“The challenge for the industry is coverage.” To Steve Mitchell, Managing Consultant at BridgePoint Group PPC, that captures the essence of the motivation behind state-sponsored retirement plans. Mitchell made his remarks at a June 21 roundtable discussion at the 2016 SPARK National Conference in Washington, D.C.
“To the states’ credit, more than 30 of them have taken steps” to address the coverage problem, Mitchell remarked. The challenge, he said, is “to find a way that states can work with industry to design these programs and put them in place.”
Courtney Eccles, Program Manager of the Invest in Illinois Secure Choice Savings Program, which the state of Illinois put in place in 2014, said that they are “looking for guidance from the industry” on what is needed.
Mitchell regards the Department of Labor’s proposed regulations which include a rule on auto enrollment as a boon to the states’ efforts, giving states “a clear path” to creating auto enrollment programs for the private sector.
John Scott, who directs the retirement savings project at The Pew Charitable Trusts, emphasized the importance of programs being designed in such a way that they can easily mesh with each other. “One of the key things we want to get across to the states is standardization,” he said.
“In a real world, people would have choice,” said Mitchell, but, he asked, “How does one do that?” He evinced a view that that may not matter so much ultimately, saying, “to the buyer, [the accounts are] all the same. He also said that it is “still a huge success even if the retirement accounts established through state programs are IRAs, since that will at least be something.”
Mitchell did offer a caveat of sorts regarding two matters, however. “The real concern I have for Roths is that there will be people swept into them who are not qualified” to handle them, he said, also commenting that up-front investment is “one of the biggest challenges.”
“To the states’ credit, more than 30 of them have taken steps” to address the coverage problem, Mitchell remarked. The challenge, he said, is “to find a way that states can work with industry to design these programs and put them in place.”
Courtney Eccles, Program Manager of the Invest in Illinois Secure Choice Savings Program, which the state of Illinois put in place in 2014, said that they are “looking for guidance from the industry” on what is needed.
Mitchell regards the Department of Labor’s proposed regulations which include a rule on auto enrollment as a boon to the states’ efforts, giving states “a clear path” to creating auto enrollment programs for the private sector.
John Scott, who directs the retirement savings project at The Pew Charitable Trusts, emphasized the importance of programs being designed in such a way that they can easily mesh with each other. “One of the key things we want to get across to the states is standardization,” he said.
“In a real world, people would have choice,” said Mitchell, but, he asked, “How does one do that?” He evinced a view that that may not matter so much ultimately, saying, “to the buyer, [the accounts are] all the same. He also said that it is “still a huge success even if the retirement accounts established through state programs are IRAs, since that will at least be something.”
Mitchell did offer a caveat of sorts regarding two matters, however. “The real concern I have for Roths is that there will be people swept into them who are not qualified” to handle them, he said, also commenting that up-front investment is “one of the biggest challenges.”
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