RETIREMENT SECURITY MATTERS

A forum for retirement innovation information sharing

focused on states, supporters, and service providers.

Vol 70 | January 12, 2023

Greetings!  Lisa, welcome to Retirement Security Matters – where we talk about retirement readiness innovation by the public sector, private sector, and policy organizations. 

Welcome to the New Year, friends! We didn't make a lot of resolutions but we are absolutely committed to bring you the best retirement savings innovation information. So, snag yourself a cozy beverage and settle in for a few minutes of catching up:

• Asso Yankson of EY: Good can get better. Don’t miss.
• Key updates from California, Delaware, Maine, Massachusetts, and New Jersey
• A hot take on how Secure 2.0's automatic enrollment impact
• Interesting new reads! Hot Sauce and Cool Stuff
• And Pix of the week, to close us out

Comments or content suggestions? We welcome both. Have something about your program you’d like to share? We are all ears.

RSM wants your support! Be seen here.

Click here for more information.

Meet Me Where I Am: Asso Yankson Reframes Retirement

Just before the holidays (and Secure 2.0) we had the pleasure of chatting with Asso Yankson, Senior Manager, Retirement Consulting at Ernst & Young LLP (EY).

We love this conversation both for its insights, and for the way EY and Yankson have worked together to create a role that is both difference-making, and supportive of working parenting. Read on to see how this works.

This interview has been edited for length and clarity.

Asso Yankson,

Senior Manager, Retirement Consulting,

Ernst & Young LLP

Asso, you’re a millennial building a career in the retirement sector. Does that make you a forward thinker?

We witnessed a lot of disparities through the pandemic, and it brought into focus my drive to innovate in the retirement space. It became clear to me that we had an opportunity to lead with purpose. To execute on our mission at EY, we developed a theme of empowering financial security and wellness as a driver in building a better working world within retirement.

There's a lot going on in the retirement security space. What are you seeing that you find most valuable?

We're seeing increased collaboration, facilitated by retirement industry organizations. These initiatives range from setting better industry standards around data privacy and security, addressing challenges related to consumer trust and engagement, establishing coalitions to drive more equitable savings for folks regardless of race, gender, or income level. I'm also seeing more global retirement leaders at the table and luminaries who are external to financial services. This is especially valuable for diversity of thought and asking better questions that challenge our thinking.

Let's talk about inclusion. What are the elements you think we should be most focused on?

I’m excited to see the shift from talking about financial literacy to understanding the importance of financial inclusion and empowerment. Meaning: financial education alone isn't enough. It’s important to help people wherever they may find themselves along their financial journey. That base gives us a more relevant place to start equipping people with better ways to make informed decisions that will help them to grow wealth throughout the years.

• Earnings Matter. As an aside, knowing how to manage money is important, but it's more helpful when you have income to manage.

• Support that understands me. When we're focusing on advisors, that may mean our industry needs to develop a more diverse workforce plus advisors so that people feel comfortable and related to experientially and can build that trust.

“Support that understands me” – what matters here?

If we want to empower financial security and wellness — one thing we can do more of is meeting customers where they are. This is part of human centricity or humans at the center. It means having the right solution and user experience based on where someone may be within their financial or life journey. To get it done also means being more focused on partnerships, with embedded finance being an important one.

What I mean by embedded finance is … Keep reading HERE.

At EY we talk about reframing retirement – and its many dimensions. One that I want to highlight is reframing the concept to lifetime financial resilience or lifelong self-care -- or another term that transcends age and life stage. This idea clearly embeds the money experience across financial and non-financial sectors, and over an individual’s lifetime. It recognizes that every financial decision is important from day one, and collectively impacts quality of life regardless of the post-career path that's chosen. Shifting mindsets now can make the idea of living in retirement more relatable at any age.

Asso Yankson – thank you for sharing your innovation experience with us! You can follow Asso’s work here and you can connect with her on LinkedIn and by email here.

Asso Yankson is EY Americas Retirement Consulting Senior Manager focused on empowering financial security and wellness for clients, communities and the retirement ecosystem. As a leader within EY’s retirement practice, Asso delivers strategy, transformation and management consulting to top U.S. wealth and asset management, insurance and retirement firms. She most recently helped shape the vision and execution of the inaugural EY Innovation Studio event series for the retirement ecosystem, entitled “Empowering financial security and wellness: Reframing retirement.” This forum convened over 175 executives from 65 leading firms across the U.S. retirement ecosystem to explore innovative methods for building better financial outcomes for all.

What’s up! States are working on their data and we don’t yet have a full set for 12/31/2022. However, the data we do have is very useful. Here’s what you need to know:

Saver assets have increased from our last report, up 54% year-to-date and 3.9x since December 2020 to $628 million. Average account balances are up slightly to just over $1,000. Longer term balances are higher.

The four programs shown here now aggregate to over 618,000 funded accounts. For comparison, funded accounts are up 44% this year so far, up 2.3x since December 2020 and up about 5.7x since December 2019.

Over 139,000 employers are now registered to facilitate a state Auto IRA. Of that number, more than 47,000 have begun forwarding payroll contributions for savers. 

California (workforce 19.2 million) – Californians continue to move closer to financial security. As of January 1, 2023, businesses with fewer than five employees are now covered under CalSavers. Quick refresher: Senate Bill 1126 expands CalSavers by requiring employers with at least one employee to register for CalSavers, if the employer does not sponsor a retirement plan for its employees, or register as exempt if a retirement plan is provided.  In other news, CalSavers adopts a new program fee structure, with program administrator Ascensus, to begin spring 2023.

Delaware (workforce 500,000) – Implementation of Delaware EARNS is progressing steadily. The Delaware State Treasurer's Contributions and Plans Management Division has opened its search for the DE EARNS Program Director. Applications are due by January 20, 2022.

Maine (workforce 674,000) – The Maine Retirement Savings Board met on December 21, 2022, to progress its planning with Executive Director Beth Bordowitz. The Board issued a series of requests for proposal, starting with an RFP for external legal services, an RFI for branding services, and an RFP for investment services. Responses are due January 12, 17, and 26, respectively. You can find more information on the Board here and download the full proposal requests here.

Massachusetts (workforce 3.6 million) – The Massachusetts CORE Plan Statutory Committee met on January 9, 2023. As a refresher, this program is a multiple employer plan targeted specifically to non-profits with 20 employees or fewer. The agenda included a Q3 2022 CORE investment review from Aon Investments, and a broader program update from Empower Retirement that included social media marketing and outreach strategy development. At December 31, 2022, the program had $18.9 million saved by 1,353 participants at 165 adopting employers. And 79% of participating employers have elected to offer matching or nonelective employer contributions. 

New Jersey (workforce 4.6 million) – The New Jersey Secure Choice Savings Program Board met November 18, 2022 (agenda here). The Board approved all open motions and introduced Todd Hassler as the new Executive Director of the program. Most recently, Todd served as senior investigator for the U.S. Department of Labor’s Employee Benefit Security Administration, where he analyzed benefit plan designs and investigated operational failures. 

“Todd’s vast knowledge and wealth of experience in responsible oversight of employee benefit plans will be valuable assets in launching the Secure Choice Savings Program,” said Andrea Spalla, Assistant State Treasurer and chair of the Secure Choice Savings Board on an official communication. From RSM: Welcome aboard!

C O M I N G  U P

Join where you’d like, and count on us to follow these meetings for you:

• Maine (workforce 674,000) – The next meeting of the Maine Retirement Savings Board is scheduled for January 18, 2022. 

• Oregon (workforce 2.2 million) – The next meeting of the OregonSaves Board is scheduled tentatively for February 7, 2023.

• New Jersey (workforce 4.6 million) – The next meeting of the New Jersey Secure Choice Board is scheduled for February 10, 2023.

• Illinois (workforce 6.4 million) – The next meeting of the Illinois Secure Choice Board is scheduled for today, February 16, 2023.



• California (workforce 19.2 million) –The next meeting of the CalSavers Board is scheduled for February 27, 2023.

What’s Secure 2.0 Got to Do With It: a Hot Take on Automatic Enrollment

If you’re like us, you’re hearing the words “Secure 2.0” bandied about everywhere you go. The second SECURE Act was memorialized in the 2023 Appropriations Act (Division T), signed into law as you were picking crumpled wrapping paper off the floor and putting your sparkling into the fridge for New Year’s Eve.

And, It’s a veritable cornucopia of goodies. We counted about 40 provisions when we read the Act, and we’re sure we missed a few.

We'll do a short series on some of the provisions, focusing on the ones that impact you, and retirement security, the most.

Let's start with our favorite: Automatic Enrollment

Under the new law, retirement plans are required to automatically enroll their workers. We like automatic enrollment because it makes worker participation so simple, so natural, and participation rates jump.

But the law has some important exceptions that will slow the roll of this new retirement plan feature… 

What it means in real life.

We talked to our friend Josh Cohen, of PGIM about what this all means. Not surprisingly, Josh has a measured view of what the new automatic enrollment provisions will achieve in the near term. “Because it’s just for new plans, the impact on broader retirement readiness in the US will probably take a while to see.”

We’re waiting on the numbers (feel free to share if you have them) – but we believe it’s a pretty small group of employers that will be covered by this provision every year.

“That being said, it’s another step to get more individuals into the retirement savings system,” says Josh.

We agree. And we’ll add to that – if you work in a state that has an active Auto IRA program – you will be covered and you’ll be automatically enrolled there.

So should states stop their efforts, given this new auto-enroll feature in Secure 2.0? We think not. Secure has some provisions that will expand coverage, but they too have limitations.

Stay tuned, we’ll address some of those coverage elements in our next edition.

Retirement security matters! / Lisa

This piece was written by Lisa Massena and the views expressed are her own. You can get your own copy of the Secure 2.0 Act as included in the 2023 Appropriations Bill here. 

Tagging on to our Secure 2.0 hot take on automatic enrollment, don’t miss Josh Cohen’s terrific podcast The Accidental Plan Sponsor. 5 Stars. It’s a must listen for RSM readers, start with Season 1.

Conference season swings again. You may be planning to join Georgetown Center for Retirement Initiative’s 2023 State-Facilitated Retirement Savings Program Network (SRSPN) Annual Conference. Watch the Georgetown site for report-outs from innovators and continued future thinking. Thank you, Angela Antonelli, for your tireless work on behalf of retirement savings initiatives in the US.

On the research front, top new perspectives. 

• As the initial Auto-Programs launched in the U.S., there were concerns that state programs could crowd out private market services. A recent article by The Pew Charitable Trusts examines this concern. The analysis shows that programs in California, Illinois, and Oregon instead are linked to increased private plan adoption. Does this mean state programs complement the private sector market for retirement plans?

• As boomer women have moved into the labor force and established their personal and professional independence, their financial fortunes have improved. A recent study from Boston College’s Center for Retirement Research aims to document their personal and economic progress since the 1970s and finds that their financial standing, compared with men, has improved.

• Employers have embraced 401(k) plan benefits changes for 2023 but have avoided certain enhancements provided by the original SECURE Act, new data from Alight showed. “The [original] SECURE Act did little to quell employer concerns about annuities,” the Alight report states. “Even though the SECURE Act was designed to help relieve fiduciaries’ responsibilities for selecting an in-plan annuity provider, nearly half of employers say fiduciary concerns are a major reason they don’t have annuities in their plans.” For more information, check out PLANSPONSOR’s recent article.

• Kamila Bielawska and Arkadiusz Kozłowski from the University of Gdansk have a new working paper: Retirees’ Subjective Assessment of their Post-Retirement Financial Positions in the Light of Existing Standard of Individual Replacement Rate. Cutting to the chase: "In the subjective assessment of retirees, a replacement rate of 2/3 of previous income is regarded as a necessary minimum rather than an income that ensures a comparable standard of living during retirement." A necessary minimum. The authors continue: "This conclusion points to an even greater challenge in securing adequate resources in retirement."

And now for a little palate cleanser.

In Our Ears. We like the Youtube podcast Diary of a CEO. This week’s piece with Davina McCall was long, and riveting. We think we listened to it in four chunks. There was a lot to like, including the moment at 48:20 where Davina says, “If you know where you’re going, your car almost self-drives.” She’s talking about life, not cars, and it’ll make more sense in context, but it’s a powerful idea.

Oldie and Goodie. Our presidential reading continues. At the moment we’re focused on Presidents Roosevelt and Taft, and America at the turn of the century (the turn before the one we all just went through together). Doris Kearns Goodwin first published The Bully Pulpit: Theodore Roosevelt, William Howard Taft, and the Golden Age of Journalism in 2013. It’s still a great, informative read full of excellent storytelling. By the way, Kearns’ foray into the evolution of journalism starting with McClure’s Magazine and the work of Ida Tarbell is a chef’s kiss in this book.

... We are ready for PIX of the week!

From our esteemed colleague Asso Yankson, a little "day in the life" - some retirement savings transformation, and more.

Left. Asso with faculty and staff from Charlotte Preparatory School at the TIAA Race Against Isms (e.g., racism, ageism, sexism, classism, ableism). Initiative that awards scholarships to North Carolina college students that play a leadership role in the fight against social injustice in their community.

Right. Asso with EY colleagues and Preston Rutledge, former Assistant Secretary of Labor for EBSA and founder of the Rutledge Policy Group, at the Diversity, Equity & Inclusion Awards Celebratory Dinner, sponsored by the Defined Contribution Institutional Investment Association (DCIIA). 

While squeezing some family time with her husband and their two daughters. Like a cool trip to Washington, DC. Highlights included visits to the White House, Lincoln Memorial, National Mall, Martin Luther King Jr. Memorial and Howard University (where Asso is an active alumna and former member of the university’s Board of Trustees).

And on those team building days, a few exciting rounds of volleyball, egg/spoon racing and cornhole. 

Back in Oregon -- if you like stickers and great hamburgers, you’re going to love this place. You may find yourself on Mount Hood one afternoon in the village of Welches …

If you do, you’ll want to stop in at Wraptitude Restaurant for a bite to eat and maybe even some live music. This is a local’s joint, but you will be welcomed with open arms. 

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.

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.