WOODSTOCK INSTITUTE | NOVEMBER 2015 November 10, 2015 Using Data to Help Illinois Workers Save for...

WOODSTOCK INSTITUTE | NOVEMBER 2015

November 10, 2015

Using Data to Help Illinois Workers Save for Retirement

Spencer M. Cowan | Senior Vice PresidentWoodstock Institute | Chicago, IllinoisP 312.368.0310 | F [email protected]

@woodstockinst

WoodstockInstitute

mailto:[email protected]

Overview – A Multi-facted Effort


• Establish the context– current trends in retirement income

• Define the extent of the problem– quantify and focus the discussion

• Develop a proposal• Policy advocacy supported by data• Pass and implement the solution

Establishing the Context


• Social Security was not meant as a sole-source retirement plan– supplemented by pension and savings

• Pensions becoming rare– replaced by defined contribution plans

• Workers are not saving enough• Issue gaining national attention

– but no national solution, left to states

Access to a Savings Plan at Work

WOODSTOCK INSTITUTE | JANUARY 2014

Participation in a Plan at Work


Sources of Retirement Income, 2010


Social Security Replacement Rate


Retirement Account Ownership,by Age, 2010


Amount in Retirement Accounts,by Age, 2010


Individual Retirement Account Balances, by Age, 2010


Policy Implications


• If nothing is done– many retirees will face decreased standard of

living– many adults will need to help support their

aging parents– government will face increased pressure to

bolster the social safety net– business will face diminished investment from

retirement plans

Tailoring to the Illinois Workforce


• Some workers more likely to have access– public-sector– heavy industries– unionized industries

• Some workers less likely to have access– private-sector– high turn-over– low-skill– non-union

Coming Up Short Report (2012)


• Over 2.5 million private-sector workers (53.4%) in Illinois do not have access to a retirement savings plan at work– 315,600 in accommodation and food services– 357,600 in health care and social assistance– 305,500 in retail trades

• Broken down by legislative district

Secure Choice Fact Sheets


Building Support


• Allies and Supporters– Nonprofits, business groups, financial institutions

• Opponents– Insurance industry, certain business associations,

certain financial institutions and associations

• Media– Editorial Boards and national news outlets

• Negotiations – Employee threshold, fund options, ERISA

Messaging


• Speak to legislators– data by legislative district

• Illinois Secure Choice Savings Plan– rebranding from auto IRA

• Cost estimates– least expensive alternative– minimal cost to business

Illinois Secure Choice Savings Program


• Auto-enrollment into Roth IRA– contribution by payroll deduction

• Program run by a seven person board• Funds pooled together

– managed by private investment company

• Default 3% payroll deduction– in age-targeted fund– three other options


November 10, 2015

Using Data to Help Illinois Workers Save for Retirement

Spencer M. Cowan | Senior Vice PresidentWoodstock Institute | Chicago, IllinoisP 312.368.0310 | F [email protected]

@woodstockinst

WoodstockInstitute

mailto:[email protected]

WOODSTOCK INSTITUTE | NOVEMBER 2015 November 10, 2015 Using Data to Help Illinois Workers Save for...

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