The Illinois Secure Choice Savings Program Courtney Eccles

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The Illinois Secure Choice Savings Program Courtney Eccles, Program Manager Illinois State Treasurer’s Office

The Illinois Secure Choice Savings Program Courtney Eccles, Program Manager Illinois State Treasurer’s Office 01

Creation of Secure Choice • The Illinois Secure Choice Savings Program Act (Secure Choice)

Creation of Secure Choice • The Illinois Secure Choice Savings Program Act (Secure Choice) created as a response to the retirement crisis in Illinois • Access to an employment-based plan for workers • Lightest touch on employers (facilitate auto-enrollment, no contributions, no management, no fiduciary duties) • Secure Choice will impact approximately 1. 2 million workers throughout Illinois • Program design and implementation are underway 02

Secure Choice Act • Signed into law in January of 2015 • State-run retirement

Secure Choice Act • Signed into law in January of 2015 • State-run retirement savings program for private sector workers in Illinois • Secure Choice applies to businesses: 1. With 25 or more employees, 2. That have been operating in Illinois for at least two years, and 3. Don’t offer a qualified savings program 03

Participation and Accounts • Employees at qualifying businesses will be automatically enrolled into Secure

Participation and Accounts • Employees at qualifying businesses will be automatically enrolled into Secure Choice • Default deduction of 3 percent into a default target date Roth IRA • Employees can change contribution level, select a different fund option, or opt-out entirely • Accounts will be pooled together and privately managed, and will be portable 04

Employer Role • Employers will: • Facilitate enrollment (and set up the payroll deductions)

Employer Role • Employers will: • Facilitate enrollment (and set up the payroll deductions) • Hand out Program packets (which will be provided in advance) • Employers will NOT: • Have any administrative or managerial obligations • Make any contributions • Pay any fees or costs associated with the program 05

Administrative Features • Managed by a seven person Board (day to day management by

Administrative Features • Managed by a seven person Board (day to day management by private sector vendor) • Treasurer’s Office provides administrative and staff support • Program must become self-sustaining • Any start-up costs appropriated by the state must be paid back • Total fees capped at 75 basis points • Program must not be subject to ERISA 06

Benefits for Workers • Access to a retirement savings vehicle at work (contribute through

Benefits for Workers • Access to a retirement savings vehicle at work (contribute through payroll deduction) • No high minimum initial contribution requirements • Caps on fees and additional protections through state program • Default options make participation easy • Employees have the option to increase/decrease contribution amounts, select different fund options, opt -out entirely • Full-time and part-time workers will be eligible 07

Program Implementation • Working on investment options, program design, legal issues, legislative changes, and

Program Implementation • Working on investment options, program design, legal issues, legislative changes, and education/outreach Program Design Legal and Legislative • Facilitating enrollment (employers and employees) • Structuring entire process (first $ in through first $ out) • Selecting Program Manager (administrative services) • Federal Safe Harbor • “Clean up legislation” Investments • Determining investment policy • Selection of funds (type, how many to offer, etc. ) • Selecting Investment Manager & Custodian Education & Outreach • Engagement with employers and employees • Outreach before program rollout (program packets) • Ongoing marketing and outreach with participants 08

Implementation Continued • Focus on minimizing role of the employer and making enrollment as

Implementation Continued • Focus on minimizing role of the employer and making enrollment as easy as possible for employees • Working with state agencies – gather information, communicate with employers • Meeting with stakeholders and industry regularly (record keepers, payroll providers, advocates, financial service organizations) • Partnering with the other states engaged in implementation (CA, OR, and CT primarily) 09

Program Rollout • Enrollment of participants expected to begin in 2018 • Phased rollout

Program Rollout • Enrollment of participants expected to begin in 2018 • Phased rollout beginning with a pilot program • All employers will be made aware of the program but many may not begin participating until 2019 (in later phases) • Research on participant demographics, financial feasibility, and program design is underway • Final program design elements will be determined by early 2017 • Program Manager RFP and selection will take place in spring/summer of 2017 10

Role of Advocates/Stakeholders Engagement by advocates is crucial to the creation and passage of

Role of Advocates/Stakeholders Engagement by advocates is crucial to the creation and passage of legislation, and the ultimate success of state programs. 11

Research and Legislation • Some states already have laws on the books, but many

Research and Legislation • Some states already have laws on the books, but many do not • Conduct state specific research • Work with legislative champions, State Treasurer, State Comptroller • Build diverse base of support – education on the issue will be key (public and policymakers) • Growing momentum for state programs – expect significant activity over next few years 12

Assisting with Implementation • Engage with the process – many state programs operated by

Assisting with Implementation • Engage with the process – many state programs operated by Boards with open/public meetings • Provide research/resources (most programs have limited/no budget for start up) • Participate in state rulemaking process • Serve as resources to Board and staff (expertise in consumer protections, asset building, focus on LMI workers) • Outreach and education to employees/employers • Focus groups, messaging, key considerations for lower-income workers • Continue to be public voice of support for programs 13

More Information • Treasurer’s Website includes a page for Secure Choice (www. illinoisretirement. gov)

More Information • Treasurer’s Website includes a page for Secure Choice (www. illinoisretirement. gov) • • Email address for questions Board materials (agendas, minutes, approved documents) One page introductory fact sheet More information will be added in the coming months • Contact Courtney Eccles: [email protected] gov 14