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RETIREMENT SECURITY MATTERS
A forum for retirement innovation information sharing focused on
states, supporters, and service providers.
Vol 56 | June 9, 2022
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Greetings! Lisa, welcome to Retirement Security Matters – where we talk about retirement readiness innovation by the public sector, private sector, and policy organizations. | |
You might be enjoying graduation season with family and friends -- we have been. It's a great time to get inspired by thoughts of what can be. So grab your iced coffee. Let's catch you up on in the world of retirement security and sharpen your focus:
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Peg Creonte and Scott Parry: Ascensus on Auto IRAs in 2022
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State metrics – we’ve got the latest as May figures are rolling in
- Updates from California, Colorado, Connecticut, Illinois, New Jersey, New Mexico, Oregon, Virginia, and Pennsylvania.
- Joel Metlen wants to shake the status quo - you too?
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Hot Sauce! … our research friends focus on which small business may be more likely to offer retirement plans and a lot more. And we put our ears to the ground.
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And just for you, we've got boats and robes in our PIX of the Week!
| Comments or content suggestions? We welcome both. Have something about your program you’d like to share? We are all ears. | |
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RSM wants your support! Be seen here.
Click for more information and rates.
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Next Generation: Ascensus puts its experience to work | |
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Peg Creonte, President (left) and Scott Parry, SVP (right),
Ascensus Government Savings
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A long-time friend of State Auto IRAs, Peg Creonte is responsible for setting the vision and strategy for Government Savings at Ascensus and charting its course for future growth. Peg joined the company in 2004 and has served in leadership roles across business development, platform development, and system implementation. Scott Parry recently joined Ascensus from Citizens Bank where he led digital transformation initiatives for Citizens Wealth following roles as General Manager of Ameritrade Retirement Services, CEO of Aon Hewitt Financial Advisors, General Manager of FIS Retirement Solutions, and President of Reliance Trust. We share a “close connections” note with you – our founder Lisa Massena worked for Peg at Ascensus in 2018 and 2019. It is a small industry, friends!
We think you’ll like this fresh perspective. This is an excerpt. The full piece can be found here.
Peg, you’ve been involved in the Auto IRA space since before the first program went live. What do you like about what you see today?
Peg: I would say the most exciting thing as someone who's been involved since 2016 is the proliferation of programs, legislation, and studies. I remember when we were all sitting around a conference table talking about this idea, we all really believed it could move the needle on retirement savings. And it's just so exciting to see it come true.
Scott, you are new to Auto IRAs. What do you think we should be paying attention to as this space continues to mature?
Scott: Early on the process has been focused on working with employers to help them become aware, answer their questions, and get them registered, and to help their employees sign up. If we’re successful, eventually, we're going to have a lot of savers.
Those savers will need some help beyond just having an account. In a prior role, I ran the Financial Wellness Center for a large 401(k) provider. Using financial education and wellness programs, we were helping people think through the financial tight spots and keeping them focused on their goals for the future so that they could create balance and give some priority to each. I could see more support coming to this space as it “grows up.”
Peg, can you share some of what you’re learning as you work with CalSavers, as we noted likely to be the largest single Auto IRA, through their June 30 deadline for small employers?
Peg: We learn something new every week in this business. It's a brand-new industry where we're thinking ahead, responding and adjusting together continuously. The sheer scale of California accelerates that learning.
For our clients, we are the face of their program through our servicing organization. We take that incredibly seriously. Anytime we are administering a program with deadlines for thousands of employers, we carefully consider anticipated service volumes. We plan for that and execute to that plan so that those initial touchpoints with the program, should they come in through our call center, is a positive experience. Certainly, the scale that California has helped us to get really good at that. And both the CalSavers and Illinois teams have been terrific partners in working through these rollout strategies together, which we appreciate.
Scott, we know Ascensus has been cooking up some good stuff. Can you talk about any of your recent innovations for Auto IRA?
Scott: Yes, there are! As a first mover, it’s important to keep our offering fresh. Along these lines we've invested significantly over the last several months completely renewing our employer experience. This includes the registration process, and our payroll integration functions – to keep it simple for employers, these are very important.
But wait! You’ll get the rest of the scoop from Peg and Scott here.
Thank you both! We appreciate your reelections, insights, and latest innovations. Want more? Folks, you can connect with Peg Creonte via email and on LinkedIn. You can also connect with Scott Parry by email and on LinkedIn. You can also follow Ascensus’ government, retirement, and health savings work at ascensus.com or on LinkedIn.
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*Fresh!* State Auto IRA Program Metrics | |
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What we see: May figures are rolling in. Programs continue to experience steady growth -- and we are also seeing the impact of 2022 investment markets still under pressure.
Highlights: Across the three programs, we now see over 481,000 funded accounts. For comparison, funded accounts are up 12% year to date, up 1.8x since December 2020 and up about 4.4x since December 2019. Not bad, states.
Over 80,000 employers are now registered to facilitate a state Auto IRA program and more than 23,000 have begun facilitating payroll deductions.
For the first time in our reporting, the average account balances picture is slightly different. Total assets are up 12% year-to-date and 2.8x since December 2020. However, most asset classes have experienced net declines in value, slowing the average account balance growth we’ve seen to date. Average account balances remain over $940. Note - new account growth in the very large California program will also temporarily depress these numbers as new savers (with smaller account balances) come into the retirement savings system.
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State Facilitated Retirement Programs - Fresh Highlights | |
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California (workforce 19 million) – The CalSavers Retirement Savings Board met May 24, 2022. Key items on the agenda included a summary report from Executive Director Katie Selenski on program participation and funding as of April 30, 2022; a report from program administrator Ascensus; and an investment performance report by Meketa Investment Group. The board took a number of actions, including: the approval to award ESG asset management to Calvert Research and Management; confirmation of the treatment of participants holding assets in the existing ESG fund; and extension of contract with AKF Consulting for general consulting Services. The CalSavers Board issued an RFP for audit services; responses are due June 24, 2022. To support instate operations, CalSavers has expanded its Treasury staff to a team of ten.
The program notes that, as the June 30 employer deadline approaches, registrations are picking up quickly. Over 13,000 employers registered in May, representing a 30% increase in the total registered employer count.
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Colorado (workforce 3.2 million) – The Colorado Secure Savings Program Board also met on May 24, 2022. Director Hunter Railey and team provided updates on outreach and marketing strategy, the New Mexico Work & $ave partnership, program rulemaking and on employer data acquisition. Provider Vestwell also made its introductory presentation as the program administrator.
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Connecticut (workforce 1.8 million) – The Connecticut Retirement Security Authority met on May 20, 2022. Key items on the agenda included a discussion of a recent short-notice legislative change which makes the CRSA an advisory body and moves official authority for the MyCTSavings into the Comptroller’s Office. There was some debate by the board about the implications of this transition. RSM will take a moment to note that this structure puts the program squarely into a state agency, which is more similar to the placement of most other Auto IRA programs and which, in our opinion, could potentially expand resourcing to the program over time.
Also included on the agenda was an update from program administrator Vestwell on employer program communications and progress – with 100 employers registered and 16 submitting payroll. Employee participants have already saved about $30,000. (It's early days! We well remember the importance of every first account and dollar in).
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Illinois (workforce 6.2 million) - The Illinois Secure Choice Board met on May 19, 2022. Key items on the agenda included introduction of new team members and highlights of the program’s quarterly report, including outreach, marketing and an investment review. A range of resolutions included: annual approval of Board insurance policy renewal, approval of investment policy statement, and for consultant services. The Board approved issuance of an RFP for investment consulting services. Questions are due June 15, 2022, and bids are due June 22, 2022. You can get your copy of the RFP here.
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New Jersey (workforce 4.4 million) – *Executive Director Opportunity* The New Jersey Secure Choice Savings Program Board has selected EFL Associates for ED search. View position description here.
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New Mexico (workforce 1 million) – The New Mexico State Treasurer’s Office issued a RFQ seeking quotes from qualified firms to provide professional consulting services to the New Mexico Work and $ave Board for the development of a comprehensive communications, marketing, and outreach strategic plan. Responses are due today June 9, 2022. You can get your copy of the RFP here.
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Oregon (workforce 2.1 million) - The OregonSaves Board met on May 17, 2022. Executive Director Michael Parker provided a program update -- materials can be requested directly from the Oregon team -- followed by Vestwell's program administration update. This quarter assets are up over $3.8 million, the average account balance is just slightly up, contributions are up over $3 million and distributions are close to $2 million, creating net positive cash flows of $1 million. Sellwood Consulting provided the board's quarterly investment performance report.
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Virginia (workforce 4.2 million) - The Virginia529 Retirement Program Advisory Committee has just announced its selection Vestwell as the RetirePath Virginia program administrator, and BlackRock as the program's investment manager.
“There’s a monumental shift happening in the retirement industry. We’re seeing more and more states playing a central role in closing the retirement savings gap across the country. We’re proud to partner with states like Virginia who are pioneering the way small businesses and their employees will achieve a secure financial future,” said Aaron Schumm, Vestwell's founder and CEO. For more, see the related press release and coverage by National Association of Plan Advisors (NAPA) and Pensions & Investments (subscription may be needed to view this piece).
Virginia's pilot program is scheduled to begin in early 2023 and phased enrollment will start by July 1, 2023.
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Pennsylvania (workforce 6.2 million) – Pennsylvania’s retirement savings bill is still waiting to be heard by the House Commerce Committee. The Pew Charitable Trusts’ John Scott recently joined Treasurer Stacy Garrity and AARP’s senior retirement savings legislative representative, Jessica Eckman, in a panel discussion raising awareness on the expected beneficial impact of the proposed program for the state's workforce and taxpayers.
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C O M I N G U P
Join where you’d like, and count on us to follow these meetings for you:
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California (workforce 19.0 million) –The next meeting of the CalSavers Board is scheduled for August 22, 2022.
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Oregon (workforce 2.1 million) – The next meeting of the OregonSaves Board is scheduled for August 30, 2022.
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Maryland (workforce 3.1 million) – The next meeting of the Maryland$aves Board is scheduled for September 12, 2022.
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In my work, I talk to a lot of people about the challenges they, their families, and communities are facing. Housing, transportation, and behavioral health resources top some of our local lists.
For all families inflation is pushing up the cost of everyday living. Very simply, there are a lot of people out there who aren’t getting what they and their families need to support their whole well-being.
Often, these issues disproportionately impact specific communities and people.
Addressing systemic inequities is incredibly hard. You’re essentially fighting the status quo, and the status quo will reassert itself at every turn. Passive resistance can be as challenging as active opposition. Are you working to change something important? Here are a few lessons from my own experience:
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As a program or service provider there are times when our approach speaks in ways that don’t help us address system challenges. This may be when materials are only provided in English, when no one thinks to include accessible options for people with disabilities, or when we neglect to reach out to the communities most impacted by the change or program we are working on.
These may seem like small things, but when you add them up, over and over, in every different area of people’s lives, you start to see how these become systemic barriers that keep people from getting what they need and why it’s so important to push for change at all levels.
In a spirit of change, Keep up your important work! / - Joel
Columnist and Senior Associate Joel Metlen is based in Oregon. Joel is a pioneer of the state facilitated retirement savings space, woven into a career of public service and innovation. At OregonSaves, Joel’s responsibilities ranged from marketing and employer engagement to operations and data analysis. You’ll see his insights from that experience, and more, here.
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We are going to exercise some restraint and not share *everything great* that has crossed our desk since mid-May. But here, here, is some really good stuff.
Our friends at EBRI have some new research on 55-to-80-year-old retirees – how are they making financial decisions and what would they tell their younger selves? Find out for yourself on Wednesday, June 22. Webinar open to all.
The Wharton Pension Research Council and John Sabelhaus have published a new working paper: The Current State of U.S. Workplace Retirement Plan Coverage. This one touches on federal and state initiatives to increase access – think State Auto IRAs – and has a few technical touches. And we quote: This paper describes a method for estimating current workplace retirement plan coverage rates by age, race and ethnicity, education, gender, employer size, and earnings levels across U.S. states using data from the Current Population Survey, IRS Statistics of Income, and Survey of Consumer Finances.
If, like us, you’ve been wondering “Why Do Some Small Businesses Offer Retirement Plans?” – staunch your curiosity here. This special report from Boston College’s Center for Retirement Research aims to identify the characteristics of sponsoring firms and their employees to determine which small businesses may be more likely to offer a retirement plan in the future. There’s a shortcut visual on page 10 of the report, but you’ll want to read the whole thing to get a more complete view.
In our ears: So worth it. A little something for everyone:
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From the Georgetown Center for Retirement Initiatives: Chad Parks, Founder and CEO of Ubiquity Retirement + Savings, explains why he supports new state-facilitated retirement savings programs, how fintech firms are responding to recent reforms, innovations to cost-effectively serve the small business market and what to expect from the industry in the future.
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And … if you find yourself flitting all over the place mentally, you may need to practice Deep Work. Cal Newport, 2016. It feels like an oldie but a goodie. The fact that we think 2016 was decades ago may be telling.
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... It's time for some PIX! | |
Sometimes when you’re having fun, it’s because you’re finally able to go to a conference and have in-person time with people you appreciate. Well ❤️ Hello, Peg Creonte and Fernando Diaz! Spotted at NAST TMTS in San Antonio this week. | |
… and sometimes you are having fun it's because you’re with your wife, Priscilla, on your honeymoon in Tuscany, pre-pandemic. Well ❤️ Hello, Scott! | | |
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… or you might be racing your sailboat near your hometown of Mystic, Connecticut.
That's good fun.
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Or you might be playing in your band, Wooly Mammoth.
Thank you for sharing, Scott! We think it’s time for a concert 🎵.
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There is one more way we had fun this last week. If you were on Instagram, Facebook, or LinkedIn, you probably saw this Proud Mama post. We did it! 🏆 So long, High School. Four More Years now has a fresh new meaning. | |
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That’s it for this edition. ❤️ Hug your people and change the world.
If you like this piece, please stick with us. We’ll be back in about two weeks. If you don’t like it, please unsubscribe below. Comments for us? Please let us know. Want your own subscription? Request one here. All information shared is from public sources or used with express permission.
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Massena Associates provides process, policy, and implementation consulting on retirement savings programs and products.
Our clientele includes public entities, 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.
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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.
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