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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 312.368.0316scowan@woodstockinst.org
@woodstockinst
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 PresidentWoodstock Institute | Chicago, IllinoisP 312.368.0310 | F 312.368.0316scowan@woodstockinst.org
@woodstockinst
WoodstockInstitute
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