A forum for retirement innovation information sharing focused on
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Vol 24 | February 11, 2021

The First Fifteen Years: Time Flies for Auto IRAs  
David C. John of AARP's Public Policy Institute and the Brookings Institution's Retirement Security Project
Smart experts have done a lot of deep creative thinking about the topic of retirement coverage and related financial security here in the US.

One of those experts is David John, Senior Strategic Policy Advisor for AARP’s Public Policy Institute and Non-Resident Senior Fellow and Deputy Director for the Retirement Security Project of the Brookings Institution.

If you know David, you know what a thoughtful, self-deprecating, and funny guy he is. Our timing for this chat was excellent 🥂 as you’re about to see.
David, you were an early advocate of universal workplace saving for retirement. We also call these programs Auto IRAs, and Secure Choice. Tell us a little bit about how this initiative got started; we think it has a pretty interesting history.

Well, at the time I was at the Heritage Foundation and Mark Iwry was (and is again) at the Brookings Institution. The two of us were invited to testify before Congress and also to speak at conferences with the idea that we would take opposite positions and provide entertainment while speaking.

Mark and I discovered that we actually agreed on far more than we disagreed on. 
At one of the conferences, we were backstage talking and we started to come up with what became the Automatic IRA. After extensive drafting and redrafting and talking to a wide number of people, we unveiled the Auto IRA on February 14th, exactly 15 years ago on Valentine’s Day, in the Heritage Foundation's auditorium. We had speakers from both liberal and conservative perspectives. And we immediately had a bipartisan co-sponsorship for legislation in both the House and the Senate. The key sponsor was Richard Neal who was then just a member of the House Ways and Means Committee. (Representative Neal is now the Chairman of that Committee). And we've been moving forward ever since!
J. Mark Iwry, Former Senior Advisory to the Secretary of the Treasury and Founder of the Brookings Institution’s Retirement Security Project
That is so exciting, we would have loved to have been a fly on the wall during those early days. 

We used to actually play up the fact that this was a Heritage and Brookings collaboration when we would testify together -- we had it prearranged so Mark would start a sentence and I would finish it.

You jokesters! 

Early on there was federal activity under both conservative and progressive administrations. But ultimately the states established the first Auto IRA programs. What do you like about what you see in these programs so far?

Everything about them! The beauty of it is that we did the theory and the legal framework and the like, but the real hard work was done by you and your successors in Oregon and Courtney Eccles in Illinois, and Katie Selenski in California, and the various other states that are working on this.

What's been beautiful has been to see our concept actually turned into something that works. And of course, one of the great shocks about any public policy proposal is to discover that we did it more or less right and in life it achieves its goals. The fact that we actually have people of the populations that we were targeting participating and building retirement security, that's just really incredibly exciting.

It's just got to feel great to have an idea and to see that idea changing lives for so many people today.

Yes, but we let somebody else do the hard work. They deserve far more credit than we do.

Brilliant. That's what we’re going to say. Now the programs are still pretty young, what would you change? What do you think is Next Gen in the universal retirement savings world?

I see opportunity in two areas. Obviously one thing that's happening now, essentially separate from those two areas, is the fact that … (People, this interview is chock full of good stuff on 5 more topics + research! Do not miss out - click, bookmark, read on.)

Thank you so much David. We really appreciate the chance to talk to you. If you’d like to connect directly with David John, you can reach him at or You can follow David’s work and adventures on Twitter @dcjretiresecure. And you can follow and engage with AARP PPI Research here: @AARPPolicy and the Brookings Retirement Security Project here.
State Program Metrics - Auto IRAs
We’ve got a new view – One of our fans asked for more data on program retention and opt out rates – you know who you are, and you got it. Let’s take a moment to explore what we see. If you’re a glass half full kind of person, you’ll start with retention rates (aka “effective participation rate”). We see that using a simple average of the three programs’ rates, retention was running at about 65% in December of 2019, pre-pandemic. Opt out rates using the same calc method were running at about 35%. Interestingly, participation rates have trended slightly upward over the last year, and opt out rates have correspondingly shown a slight decline.

Other key figures are interesting too. Total funded accounts are up 58% since September 30, 2020, to just under 275k. (Thank you, CalSavers!) – combined program assets are up 45% over the same period to over $167 million saved. Employers initiating payroll deductions is up by 25%. Average account balances across the three programs are $611, while OregonSaves’ average account balance as of year-end was $964 – reflecting a longer average contribution history for that program’s savers.
State Facilitated Retirement Programs in Rollout and Study Mode
Wisconsin (workforce 2.6 million) – Trumpets! 🎺 this week Wisconsin’s Treasurer Sarah Godlewski presented the final report of its Task Force to the Governor in a dedicated meeting on Wednesday, February 10. This report was supported by the hard work of three committees: Tax, Regulation and Education; Access and Saves; and the Universal Savings Committee. The report’s 5 recommendations cover and include: 

  1. Participation: Improving Participation Rates with Employer-Sponsored Retirement Savings Plans
  2. WisconsinSaves: Empowering Small Business and Workers to Save
  3. Emergency Savings: Protecting Retirement With Rainy Day Funds
  4. 401(K)ids - Early Savings: Leveraging the Market and Building Wealth for the Next Generation
  5. Financial Empowerment & Education: Navigating Financial Wellness Through a Trusted Portal of Resources

#Welldone Wisconsin! You are leaders!
Colorado (workforce 2.4 million) – The Colorado Secure Savings Program Board met on February 9 to review draft content and approach for its upcoming Program and Investment Consulting RFP(s) – expected this spring. Treasurer Dave Young, responsible for chairing and staffing the Board, introduced the program’s new Director -- Hunter Railey. Mr. Railey officially starts his new role the week of Presidents’ Day. He previously served as Colorado Director with the Small Business Majority, which was supportive of a program for Colorado. Welcome Hunter!

Treasurer Young and the Board took a moment at the start of the meeting to recognize the work of Policy Director Leah Marvin-Riley, whose tireless and skillful effort with the Treasurer and Task Force during Colorado’s study and outreach activity culminated in the state’s report and successful legislation. Get more of Treasurer Young’s thinking here! (scroll)
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. 
Arkansas (workforce 1.4 million) – on February 1 introduced HB1349, an Act To Establish The Every Arkansan Retirement Plan Opportunity – proposing a MEP plan in the state. A similar bill was introduced in 2019 but did not pass. Editorializing: it’s normal for bills of this type to be introduced multiple times before they achieve momentum and pass into law.
Iowa (workforce 1.4 million) – on January 22 introduced HF189 - An Act to Establish a Retirement Savings Plan Trust. Iowa introduced similar legislation in 2019.
California (workforce 17.9 million) –Litigation Update. We like to say “no good idea goes unopposed” and the state Auto IRA programs have been subjected to pressure from a few directions over their lifetimes. California attracts attention because it is the largest state in the union and its program addresses more than 7 million uncovered workers. Judges in California have twice made determinations in favor of the CalSavers program and the way it is organized.

The current case, Howard Jarvis Taxpayer’s Association vs. California Secure Choice Retirement Savings Program has been appealed to the 9th Circuit where oral arguments were heard this week. Here’s a short recording of the arguments, heard by three judges. Two of these judges were appointed under the Trump administration, one was appointed under the Obama administration. As lay listeners, it seemed to us that each of the judges asked thoughtful, well-informed questions.

At the conclusion of each day’s argument, the judges on each panel confer on the cases they have heard. Each judge expresses his or her tentative views and votes in reverse order of seniority. The judges reach a tentative decision regarding the disposition of each case and whether it should be in the form of a published opinion. The presiding judge then assigns each case to a judge for the preparation and submission of a disposition. Stay tuned.
Meetings on Deck.

  • California (workforce 17.9 million) –The next meeting of the CalSavers Board is scheduled for March 17, 2021.
  • Colorado (workforce 2.4 million) – The Colorado Secure Savings Program Board is expected to meet again shortly – dates not yet set.
  • Connecticut (workforce 1.6 million) – The next scheduled meeting of the Connecticut Retirement Security Authority is February 19, 2021. The agenda and meeting materials have not yet been posted.
  • Illinois (workforce 5.7 million) – The next meeting of the Illinois Secure Choice Board is scheduled for February 18, 2021. The agenda and meeting materials have not yet been posted.
  • Oregon (workforce 1.9 million) – The next meeting of the Oregon Saves Board is scheduled for February 23, 2021. The agenda and meeting materials nave not yet been posted.
Grant's Go-To's: Big Design Decisions - Program Model
Boards and task forces working to develop state-facilitated retirement savings are actively considering various program design decisions. Key questions include whether to use automatic enrollment or automatic escalation, where to set standard employee contribution (or deferral) rates, what type of investment option should be the default for participants who do not choose an investment, and whether to require employers to participate if they don’t already offer retirement savings options for their employees.

One of the most important initial decisions is the overall program structure. To date, the market has generally settled on three distinct models: Multiple Employer Plans (MEPs), Automatic Individual Retirement Accounts (Auto IRAs - with or without an employer mandate), and some form of voluntary marketplace with a selection of low-cost and easy-to-administer retirement plan and product offerings from which employers may choose. …
We’ve got more design insights coming.
Stay tuned! / Grant
Hot Sauce! Cool Stuff.
From Transamerica’s Catherine Collinson, Patty Vogt Rowey and Heidi Cho – the 20th annual Transamerica retirement survey of workers report: Retirement Security: A Compendium of Findings About U.S. Workers. This really is a comprehensive report, clocking in at 245 pages. You’ll want to have your own copy; analysis takes into account more than 25 measures of retirement preparedness and segments results by a range of key demographic elements including generation, gender and ethnicity.

What We’re Watching: We’ve become addicted to MasterClass. We won’t say it’s cheap – we paid for a one year subscription and it set us back about $180. But we are learning so much. This week we are leaning in on Joe Holder: Teaches Fitness and Wellness Fundamentals. We’re 1.5 classes in and have to tear ourselves away to get back to work. It’s still early in the New Year. #pumpitup

P.S. Curious about how we assign value to things? We taught our kids this and it works for us too. About to pay $30 for something? -- just make sure you think you’ll get 30 hours of value out of it. $5, same, 5 hours of fun. Keeps us from buying crappy things that break. Helps us make bigger deep-value purchases without flinching. Super easy for the kids to remember.

We Liked This Too: Self-Portraits.
... 'Kay now, bring on the PIX!
If you like to research and write things, you might like typewriters … oh my gosh, we really want to drill on this picture and learn more about David John’s 325-unit collection, a small portion of which is visible here. Unfortunately they are too well protected by a pair of sharpshooters, so we don’t think we’re going to get the chance.
Sometimes you’ve had just about enough COVID quarantine and if a restaurant within reach opens up ever so briefly, you will dash there with glee. If you are lucky, your daughter Megan will have just gotten her driver’s license and she’ll be excited to serve as your courier. If you are super lucky your wife Sherri will take shotgun and you’ll get to eat your burger swathed in the luxury of the entire back seat of the car.
OK, that’s a wrap. ❤ Hug your people and change the world.

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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.

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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, 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.