WOODSTOCK INSTITUTE | NOVEMBER 2015 November 10, 2015 Using Data to Help Illinois Workers Save for Retirement Spencer M. Cowan | Senior Vice President.

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Presentation transcript:

WOODSTOCK INSTITUTE | NOVEMBER 2015 November 10, 2015 Using Data to Help Illinois Workers Save for Retirement Spencer M. Cowan | Senior Vice President Woodstock Institute | Chicago, Illinois P | F WoodstockInstitute

Overview – A Multi-facted Effort WOODSTOCK INSTITUTE | NOVEMBER 2015 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 WOODSTOCK INSTITUTE | NOVEMBER 2015 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 WOODSTOCK INSTITUTE | NOVEMBER 2015

Sources of Retirement Income, 2010 WOODSTOCK INSTITUTE | NOVEMBER 2015

Social Security Replacement Rate WOODSTOCK INSTITUTE | NOVEMBER 2015

Retirement Account Ownership, by Age, 2010 WOODSTOCK INSTITUTE | NOVEMBER 2015

Amount in Retirement Accounts, by Age, 2010 WOODSTOCK INSTITUTE | NOVEMBER 2015

Individual Retirement Account Balances, by Age, 2010 WOODSTOCK INSTITUTE | NOVEMBER 2015

Policy Implications WOODSTOCK INSTITUTE | NOVEMBER 2015 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 WOODSTOCK INSTITUTE | NOVEMBER 2015 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) WOODSTOCK INSTITUTE | NOVEMBER 2015 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 WOODSTOCK INSTITUTE | NOVEMBER 2015

Building Support WOODSTOCK INSTITUTE | NOVEMBER 2015 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 WOODSTOCK INSTITUTE | NOVEMBER 2015 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 WOODSTOCK INSTITUTE | NOVEMBER 2015 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

WOODSTOCK INSTITUTE | NOVEMBER 2015 November 10, 2015 Using Data to Help Illinois Workers Save for Retirement Spencer M. Cowan | Senior Vice President Woodstock Institute | Chicago, Illinois P | F WoodstockInstitute