Illustrious Illinois: Three Years In, Expanding Access

I’ve been working on Secure Choice with the Treasurer's Office for nearly six years and before that I had the opportunity to work on the program’s enacting legislation. At that time I was the policy director for Woodstock Institute. We were one of the organizations that championed Secure Choice with the Illinois General Assembly. I worked closely with our bill sponsors and helped get the bill across the finish line.

What we've learned since our initial legislation is that these programs aren't really a burden on any employer regardless of their size. (don't miss the rest, here!).

Thank you so much for sharing your expertise with us Courtney! Want more? You can connect directly with Courtney Eccles here. You can follow Courtney’s work at Illinois Secure Choice and connect with the program on Twitter, Facebook, and LinkedIn.

What is up! These figures reflect June 30 data for Illinois and California, May 31 for Oregon. Assets are up about 70% year to date and $20 million since our last report, at $270 million. Funded accounts are over 357,000 savers – up 36% year to date and a little less than 2-1/2 times where they were a year ago. Average account balances are at $756. Recall that this includes many new accounts. Average contributions in each of the programs are ranging from $114-$143 a month.

Employer facilitation figures are up. Across the three programs, nearly 36,000 employers have now registered to facilitate. 14,600 have started payroll deductions for their employee savers. The number of new facilitating employers has grown by two-thirds since June 2020, and by 28% since the start of 2021. Employee opt out rates are running at about 32%, with participation rates at 68%. Opt outs have been trending gradually but consistently lower.

Connecticut (workforce 1.6 million) – The Program Design and Investment Committee of the Connecticut Retirement Security Authority was scheduled to meet July 1, 2021. The agenda included a discussion of options for scheduling launch “waves.” After considering the merits of starting with the state’s largest or smallest employers, the Committee elected to execute three waves over the January 2022 to January 2023 period beginning with larger employers. 

Illinois (workforce 6.2 million) – As referenced in our thought leader feature, a legislative proposal to expand the Illinois Secure Choice Retirement Savings Program to include businesses with at least 5 employees was sent to the Governor on June 23 with signature expected. This will extend workplace-based retirement savings cover in the state significantly. The current lower boundary for the program is 25 or more employees.

Maine (workforce .7 million) – Maine became the latest state to pass retirement security legislation as Governor Janet Mills signed SP515 / LD1622 into law on June 23, 2021. The program is accompanied by a funding allocation of $1.6 million and will be staffed by the office of Treasurer Henry Beck. Next, Maine will begin appointing members to its 9-person board.

Maryland (workforce 2.9 million) – continues negotiations with provisionally-selected providers following its 2020 RFP for Program Administration and Investment Management services.

New Jersey (workforce 4 million) – in its 2021 budget, New Jersey allocated $250,000 toward the New Jersey Secure Choice Savings Program led by Treasury (see page B-191). As previously noted, NJ started appointing Board Members early in 2020 but paused during the pandemic. The program’s legislation called for a start date of March 2021 with a possible 12 month extension to March 2022. Employment law and other counsel in the state are starting to inform their clients about the pending program.

Virginia (workforce 4.3 million) – The Virginia529 program has announced its search for a Retirement Program Director for the new state-facilitated retirement savings program scheduled to launch in 2023. 

This is just a sampling of some of the research findings to date, and the good news is that there is plenty more still in the works, as states continue to gather larger data sets and more programs get up and running. This information is also helping facilitate better informed discussions about retirement policy in states around the country as well as at the federal level. I for one am excited to keep seeing the results and learning new insights, so that we can figure out the best ways to help more and more folks save.

More to Follow! / 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.

Here’s some important new research from Craig Copeland and Lisa Greenwald for EBRI. Among other findings: Black and Hispanic Americans reported disproportionately lower financial resources, and how they feel about retirement and financial security is clearly impacted by having less resources. Still, there are some modifications in the financial system that could help improve their prospects, including access to workplace retirement savings plans that provide one-on-one, personalized advice that builds on their comfort with having a connection to those providing them advice. We would suggest that simply having workplace-based access to retirement savings is a great start for many.

We’re not tax experts, but this caught our eye last week: New Jersey Governor Signs Law Providing Partial Pension, Retirement Income Exclusion for Taxpayers. You may need a subscription to read the whole thing, but you get the idea. Are these exclusions common? We don’t think so. Here’s a longer piece from AARP that includes this and other retiree-friendly inclusions in the Governor Murphy-approved FY2022 budget.

Coming across our desk in this week’s Plan Sponsor Newsdash: On this day in 1983, the U.S. Supreme Court ruled that retirement plans could not pay women smaller monthly payments solely because of their gender. 1983!

And finally, this one from Nationwide’s 2021 Social Security Survey – check out slide 5 – we Americans need more exposure to important elements of Social Security that affect us. “Majorities Feel Knowledgeable About Certain Aspects of Social Security” “But When Tested About Specifics, Clear Gaps in Knowledge Exist” and “Only About Half Know Exactly How To Maximize Their SS Benefits”. The piece provides insights about where folks are getting their information today, but stops short of making recommendations for future improvement.

We’re listening to: This week we are panic-training for a half marathon in the hilly wine country of Oregon. Naturally we need something spicy to make the training runs fun. We picked Alec Baldwin and you’ll want to listen to both of these. We loved listening to Dr. Odette Hall’s upbeat take on life and work in Pandemic Stories of Work, Loss, and Reconnection. And for some fun and insight into the Wentworth-Stephanopoulos family, ya gotta have Ali Wentworth Makes Alec Laugh.

And, in closing a SHOUT-OUT to all of our friends in IT.

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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.

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.