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RETIREMENT SECURITY MATTERS
A forum for retirement innovation information sharing
focused on states, supporters, and service providers.
Vol 89 | November 30, 2023
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Greetings! Lisa, welcome to Retirement Security Matters – where we talk about retirement readiness innovation by states, supporters, and service providers. | |
As autumn transitions to winter, join us in a few moments of retirement savings innovation that will carry us through the season. We've got news for November into December, so get comfy, grab that mulled cider, and read on:
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Colorado Secure Savings: Off & Running with Young and Railey
- Fresssssh state metrics - just for you
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Updates from states - CA CO CT IL ME MD OR VA NJ NY and DE!
- In the News: (How) Do Auto IRAs Affect Participation & New Plans?
- We got Hot Sauce / Cool Stuff, and
- … Pix of the Week, where we keep the running theme alive.
| 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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Colorado Secure Savings: Off and Running
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(Colorado Treasurer Dave Young with CSSP Executive Director Hunter Railey) | |
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Treasurer Young, when we spoke for RSM April of 2020, your bill for a Colorado secure savings program had just been introduced. Where are you now?
Treas. Dave Young: Well, we have covered a lot of ground since then. We did get the bill passed, as you know. And I have jumped through a lot of hoops and over a lot of hurdles to get to where we are today – with a smoothly operating Colorado Secure Savings program.
An important early decision was the selection of our program director. We're honored to have Hunter Railey in that role with us since 2021. We've also focused on a lot of policy work with our board.
Finally, you've seen a lot of discussion about state partnerships, which were allowed in the legislation. As you know, we have signed an agreement with Maine to join us as a partner. And they began to enroll businesses and savers in Maine this week. So -- a lot of activity since April 2020.
Hunter, what are you focusing on now in 2023, recognizing that Colorado is a big state, and you've got a lot to do.
Hunter Railey: Yes, the work seems to keep expanding.
Internally we've been focused on getting a handle on the compliance data, figuring out who we have reached, and who we have not. We are working to make sure we're getting in front of those folks before enforcement begins, which is set to start in March of next year. This is probably not news to anyone working in the programs, but state data is a little clunky at the outset.
We have another implementation wave that begins in January of next year. Along with that we are rethinking our outreach and marketing strategies. We now have a good amount of enrollment data. That allows us to think about how we can adjust our strategies going into 2024. I'll take a moment to extend my thanks to our team members Anna Stevens and Daniela Liebovici for the program management and communications work they are doing here.
Treasurer Young, why are Auto IRA partnerships important?
Well we know that there are states that may not have enough savers to stand up a program on their own and have the fee structure really work for them. Based on our fund manager contracts, the more assets under management we have, the better price breaks we get. Not only does that lower fee structure benefit partner states -- it also helps [... this piece is continued, here! don't miss the additional nuggets.]
Thank you, Treasurer Young and Hunter for sharing your experience and insights with us. We can’t wait to see what’s coming next in Colorado.
Get to know these two a little bit better:
Dave Young is a native Coloradan who started his career as an educator, teaching math, science, and technology at Heath Junior High in Greeley for 24 years. He then went on to teach at CU Denver for another decade, and worked in the private tech sector for about four years. Dave decided to run for public office because of the challenges his sister faces as a person with disabilities. In 2011, he was elected to the Colorado House of Representatives and in 2014, he was appointed to Colorado’s Joint Budget Committee. Dave was sworn in as State Treasurer in 2019. He has spearheaded several economic justice initiatives, including Colorado SecureSavings and the CLIMBER Loan Program. He was reelected for a second term in 2022. Dave is married to State Representative Mary Young, Ph.D. Dave’s sister lives in Pueblo.
As director of the Colorado Secure Saving Program, Hunter Railey works with his board to oversee all aspects of the Program, including design, structure, governance, operations, partnerships, and marketing. In this role, Mr. Railey spearheaded the development of a multistate governance framework that is now the Partnership for a Dignified Retirement and serves as its founding chairman. Before joining the Colorado Department of the Treasury, Hunter served as Colorado Director for Small Business Majority, a small business advocacy and research nonprofit.
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*Fresh!* State Auto IRA Program Metrics | |
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What’s up! Assets continue to 'bop around' just under the $1 billion mark for the consolidated Auto IRAs. We think we are blasting through next month as November figures roll in, though. Stay tuned. Funded accounts and facilitating employers continue to rise.
Assets. Currently at $990.5 million, assets are up 54% since year end 2022 and 2.4x where they were at the end of 2021. 62% of these assets are in the CalSavers program. Oregon makes up 21%, Illinois 13%, and the balance of the states make up the difference.
Funded accounts. Are just under 785,000 - up 24% for the year, and 1.8x their 2021 year end levels. The average account balance is over $1,250 with many accounts having both much larger and much smaller individual balances. On average however, this is a sum 3x the level half of Americans could not rustle up in the famous Atlantic Monthly article of 2015. One figure not included in our recap above is the level of withdrawals from accounts - currently running at about 20% of total contributions in several programs.
Facilitating employers. Over 62,000 employers are facilitating payroll deductions into a state Auto IRA program, with another 130,000 or so in the pipeline. States are gently stepping into the enforcement space, as you'll see below, to ensure covered workers are actually being given the opportunity to save.
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State Facilitated Retirement Programs - Fresh Highlights | |
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California (workforce 17.9 million) – The CalSavers board met November 13 with an agenda covering program progress, a re-up for investment consultant Meketa (two years with a one-year extension possible), and a focus on compliance activity. As of October 31, CalSavers is serving about 463,000 funded accounts aggregating $614 million in assets. More than 45,000 employers are facilitating program participation. Another 75,000 have registered to facilitate and are part of the pipeline.
At the same time a meaningful number of employers who appear to be covered under the program have not completed one or more of the three facilitation steps (register, upload roster, facilitate deductions). Enforcement activities are carried out by the state’s Franchise Tax Board. In its latest set of proposed rules, CalSavers seeks to refine its definition of non-compliance to mean the failure of an eligible employer to allow eligible employees to participate in the program.
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Colorado (workforce 3.2 million) – don’t miss our Colorado highlights in the focus piece this edition, featuring Treasurer Dave Young and Executive Director Hunter Railey. Formal metrics reporting hasn’t yet started for this program, but at the one year mark they are now serving more than 40,000 funded accounts in the state; savers have accumulated more than $20 million.
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Illinois (workforce 6.4 million) – Illinois Secure Choice’s Board met November 15. On the agenda: updates related to program progress and enforcement, scheduled to begin in February of 2024. November 1 was the deadline for covered employers with 5-15 employees to register (Wave 5). Ahead of this year’s deadline and as of October 31 the program was serving about 133,000 funded accounts aggregating to $130 million in assets, facilitated by 5,900 employers. Another 17,000 have registered to facilitate.
Program administrator Ascensus noted for the Board that at deadline, 69% of Wave 5 employers had registered to facilitate the program. Enforcement activity is proceeding steadily – the program notes that recent activity has encouraged over 325 employers to begin facilitating – for the benefit of over 2,000 covered employees, a subset of which have saved an aggregate $2 million in their retirement accounts.
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Maine (workforce 677,000) – *Celebrate*! - The MERIT program reports this week: “The first Maine employers are registered with MERIT and soon the first employees will commence contributing to their accounts.” For more about the program’s pilot and launch, check out this news piece, including video reporting. Maine's rollout is structured in two waves tailored to business size, with enrollment deadlines at April 30 (15+ EEs) and June 30 (5+ EEs).
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Maryland (workforce 3.2 million) – Maryland’s Board last met on September 23, and meets again on December 6 of this year. At about the one year mark, Maryland$aves is serving just under 4,900 savers aggregating about $3.7 million in assets. While organized as an Auto IRA with an employer requirement, to date Maryland has focused its efforts on incentives to attract employers and the development of funded accounts is progressing more slowly.
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Oregon (workforce 1.9 million) – The OregonSaves board met November 14, welcoming both two new Board members and two new staffers. The program marks two important deadlines this year – for employers with three or more employees (March 1, 2023), and for employers with one or more employees (July 31). Program administrator Vestwell noted that those two waves encompassed 18,000 and 38,000 employers, respectively. Consultant Sellwood commented that program contributions (net inflows) are at an all-time high and that enrolled, funded new accounts are up significantly due to Wave 6. These results may be more visible in the November 30 report than they are for the period ended October 31.
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Virginia (workforce 4.3 million) – RetirePath Virginia continues its rollout – with a first deadline in September 2023 and a final deadline in February 2024 for covered employers with 25+ employees. Check out the latest, here.
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Delaware (workforce 499,000) – Treasurer Colleen Davis, Ted Griffith and the team are steadily moving the Delaware EARNS program forward. Connect to the latest public meeting material here – and check out our piece from earlier this month here.
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New Jersey (workforce 4.4 million) – New Jersey’s RetireReady program continues to move forward under the able hand of its Executive Director, Todd Hassler. You can find the most recent program information here, and board materials here.
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New York (workforce 9.2 million) – ICYMI and keeping you current – you can check out the materials, and the meeting video, of the Secure Choice Savings Program Board’s September 27 meeting here.
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C O M I N G U P
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Maryland (workforce 3.2 million) – The next meeting of the Maryland$aves Board is scheduled for December 4, 2023.
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Massachusetts (workforce 3.6 million) - The next meeting is tentatively scheduled for December 21, 2023.
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Oregon (workforce 2.2 million) – The next meeting of the OregonSaves Board is scheduled for December 20, 2024.
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Thank you to our friends at OregonSaves, who brought this to our attention. It’s a can’t miss.
The Center for Financial Security at the University of Wisconsin-Madison with Dr. Ngoc Dao of Kean University has just published a new report, Does a Requirement to Offer Retirement Plans Help Low-Income Workers Save for Retirement? An Early Evidence from the OregonSaves Program.
From the report: early results show that the program led to a meaningfully higher probability of both IRA participation, and in the likelihood of having a retirement plan offered at work. Retirement savings participation by women and non-white subgroups, and those with lower incomes and education were even higher than the average gains across the entire population.
There’s some detail here, but dive in on page 6 and again in Section 4 and see if you read these results the same way. Dr. Dao’s goal has been to build forward from existing studies to measure the impact of OregonSaves on IRA adoption rates in the state compared to rates prior to the program’s implementation, and also to assess the change in availability of retirement plans at working following program launch.
We’ll admit it, this report is a bit technical and will probably only be popcorn reading for our research friends. Check it out for yourself and tell us what you think.
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A curation of a few things you won’t want to miss this week.
We don’t know why, but our inbox is full of research on older workers and work - especially around return to work. So we have to ask - are older and senior return-to-workers good for us and the economy, bad for us and the economy - what gives?
A multitude of new studies look at this conundrum in different ways.
One. Unpaid productive activities during the retirement process - does going back to work have a negative effect on the community and families? The Dutch want to know.
Two. … but does returning to work lead to depression? Probably depends on the reason for your return to work, but our friends in Japan are checking on it for us in The health consequences of returning to work after retirement: Evidence from a Japanese longitudinal survey. Here’s another thoughtful piece indicating that retirement is good for mental health.
Three. … and what do we know about impact on employers – here in the US, Boston College’s Center for Retirement Research asks Are Older Workers Good for Business? Hint: it’s not yes or no.
Four. and what about The Meaning of Work for Post-Retirement Employment Decisions? And here we’ll thank a research team focusing on data from Germany to help us think through the ways social, personal, financial and generative factors influence our decisions to return to work - and possibly the success of those decisions.
OK THAT’S ENOUGH ABOUT WORK. Good grief, it’s the season between Thanksgiving, Hanukkah, Christmas and the New Year - give us some joy here!
Reading the Presidents. Not sure this will be joyful, but we’ve made it to #36 (LBJ) by accidentally skipping #35 (JFK). Many. of. you. have recommended that we read Master of the Senate by Robert Caro. None of you mentioned that it’s book 3 of a 4-book series on Lyndon Baines Johnson. So here we are, just having finished The Path to Power, reading our way through Means of Ascent. And when we say “read”, we mean “listen to audiobook.” Our math tells us we’ll be wrapping up book four after some 102 hours. #thankyoumichael The good news - it’s riveting.
Pets, pets on the internet. If you like salty dogs, this one’s for you. In our defense, our mother recommended this to us. Just sayin.
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We need some Pix of the Week! | |
Are you ready for the holidays? Because based on this view, we think Costco is … | |
Before that happened, this happened, which is why you won’t be seeing us in New York this week: | |
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We agree. Not a good look. Next time we focus on sprint training we’re going to do more stretching. 👟 We can think of worse places to recuperate though.
We hope you had a terrific Thanksgiving with folks you like and love.
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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 Defined Contribution Institutional Investment Association (DCIIA) is dedicated to enhancing the retirement security of America’s workers. To do this, DCIIA fosters a dialogue among the leaders of the defined contribution community who are passionate about improving defined contribution outcomes. DCIIA's site provides a range of public and member-specific resources.
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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