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RETIREMENT SECURITY MATTERS
A forum for retirement innovation information sharing
focused on states, supporters, and service providers.
Vol 72 | February 9, 2023
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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. | |
♥️ It’s the season of love and affection, which means … pampering. We hope you have a lovely, fun-filled celebration. As you spread some joy, let us help you catch up on the world of retirement security. Grab some sweet and savory chocolates and nestle in. You’ve earned it!
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Mateo Galindo Lozano of CHCF on Planificación de Jubilación - in community
- Key updates from Maryland, New Jersey, New Mexico, and Oregon
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A hot take on SECURE 2.0 - This week we’ll hit the key features of Employer Incentives
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Hot Sauce and Cool Stuff - we've got the goods to sharpen your day
- ... and 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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Click to grab this space for your brand.
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New York State En Español – Planificación de Jubilación – For the Hispanic Community | | |
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This week we have the pleasure of chatting with Mateo Galindo Lozano, currently the Business Specialist at the Committee for Hispanic Children & Families in NYC (and who has been a licensed clinical psychologist in Colombia since 2022).
Lozano helps licensed childcare providers improve their businesses through one-to-one consultation and training on business-related topics. Including retirement. This is our summary. Join our full conversation here.
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Mateo Galindo Lozano
Business Specialist at CHCF
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Mateo Galindo Lozano, we’re so excited to talk with you today. Tell us about your work and clients.
The Committee for Hispanic Children & Families in New York City is a nonprofit organization that focuses on the continuum and improvement of education in specific communities in all five boroughs of New York. I connect with the community and identify ways to expand opportunities for small business owners in the family childcare industry. I do direct business training with some of these home-based childcare providers. With my support we explore how they are going to maintain their business, which includes money management, and savings and retirement.
Is retirement savings a very common conversation in the communities where you are working?
Retirement planning is not a widely discussed topic, but it's important. The challenge is increasing awareness of the options available and understanding if they are a good fit. I am working to bring these conversations to my providers, making it easy for them to understand the options available. To achieve this, we are planning to host conferences where experts from various fields can share their knowledge with our providers in New York City.
What do you think we can do to make emergency and retirement savings easier for this community?
It's all about knowledge and being able to clearly explain things so that our childcare providers can fully understand.
Keep reading HERE
New York authorized an automatic IRA program for small business. Do you think a program like that might be important?
Yes, I absolutely do. I really hope that within the next couple of years we will be able to launch such a program here, as sometimes it is not only accessibility but also simplifying the complexity of the programs that is important. I believe this program would break down barriers by making retirement plans easier to understand and accessible. And that's what it's all about.
How much does language matter?
It’s a good point. Many of our providers primarily speak Spanish, and many English-speaking parents prefer to bring their children to these providers so that their children can learn Spanish. But you’re right, important information about financial services is often not made available directly in relevant languages.
Thank you Mateo! We appreciate your perspective and insights. Want to connect? You can reach Mateo Galindo Lozano on LinkedIn and by email at mlozano@chcfinc.org. You can learn more about the work of the Committee for Hispanic Families and Children here.
Are you in New York City? The CHCF hopes you will be interested in being a benefactor of this year's Annual Gala for the Committee for Hispanic Children & Families – sponsorship information at the link. CHCF is a grassroots organization with important direct service impact on under-served neighborhoods in New York City. Mateo says: If you want to learn more about CHCF's direct impact, view our Annual Report any time online -- it's easy to skim, with lots of data about our evolving approach to direct services. Please feel free to reach out directly if you have any questions!
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*Fresh!* State Auto IRA Program Metrics | |
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Here’s what you need to know:
Saver assets are up 57% in 2022, and 4x since December 2020, to $640 million. Average account balances are up slightly to just over $1,000. (Longer term balances are higher, but not reflected in this data).
The four programs shown here now aggregate to over 630,000 funded accounts. For comparison, funded accounts are up 47% in 2022 so far, up 2.4x since December 2020 and up about 5.8x since December 2019.
Over 143,000 employers are now registered to facilitate a state Auto IRA. Of that number, more than 46,000 have begun forwarding payroll contributions for savers.
What’s interesting? Take a look at the trend over the last two years for these key stats. We think it’s a thingga beauty.
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State Facilitated Retirement Programs - Fresh Highlights | |
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Maryland (workforce 3.2 million) – Maryland$aves Board has released its meeting calendar for 2023, and the Board briefly met on February 6, 2023.
Importantly, the Board announced that Glenn Simmons has become the program’s official executive director and chief executive officer after serving as acting executive director for a time. “Thousands of Marylanders will be more secure because Glenn Simmons left the comfort of private industry to join MarylandSaves,” said Board Chair Joshua Gotbaum on a communication early this week. “Now that he’s led the launch of our program, we’ll be able to help hundreds of thousands more.” Glenn, you have our congratulations – and MarylandSaves leaders, well done.
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New Jersey (workforce 4.4 million) – The New Jersey Division of Law issued a RFQ to provide legal services to the New Jersey Secure Choice Savings Program Board. Questions are due February 14, 2023, and proposals are due March 16, 2023. You can get your copy of the RFQ here.
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New Mexico (workforce 1 million) – The New Mexico State Treasurer’s Office released its 2022 Official Annual Report. This document provides a great high-level overview of the historical background and purpose leading to the enactment of the New Mexico Work and Save Act, highlights of significant milestones and accomplishments for FY2022, as well as initiatives for FY2023. Which includes continued assistance in convening of the Work and $ave Board, legislative e support and in standing up and promotion of the New Mexico Work and $aves programs (Marketplace and IRA program).
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Oregon (workforce 2.2 million) - The OregonSaves Board met on February 7, 2023. The agenda included a summary report from Executive Director Michael Parker, a brief update from program administrator Vestwell, and an investment performance report from Sellwood Consulting. Sellwood noted that under the current fee structure, all-in costs are very competitive with what savers would pay independently to maintain an IRA account with low-cost provider Vanguard, without the benefit of automated payroll deduction.
Oregon has just executed its fifth annual savings rate auto-escalation, for savers who have been in the program six months or longer. "Over 2,000 savers were escalated from 9% to 10% savings rates," the program notes, "and 25,000 were escalated from 6% to 7%" -- including a set of SEIU workers who previously had no access to automated savings.
In its actions items, the Board approved administrative rules transitioning the inbound asset "safe investment" period from 90 days to 30 days, in alignment with the practices of the Illinois and California programs. Materials can be requested directly from the Oregon team.
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C O M I N G U P
Join where you’d like, and count on us to follow these meetings for you:
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California (workforce 19.2 million) –The next meeting of the CalSavers Board is scheduled for February 27, 2023.
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Maryland (workforce 3.2 million) – The next meeting of the Maryland$aves Board is scheduled for May 1, 2023.
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If You Incent It, Will They Do It? a Hot Take on SECURE 2.0 and New Plans | |
This is Part 3 in a series covering key elements of SECURE 2.0, entered into law as part of the 2023 Appropriations Act (Division T).
We’ve just covered Automatic Enrollment and the Saver’s Match, one auto-feature, and one incentive with an auto-feature. Now we’ll focus on straight-out incentives to employers to start new plans.
Small employer pension plan startup cost credits: it’s good news.
SECURE 1.0 in 2019 made up to $5,000 in retirement plan startup cost credit available to employers with 100 or fewer employees. The credit covered up to 50% in eligible expenses for the first three years of operation of the new plan. This credit came available for plan years starting January 1, 2020, so employers using this credit would have seen smaller tax burdens in 2021, and again for 2022.
S2.0 enriches this credit, covering 100% of eligible expenses for smaller employers who start plans – those with 50 or fewer employees.
… and contribution credits: the news gets better.
Small employers can also now take a tax credit for their employer plan contributions on a one-for-one basis, with limits.
Employers with 50 or fewer employees can take a credit of up to $1,000 per employee. Employers with 51 to 100 employees can also take a credit, but it declines by 2% for every employee, down to 0%.
Both changes are applicable to tax years beginning January 1, 2023.
Does it matter? The short answer is “yes” for at least two reasons...
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Because employers continue to be subject to facilitation requirements in Auto IRA states, we know a large number continue not to offer plans.
For that reason, extending access and coverage through state Auto IRAs continues to be one important way to make sure workers can easily save for retirement automatically, straight from their paychecks.
Retirement security matters! / Lisa
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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.
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Have you ever wondered ...
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What is the impact of changing existing terminology to describe the rules governing Social Security retirement benefits? If so, check out Francisco Perez-Arce, Lila Rabinovich, Joanne Yoong and Laith Alattar fresh out of the oven study. The researchers provided respondents from a nationally representative online panel with information pertinent to the decision of when to claim Social Security retirement benefits.
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What really matters for annuity demand and why few people buy annuities? Search no more, our friends at The Center for Retirement Research at Boston College have released a new issue brief assessing the relative importance of two potential reason for this low demand: objective life expectancy and subjective survival pessimism. The results show both factors impact annuity demand, but objective life expectancy has a much larger effect than pessimism. Meaning that a larger public role may be required to boost annuitization.
Do you have minute to spare? Check out DCIIA’s latest Research Minute (a series of brief, thought-provoking retirement research and behavioral economics ideas) on financial wellness trends –a quick look at the tools and services employers are offering workers. Bottom line: Employers are increasingly looking to support the financial needs of workers. These findings show that employers are seeking to meet those needs through expanding beyond traditional offerings into areas such as emergency savings and student loan debt management. Both types of offerings will likely see near-term growth.
State-Run retirement programs on the news – Angela Antonelli, Executive Director of Georgetown University’s Center for Retirement Initiatives featured in CNBC article on how these programs are becoming more popular, what’s in the pipeline and much more.
In Our Ears! Still working our way through the well-written but slightly disturbing biography of Woodrow Wilson by A. Scott Berg. Here’s another perspective. Candidly, he comes off well about 90% of the time but a couple of things are just not great. It’s 1916 and America is working hard to keep itself out of WWI but getting sucked in anyway. Along the way we’ve segregated the Treasury and the Post Office in ways that are separate and not at all equal. Prejudice doesn’t stop there. When Louis Brandeis has been made the first Supreme Court Justice of Jewish descent, one of his co-justices is said to have regularly left the room when Brandeis spoke, and refused to have his official portrait taken sitting next to Brandeis. Oy vey. We are human animals, are we not?
Did we sit on an airplane in a middle seat watching TikTok for six hours on Sunday? Yes, Yes we might’ve. For that reason we have this gem for you.
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... Brightening your day with some Pix! | |
Let's start with Team CHCF...wow you guys are looking sharp! | And thank you Mateo, for sharing a few day-in-the-life pix, including one with his gorgeous mother, Maria Lozano. ♥️ We think we see Puerto Rico, and some pretty fun NYC cultural sites. Beer is culture. Never forget it. | |
In other news ... last week this was fun. And we narrowly missed this upcoming weather. #hopeitsbetterwhereyouare | |
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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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