Grant’s Go-To’s: OregonSaves’ Michael Parker and NYC’s John Adler Share SFRP Lessons Learned

In my last Retirement Security Matters piece, School’s Back in Session – How states share lessons learned, I raised questions about how ideas are shared by the people working most closely on retirement security initiatives.

As a follow-up I thought it would be interesting to speak directly to some of the people working on state-facilitated retirement savings programs (SFRPs) and ask them about lessons they’ve learned from others — and the lessons they share with those who ask.

Recently, I was able to speak to OregonSaves director Michael Parker. OregonSaves began operating in 2017. As of August 31, 2021, the program reports $131 million AUM, more than 17,000 registered employers and 112,000 funded accounts.

I also spoke to John Adler, New York City’s Director of the Mayor’s Office of Pensions and Investments. Earlier in 2021, the New York City Council voted to create a program for the city’s private sector employees who lack access to plans at work. The program is on hold pending the outcome of legislation that would add automatic enrollment and an employer mandate to the state Secure Choice plan established by the New York Legislature several years ago.

Aside from reading RSM (that’s a given!), I asked Michael and John about the extent to which they keep in contact with colleagues across the country to stay abreast of relevant developments.

Michael speaks frequently to people in other states whose proposals or programs are in various stages of development and learns a lot from them. He indicated it’s been particularly helpful to keep in touch with his counterparts in California and Illinois as all three were developing and implementing similar programs at roughly the same time.  

With respect to advising people from other states, Michael says he avoids being overly prescriptive because he recognizes each state has different opportunities and constraints. States also have different populations of employers and workers that vary in terms of their needs and expectations. Rather than tell others how they should be doing things, he focuses on sharing his own experiences with OregonSaves.

John worked on pension and retirement issues for Service Employees International Union (SEIU) prior to joining the NYC Mayor’s Office and has been engaged in national conversations on retirement security for a significant amount of time. He says he has learned not only from counterparts working on similar programs, but also through contact with academic and industry experts working to support state initiatives.  

Employer outreach is key!

When asked about some of the lessons he and his colleagues in New York City have learned from others, John highlighted the importance of prioritizing communications with employers. Michael emphasized the same point, noting that in the early days, OregonSaves spent a lot time and money trying to get the word out to workers statewide. “General awareness is great,” he acknowledged, “but it doesn’t necessarily drive people into the program.”

Employer engagement, according to Michael, is where you get the biggest bang for the buck. If the employer doesn’t know about your program and doesn’t register to facilitate, workers lose the simplicity of automatic enrollment. According to Michael, “Employer engagement drives participation.”

Michael explained that OregonSaves’ employer communication strategy focuses on the three aims of: (1) awareness – ensuring employers know about the program; (2) educating employers about their responsibilities; and (3) providing employers with information about where to go for help when they need it.

Consider a shorter roll-out period

Another lesson Michael shares is that a relatively short employer onboarding period might be beneficial. OregonSaves was rolled out to employers over a period of three years in 6 separate “waves” with deadlines for employers of gradually smaller sizes. It was a long process, and the experience taught Oregon staff that regardless of deadlines, employers sign up in a steady trickle and not all at once.

Michael suggests that if Oregon had it to do over again, he might use a more compressed 18-month onboarding period with three waves of participation. He mentioned that when the OregonSaves legislation was passed, it generated a lot of buzz. Michael recommends program staff in other states try to capitalize on the initial attention and maintain momentum with a shorter onboarding period.

Try to “get it right” the first time

While it is certainly possible to return to state legislatures with proposals to make changes or additions to the original laws establishing state-facilitated programs, doing so can be a lengthy process with uncertain outcomes.  

Illinois Secure Choice managed to successfully lower the size threshold for their employer mandate this year after a similar proposal was held up in 2020. A proposal to include automatic enrollment and an employer mandate for New York State’s Secure Choice program was passed by the Legislature in 2021 but is still awaiting the Governor’s signature.

Michael revealed that the lack of specificity with respect to employer compliance in Oregon’s initial bill made it necessary to pursue subsequent legislation. Based on Oregon’s experience, he recommends states work to make sure employer compliance, and the mechanism for sharing data with state entities that maintain workforce data, are specified in statute.

Even though it is certainly desirable to “get it right” the first time, John cautions against letting the pursuit of the perfect be the enemy of the good. “The important thing is to get a program passed and started,” he shared. “You can go back to the legislature to make changes if necessary.”

Additional words of wisdom from Michael and John

Michael indicated that he often receives questions about start-up costs. Programs in development now have the benefit of being able to see the actual budget numbers from states with established programs. Michael’s feeling is that it doesn’t need to be significantly expensive to launch a state facilitated program, and that it can be accomplished with a handful of staff to support a board, execute an outreach program and handle related administrative tasks. 

One piece of advice John shares is that the legislation establishing state-facilitated programs should not be overly prescriptive when it comes to program design and investment option considerations. Many of those details are best left to a board to determine with input from stakeholders, staff and expert consultants.

Many thanks to Michael Parker and John Adler for taking the time to speak to RSM and share their experiences and expertise for the benefit of all who are working on retirement security initiatives.

— Grant

This piece was featured in the October 7, 2021 edition of Retirement Security Matters. For more fresh thinking on retirement savings innovation, check out the newsletter here.