1. Shriver Center on Poverty Law Universal Voluntary Retirement Accounts Webinar The Economic Opportunity Institute’s efforts to promote Washington Voluntary Accounts Gary Burris Senior Policy Analyst December 14, 2009

2. Inception of the Idea Dean Baker began working with EOI in 2000 to develop the concept of voluntary retirement accounts EOI met with stakeholders, conducted research and developed policy briefs Legislation was introduced each year between 2002 and 2009

3. Plan Sponsorship by Employers

4. Importance of and Access to Retirement Plans SBART (Small Business Annual Retirement Trends) Survey for ShareBuilder, conducted by Harris Interactive, October 2007

5. Effect of 401(K) On Retention In a survey only 16% of small business employers felt a 401(k) would make a difference in retention. 39% of employees said they would leave their current job with no 401(k), for a job that offered one, all else being equal. SBART (Small Business Annual Retirement Trends) Survey for ShareBuilder, conducted by Harris Interactive, October 2007, p. 54

6. Reasons Cited for Not Offering a Retirement Plan Revenue is too uncertain/too low 27% Costs too much to set up and administer 16 Employees not interested 12 Too much goes to short-term employees 12 Business is too new 7 Business is too small 7 Required company contributions too expensive 6 Not interested/no need 4 Administration is too burdensome 3 Employees prefer wages 3 Employees have benefit through spouse’s work 2 Fact Sheet: Small Employers Without Plans, from the 2003 Small Employer Retirement Survey, Employee Benefit Research Institute, June 2003

7. Factors Leading to Serious Consideration of Offering a Retirement Plan Much Somewhat No More Likely Increase in business profits 34% 39% 25% Plan that requires no employer contributions 30 37 32 Business tax credit for starting a plan 23 43 31 Availability of easy-to-understand information 20 35 45 Plan with reduced administrative requirements 20 37 41 Greater tax advantages for key executives 18 34 46 Greater tax advantages for employees 17 41 40 Plan customized for the needs of the business 16 44 40 Demand from employees 15 40 44 Allowing key executives to accumulate more in plan11 32 55 Fact Sheet: Small Employers Without Plans, from the 2003 Small Employer Retirement Survey, Employee Benefit Research Institute, June 2003

8. www.eoionline.org Washington State Solution: Voluntary Savings Accounts Defined contribution plan Tier 1– IRAs for individual workers Tier 2 – Simple IRA Pre-selected menu of investment options Administered by state

9. www.eoionline.org Advantages of Retirement Accounts for workers Payroll deductions Portability between jobs Low costs – economies of scale Simplicity – pre-vetted options

10. www.eoionline.org Advantages to Small Businesses Easy administration Low cost Allows small firms to provide retirement plans

11. Washington Business Owners Survey Interviews were held with 24 small business owners from all parts of Washington State. Businesses of different sizes were interviewed, including 17 with 1-10 employees, 6 with 11- 50 employees, and 1 larger than 50. All but two supported the idea of Washington Voluntary Accounts (WVAs). EOI Interviews Small Businesses about Washington Voluntary Accounts, Economic Opportunity Institute, 2006.

12. Washington Business Owners Survey Businesses wanted a program that: – had diverse options, – support for employers and employees such as a hotline or website, – promotion in the workplace so the employer isn’t totally responsible, and – a portable account. EOI Interviews Small Businesses about Washington Voluntary Accounts, Economic Opportunity Institute, 2006.

13. Meeting the Concerns of Small Business in Washington State Washington Voluntary Accounts are envisioned to meet many of the barriers employers’ cite including: reduced administrative costs easy to understand information optional company contributions, and a plan customized for the needs of small business

14. www.eoionline.org VAs will help the private investment industry States will contract with private companies Pool of investors will increase Over time, people will roll over Washington Voluntary accounts into accounts with private firms How will Washington Voluntary Retirement Savings Accounts affect the private investment industry?