment consulting services: Meketa Investment Group, incumbent, was retained. The Board also considered alternatives to its current Capital Preservation structure, where by default the first $1,000 set aside by savers is invested in a money market fund. In the current (and anticipated) low interest rate environment, these funds are challenged to earn enough to meet and exceed operating costs. On October 14, the State of California provided its response to the suit filed and amended by the Howard Jarvis Taxpayer’s Association.
Maryland (workforce 2.9 million) – the Maryland$aves board is scheduled to meet October 28, 2020. Agenda and materials pending. Maryland$aves is expected to make a tentative contract award this month for program administration and investment management services. Maryland$aves issued its RFP for Program Administration and Investment Management March 5, 2020 with an April 30 deadline for proposals.
Virginia (workforce 3.8 million) – this week Virginia529 launched its public-facing website providing information on and engagement around its State-facilitated Private Retirement Plan Study, active under House Bill 775.
Measuring Retirement ... continued
President’s Council of Economic Advisers (1995-1997) and assistant secretary of the Treasury for economic policy (1993-1995). Previously, she spent 20 years at the Federal Reserve Bank of Boston (1973-1993), where she became senior vice president and director of research in 1984. She has published many articles, authored numerous books, and edited several volumes on tax policy, Social Security, public and private pensions, and productivity. She’s passionate about her work, and has seen a thing or two.

Alicia, you have interesting work and many resources for folks who are working in retirement security. Because it’s so timely, let’s start with the 2020 Presidential Candidate views on Social Security.

This is on the top of everybody's mind. I wrote a popular piece – let me summarize some of it. To begin, I would say that the President's proposal for Social Security is to allow people to defer their payroll taxes from the fourth quarter of this year to the first quarter of next year. This is an option that not many employers want because they do not want to have to explain it to their employees and then remind them in January that they're going to get a tax increase.

President Trump also occasionally says, ‘then we'll get rid of the payroll tax,’ which is not such a good idea because having an earmarked tax has really protected the Social Security program. If the program had to be subject to the vagaries of the annual budget process, people couldn’t be sure that their benefits were going to be there. In terms of Joe Biden, he has some proposals on Social Security. We know we have this long run shortfall and Biden’s proposals do a little bit in terms of improving benefits for the widows and widowers and a little bit for low income workers. And then there is a tax increase there that goes somewhat towards closing the gap between promised benefits and scheduled revenues.

Very interesting. What else are you seeing?

So it used to break down that Republicans were more interested in cutting benefits and Democrats in raising taxes. You don't really have that right now because the President, except for this notion of getting rid of the payroll tax, has really stayed clear of Social Security during the last four years. And he really hasn't said anything about how he would finance it going forward or what he would do for benefits. So one seems more realistic to me than the other.

Let’s talk a little bit about COVID-19. Can you share a little bit about what you're uncovering in your current work?

When the pandemic hit, we knew it was big, but we didn't know how it was going to affect people. And initially we saw this big drop in the stock market. So it seemed like we'd have a repeat of 2008-09, but then the stock market bounced back and the issue this time around is really unemployment. [Continued … Get the rest of this story here.]
Mindful About MEPs ... continued
business sector. He is the creator of The Open MEP® and the creator of many of the aggregated plan structures being offered throughout the country today. In our conversation we got the sense that Troy knows where most of the bodies are buried. Highlights below, and read our full chat here.

Troy – let’s dive right in. Do you think PEOs are an early map to MEPs coming out of the SECURE Act?

Yes, PEO MEPs really are the basis for the open MEPs, what we now call Pooled Employer Plans (PEPs) under the SECURE Act. The PEO model helps small businesses by outsourcing the things that you, as a small business, aren't able to put a deep focus on. You need to make widgets and that's where your profit lies. PEOs can step in and manage HR, benefits, and payroll. We had the good fortune of being the outsourced 401(k) for the outsourcers, the PEOs, in the early days. 

Recently you talked about how SECURE Act MEPs might impact the retirement environment. What do you see?

Well, I think “impact the environment” is really an understatement. I believed back in 2011 that every small business considering a retirement plan or switching provider would at least see a proposal for an open MEP. [Continued … Get the rest of this story here.]
Grant's Best Practices: 5 Tips for Great Stakeholder Communication
Using communications to make transparency and responsiveness a part of your brand will foster trust and understanding essential for building productive long-term relationships. Let’s talk about what makes for effective and transparent communications.

1. Plan, plan - when you can

Not all communication can be planned in advance. Immediate and emerging issues – inquiries from the media and stakeholders or the introduction of unanticipated state or federal legislative or regulatory proposals – often require reactive responses.  
 
For the things that are known in advance, however, planning ahead limits the likelihood of missed opportunities and allows time for thoughtful develop…  [continued - read on here.]
Cool Stuff You Want to Check Out.
The Aspen Institute this week published its 2020 Aspen Leadership Forum on Retirement Savings Rapporteur’s Report. Don’t miss this piece. Key takeaways: a set of four design principles essential to creating a more robust, inclusive and practical retirement savings ecosystem for Americans:
  1. Provide universal access to automatic enrollment in workplace retirement savings.
  2. Help workers build liquid emergency savings alongside their retirement savings.
  3. Make retirement savings portable.
  4. Innovate to create lifetime income streams for everyone.
 
DCIIA’s new white papers on HSA’s -- The HSA: The “S” is for Savings (not Spending!), Part I and Part II. Part I provides an overview of health savings accounts (HSAs) and explores the benefits and current challenges of offering HSAs to employees. Part II explores best practices for utilization of the HSA as part of a robust retirement strategy. Access the papers in DCIIA’s Resource Library (access may require membership).
Mercer and the CFA Institute published the Global Pension Index 2020 – the US is getting a C+, by the way. Global issues of interest include aging populations, low interest rates, high government debt, differential impact of the pandemic on women and “other subgroups”, the growing use of defined contribution plans, and the “lack of private pension coverage and any saving for retirement by many workers in both developed and developing economies.”
Morningstar: The Morningstar policy team just released new research on baby bonds we thought you might find interesting. It has an important connection to retirement savings, college savings, and closing the racial wealth gap. Shortcut – Aron Szapiro says, “Exhibit 2 is really the punchline, but we wrote another 8,000 words to explain how we got there.”

NAST: Check out their new website on financial wellness. Resources include an Audience Guide and Speaker’s Kit, Conference in a Box, a Legislative Toolkit aimed at financial education graduation requirements, and a Financial Wellness Census map to show how your part of the US stacks up.

NEST’s new briefing paper on Emergency Savings – a hot topic in the US and around the world. This piece highlights avenues that could be explored to ensure effective operation of sidecar or sidecar-like models (English spelling retained, just for fun):
  • Using an automatic enrolment mechanism to encourage employees to use the savings tool
  • Building emergency saving into pension auto enrolment policy
  • Providing financial incentives to save for emergencies
  • Boosting market supply capacity to support adoption
  • Optimizing the hybrid savings tool design by expanding the number of pots to include goal-based saving and/or precautionary saving to cover the possibility of a sustained loss of income.
We know in this month of Retirement Security we’ve missed other good work – want to make sure we share it? Drop us a note with your suggestions.
... Are you still sitting? Jump up and stretch for Pix of the Week!
Let’s get you outside for a few minutes. Alicia says: the present is ok with COVID in Vermont. The future, I hope, means lunch in Paris.
We agree – we want lunch in Paris! And who is that handsome gentleman at your table?
You may take your entertainment in other forms. If these snappies don’t whisk you back to summer, we don’t know what will. Thank you to Troy T. and his beautiful family for taking us out to the ballpark, the pool, and the fields of early autumn.
Troy, wethinks you are outnumbered! But in excellent company.
While we’re being active, here’s one more piece. Some of you are good and tired of hearing about marathoning. Do not click here. For the rest of you, click there for a little story on how to stretch a two hour event to six-and-a-half hours of sheer delight. And raise some money at the same time.
OK, that's a wrap. Thank you for joining us! ❤

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RESOURCES
Looking for another 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, managed by 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.

We talked recently with the articulate, thoughtful Delaware State Treasurer Colleen Davis about the issues facing state treasurers today, including retirement security. We're pleased to be of support. Watch this space for more information and a link.