Presentation Consumer Federation of America Financial Services Conference December 1 2016 Angela Antonelli Executive Director Center for Retirement Initiatives McCourt School of Public Policy ID: 1047165
Download Presentation The PPT/PDF document "IMPROVING ACCESS TO RETIREMENT SAVINGS ..." is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
1. IMPROVING ACCESS TO RETIREMENT SAVINGS ACCOUNTSPresentation Consumer Federation of America Financial Services ConferenceDecember 1, 2016Angela Antonelli, Executive DirectorCenter for Retirement InitiativesMcCourt School of Public Policy
2. Top financial concern Too little saved and Social Security isn’t enoughMore than half of private sector workers are uncoveredLong-term budget consequencesLong-term economic consequencesWhy Are States Acting?
3. For Innovation and Leadership Look to the States States Are Stepping Up To Address Retirement Security Goal To Design Simple, Low-Cost, Easily Accessible and Effective Savings OptionsFrom Crisis to Opportunity
4. States were unsure as to whether and how ERISA would apply to these state-sponsored retirement savings plans.President directed the Department of Labor (DOL) to issue rules to "Provide a Clear Path for States to Create Retirement Savings Programs” on July 31st, 2015.DOL took the following actions:Created a new regulatory safe harbor allowing state sponsored mandatory auto-enroll IRA to be exempt from ERISA. DOL also wants to expand the safe harbor to political subdivisions (e.g., cities, counties, etc.)Issued guidance for ERISA covered plans –MEPs, Prototype Plans, and Marketplace. How Would ERISA Apply to State Initiatives?
5. Since 2012, More Than 30 States Have Considered or Enacted Private Sector Retirement Initiatives
6. The States Are In Various Stages of Planning and ImplementationStates – Program Enacted (8)MASSACHUSETTS (2012)ILLINOIS (2015)OREGON (2015)WASHINGTON (2015)CONNECTICUT (2016)MARYLAND (2016)NEW JERSEY (2016)CALIFORNIA (2012/2016)States/Metro – Study (6)MARYLAND (2014-2015*)OREGON (2013-2014*)MINNESOTA (2014-2016)VERMONT (2014-2016)NEW YORK CITY (2015-2016)UTAH (2015-2016)VIRGINIA (2015-2016)NEW YORK STATE (2016)PHILADELPHIA (2016)* COMPLETEDStates/Metro – Legislation in 2016 (17)ARIZONACOLORADOGEORGIA (S)HAWAII (S)INDIANA (2) (S)IOWALOUSIANAMAINEMASSACHUSETTS (2)(S)MICHIGANNEW JERSEY (2)NEW YORKPENNSYLVANIARHODE ISLANDSOUTH CAROLINA (S)UTAHWISCONSIN8 other states in prior years have considered legislation(S) – Study bill
7. 5/8 =The Mandatory Auto-IRA
8. States Have Several Options
9. Voluntary or mandatory participationRole of employer and employer liabilityTypes of employers and workers coveredTypes of product offeredDefault, minimum and maximum contribution levelsUse of other tools and nudges such as auto-enroll and auto-escalationUse of tax or other incentivesRole of the stateGovernanceProgram funding Investment and management of assetsFinancial educationWithdrawal rules and portability Program administration (e.g., recordkeeping/account consolidation)Lifetime incomeKey Plan Design Considerations
10. Actions of Congress and the incoming Administration related to retirement securityImplementation work will be watched (WA,OR first)State and cities continue to study options (VT, NY, NM, UT, Seattle, Philadelphia & others)Evolution of models continues and one or more new state programsPrivate sector innovation in response to state effortsExpand focus from savings accumulation to decumulation and lifetime incomeOutlook for 2017
11. CRI.GEORGETOWN.EDU
12. Center for Retirement InitiativesMcCourt School of Public Policycri.georgetown.eduFollow us on social media for updates:FacebookLinkedIn Twitter: @cri_states