|
RETIREMENT SECURITY MATTERS
A forum for retirement innovation information sharing
focused on states, supporters, and service providers.
Vol 64 | October 20, 2022
| | |
Greetings! Lisa, welcome to Retirement Security Matters – where we talk about retirement readiness innovation by the public sector, private sector, and policy organizations. | |
As nature gets ready for its last hurrah before winter sets in here in the Northern Hemisphere, we have a bit of news to share. So, pull up a cushion and a blanket, grab a hot cocoa, and enjoy some perspectives, from a warmer place:
-
What the Smallest Employers Want - with Gusto's Steve Abbott
-
State Auto IRA metrics
-
Key updates from California, Colorado, New Mexico and Maine
-
News! - a shift is coming at Massena Associates, and we are excited to share!
-
Hot Sauce, Cool Stuff: this week's must reads
-
Pix of the week – retirement security ruminations from the land of George Washington, in excellent company.
| 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 with us.
Click here for more information.
| |
What the Smallest Employers Want: Gusto and a tide of new workplace savings
| |
|
Government Affairs for Gusto. We first met Steve during his tenure at the Pew Charitable Trusts, and we recall talking over tacos about retirement savings. In his transition to the private sector, Steve’s kept a true north focus on financial inclusion and design simplicity. So what does it take to serve the country’s smallest employers? *Read on*
Steve, tell us about Gusto’s role in the world of retirement security and coverage accumulation and de-cumulation.
We call ourselves the Gusto People Platform. What that means is we are a payroll, benefits, and HR provider for small businesses. And when we say small businesses, it's truly small – our platform was optimized for employers with fewer than ten employees. We are not a 401(k) provider, but for years we had an exclusive partnership with Guideline. As we've grown, we saw other businesses wanting more options in terms of 401(k) providers and selection. We built integrations this year with Human Interest, Betterment, Vestwell, and Pay (k)onnect. You can view a demo on our website.
Don’t have time to read it? Listen to our conversation HERE.
You’re obviously focused on the employer side. We’re interested to know how are the state Auto IRA programs impacting Gusto’s business, if at all?
Well, this should be telling. California is our largest market with tens of thousands of customers. The compliance deadline CalSavers instituted on June 30 impacted over thousands of our customers. As the date approached, we held webinars and ran an experiment sending a “to-do” notification that they had to either enroll in CalSavers or enroll in Guideline, Betterment, Human Interest, etc. The result was we saw a 35% increase in 401(k) conversions and that increased adoption rate has sustained itself at least through the end of August.
Fascinating. Let’s turn to the concept of tech. As a startup, what are some of the top learnings that you’ve identified as you work in payroll and retirement with these very small employers?
(Continued HERE! Don’t miss the rest of Steve’s essential insights and his thoughts on policy priorities for the next few years)
We’ve talked about a few important things. What haven’t we touched on that might be interesting today?
Let's talk about the crazy economy and the still tight labor market and how Gusto as a business is evolving. We have a unique data set that can speak to what's happening in the small business marketplace. And my great colleagues in our Gustonomics department recently put out a public-facing economic trends data tracker. We're also doing some in-house analysis that talks about the significance of benefit offerings on employee attrition and retention. Look for this to be published later this month or in November.
These facts can help our customers understand the benefits of offering benefits, and we can help educate the broader market. But, a good way to close – it's good business to offer a 401(k) retirement plan.
We love it. That information needs to be broadcast far and wide. We are going to give one final – non-retirement – note. It's baseball season. No one can see you at the moment, but you’re sporting a Guardians cap. We’re Red Sox fans, which means we support anyone who plays New York. Go Guardians!
Yes, Go Guardians!
Steve Abbott is the Head of Public Policy and Government Affairs for Gusto. In his role, he leads a cross functional team that designs and executes a public policy strategy that advocates for a robust ecosystem for small business formation and growth, and promotes employee financial health and wellness. Prior to Gusto, Steve spent 10 years at the Pew Charitable Trusts leading government relations for projects focused on promoting family economic stability. Steve also has experience working for Congress and was a consultant to Fortune 500 companies and non-profit organizations advising them on public policy. Steve holds a Bachelor’s Degree in Economics from Denison University and an MBA from the University of Maryland. You can connect directly with Steve Abbott on LinkedIn.
| |
*Fresh!* State Auto IRA Program Metrics | |
|
Keeping it simple: Here’s the freshest data from the states.
What we look for in these numbers: We like to watch the rate of growth of funded accounts year to date and over longer periods of time. We keep an eye on average account balances, recognizing that this number doesn’t reflect the larger balances of earlier and longer-term savers very well – but it’s still an important metric for how accounts as a whole are growing.
Highlights: Funded accounts are over 550,000 -- up 30% and more than 100k since the start of the year. Total assets are now about $518 million, up $110 million since the start of the year. These assets primarily reflect Oregon, Illinois, and California. The Connecticut and Maryland programs are now live and starting to take on new accounts. Colorado will begin adding new funded accounts within about one month.
| |
State Facilitated Retirement Programs - Fresh Highlights | |
|
California (workforce 19 million) – As previously noted, CalSavers will re-negotiate participant fees with the program administrator Ascensus. In other news, CalSavers is hiring! - see their job posting for a manager position to lead their data, security, analysis and reporting efforts here; as well as two positions dedicated to customer support and outreached here and here).
| |
|
Colorado (workforce 3.2 million) – The Colorado Secure Savings Program Board held an Emergency Board Meeting on October 14, 2022, to review and approve the Colorado SecureSavings Program Rules.
| |
|
Maine (workforce 677,000) – The Maine Retirement Savings Board met October 19, 2022. The agenda included a brief update from Treasurer Henry Beck and the highly anticipated introduction of Beth Bordowitz as the new Executive Director of the program [Woohoo!]. Welcome aboard and we can’t wait to see the impact you are going to drive!
| |
|
C O M I N G U P
Join where you’d like, and count on us to follow these meetings for you:
-
Oregon (workforce 2.1 million) – The next meeting of the OregonSaves Board is scheduled for November 15, 2022.
-
California (workforce 19.0 million) –The next meeting of the CalSavers Board is scheduled for November 21, 2022.
-
Maryland (workforce 3.1 million) – The next meeting of the Maryland$aves Board is scheduled for December 12, 2022.
| |
What, Why? And some (really) good news.
| |
|
Friends, colleagues, fellow retirement savings lovers!
A bit of news: A shift is coming for me, and at Massena Associates.
I’m pleased to share that this December I will be joining the Defined Contribution Institutional Investment Association (DCIIA), working alongside Executive Director Lew Minsky and with DCIIA’s excellent team. I will be serving in a dual role, as chief operating officer and director of a new retirement savings inclusion initiative.
I am excited about both. I’ve known DCIIA since its early days and long respected its membership and key annual convenings, like the Academic Forum (coming up in November) and the Innovation Forum (coming up in January), and its meaningful research initiatives (Research Minute, anyone?), among other thought-leading activity. When DCIIA members get together, they “convene with curiosity” – my words – they’re looking for the better ways to serve this space, and to move its work forward.
DCIIA’s roots go deep in the private sector, but they’ve always been open-minded toward the innovation activities going on elsewhere in the retirement savings space – including with states. It has been my pleasure – and the opportunity of some of you as well – to share (y)our state program experiences with a wider DCIIA audience over the last several years.
I love these conversations and I think they are important. I believe there is an opportunity to expand what we know and to share more of what we are working on in the interest of continuous, meaningful improvement to the retirement system here in the US. We’re just making a little bit bigger tent. And I hope you’ll come on in.
But wait, what about Massena Associates? And what about RSM, the newsletter I can’t wait to get? I’m so glad you asked! Massena Associates isn’t going away. Some of our activities will naturally change (let’s talk if you’re wondering). And Retirement Security Matters will keep coming to your in-box chock full of snap, sass, and stuff you need to know.
That’s it! Just that! So, I’m looking forward to sharing more, and to getting your thoughts on this new new thing. Let’s do it together. ❤️
/ Lisa
| |
|
New research – Adds to the evidence that retirement plan participants are frustrated by prevalent market volatility and spooked by fears of increased inflation. The Cogent Syndicated DC Participant Planscape report from Escalent shows that in the event of a market downturn 61% of Millennials will likely liquidate their retirement plan assets compared to other generations. Get the rest of the scoop from PLANSPONSOR’s latest article.
In the news - Aon plc has announced its pooled employer plan (PEP) has reached $1 billion in plan assets and commitments since its inception in 2021. Today, the Aon PEP is one of the key industry leaders with more than 40 employers providing 401(k) benefits to over 30,000 employees, helping them shape better retirement decisions. Along with this milestone, the firm urges Congress to pass legislation to allow 403(b) programs into PEPs. Check out PLANSPONSOR’s recent article, and to read more information about the Aon PEP, click here.
This week the 6th Annual Aspen Leadership Forum on Retirement Savings was held in Irvington, Virginia. It was so much fun, and so much learning as we grappled with the biggest questions about how to build an inclusive, adequate, and effective savings system for everyone in the US. Here’s is a great place to stay tuned for a read-out of this gathering of incredible leaders from across the retirement savings ecosystem and beyond.
Yes! If you’re over age 50 (we are), you may find this piece very encouraging. We’re going to quote our friends at Boston College’s Squared Away Blog, who wrote this about age 55+ workers: “A study by Damir Cosic at the Congressional Budget Office and C. Eugene Steuerle at the Urban Institute finds some evidence that employers increasingly view them as pretty good substitutes for workers in their prime whose age – the mid-30s to mid-50s – and experience puts them at peak productivity.” Emphasis added. Finally, we have been vindicated. As an aside, we had the pleasure of meeting Dr. Steuerle in person earlier this month, in Boston. He is lovely.
| |
|
Are we all just holograms? We do not understand this. But we want to, really really bad. If you do, will you explain it to us in terms that do not involve a reference to Klein bottles? Subscription may be required to read.
There’s only one word for this: mind-boggling. If you like plants, you’re going to love this. Unless you don’t eat sentient life forms, in which case it could be troubling.
Must listen. And now that we’ve got you on social media, this is the most beautiful thing we’ve heard in a while. You can get more of this energizing crew here.
| |
... It's time for some PIX! | |
WARNING! Selfie overload from the 2022 Aspen Leadership Forum - because we love our fellow retirement savings leaders and friends. | |
|
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.
| |
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.
| |
|
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.
| | | | | |
