Illustrious Illinois: Three Years In, Expanding Access

Courtney Eccles, we've been wanting to do this interview with you for a long time. You've been involved with Illinois Secure Choice since before it began. Tell us how you got started.

I'm really excited about this interview too. I’ve been working on Secure Choice with the Treasurer's Office for nearly six years and before that I had the opportunity to work on the program’s enacting legislation.

At that time I was the policy director for Woodstock Institute, a non-profit in Chicago that works on fair lending issues, access to financial products, and policies related to the racial wealth gap. We were one of the organizations that championed Secure Choice with the Illinois General Assembly. I worked closely with our bill sponsors and helped get the bill across the finish line.

I then had the opportunity to join the Treasurer's Office to work on the creation, development and implementation of the program, all of which was new for me. I'm a policy person by background. So stepping into state government and actually creating the program was a really fun and exciting challenge.

We think that path makes you unique among your peers. Would you agree?

Maybe in some ways. I think there is a small cohort of folks who have been on both the legislative and the implementation side. But yes, what it meant in the early days was that if anyone ever wondered why the legislation was written a certain way, all eyes would turn in my direction. And usually the answer was, well that got us a vote here, and this got us a vote there.

We've made some tweaks along the way once we got things moving, as folks usually do with a brand-new program. And here we are, three years following our launch. So, it's going all right I'd say!

We can't believe the three years have passed so quickly. Tell us, what are some of the key characteristics that make the program appealing to users.

In my mind what makes Secure Choice unique and interesting is how easy it is. We really focus on making this program simple for employers to facilitate and easy for workers to save. That thinking is at the core of every decision our board makes, and every decision our staff makes. We use automatic enrollment with 5% contributions from saver paychecks into our default investment option.

We focus on making our communications simple and easy to understand

by providing clear directions and using language that makes sense to folks who may not be retirement or investment experts. We also work closely with Illinois associations and employer groups. At the end of the day, a lot of the employers that we work with are members of those groups and often go to them for information first.

Ultimately we try to make the program easy to understand, easy to be a part of, and really simple for our employers to facilitate.

As you mentioned, you are also close to a three-year statewide milestone. How are things going?

Really well! Yes, we’ve been live for three years, including our pilot period, and we're approaching the three year anniversary of our first wave deadline this fall. At the moment we've got just over 90,000 savers in the program, and a little over $67 million in assets under management.

And you know, I think one of the biggest things as I look back is that we successfully launched and navigated our way through the pandemic.

Nobody knew what to expect, but our program grew every single month throughout the pandemic.

It might've been slower than our early launch waves, but we were adding new employers and new savers every single month.

Illinois Secure Choice is currently working with just over 6,000 registered employers in the state and we’re excited to work with many more employers in the near future, facilitating automated retirement savings access for so many more workers. So -- great news for the first three years and a lot of really exciting growth to come.

Well done! Your program initially applied to employers with 25 or more workers. Why was it important to expand coverage to those with five or more?

I'm incredibly excited about the success we had this spring for the benefit of Illinoisans. The General Assembly passed legislation that will expand access to Secure Choice for employees of companies with 5-24 workers.

You know, the 25 or more threshold in Illinois was really part of the initial legislative compromise. It was one of the decisions that we made back in 2013 and 2014 when we were working to pass the original legislation.

At that time many folks were still quite uncertain how things would go. These programs didn't exist yet. Nobody really knew what to expect. And I think a lot of people assumed that this type of program, this type of requirement for employers, would just be a little bit harder on smaller businesses.

That’s interesting – what’s changed?

What we've learned since then is that these programs aren't really a burden on any employer regardless of their size.

It doesn't take much work by the employer. The systems that we have in place don't require much once you've registered. It takes a minimal amount of time for an employer to get things set up and then to make the reoccurring contributions whenever they run their payroll. And the benefits of helping workers save are just too significant to ignore.

As we moved through our three waves we gathered feedback from employers and continued to improve our processes, reducing friction wherever we see it. So for us it just felt natural to say, now that we know this isn't an issue, we still have nearly a million workers in the state who are not covered because they work for smaller employers and don't have access to an employer sponsored plan.

It felt pretty straightforward to go back to our General Assembly and say, these programs work, employers like them, or at least aren't bothered by them, and it's making a huge difference for workers. So we should close our access gap and lower the threshold down to five employees. It makes us consistent with the other states that are up and running. And I think it sets a good message for states that are also considering these programs.

That makes a lot of sense. How easy was it to get the attention and agreement of legislators?

This was a big priority for Treasurer Frerichs and something we had hoped to do in 2020. Then of course we had a very abridged legislative session because of COVID. After careful consideration we came back this year with still the same committed energy to expand this program. We know it's the right thing to do, and it's actually really helpful for smaller employers.

I also think there was recognition across our state, and across the country, about the importance of having some type of savings and the role that the program could play to help folks do that.

We were able to point to the savers that we had in Secure Choice and to say, look, these folks work for restaurants, grocery stores. They are among those who are absolutely on the front lines and who in many ways have been hardest hit. And we feel really confident that the people who've built up a nest egg over the past three years are probably in a better position than people who haven't had that opportunity.

So having that on top of the proof of concept from the program was really helpful.

Tell us about some of the key parts your legislative approach.

As we brought this forward to legislators, we met and talked with the same business groups and employer associations that we've worked with since launching Secure Choice, and since the initial legislation. A number of them were not necessarily supportive of the original legislation creating Secure Choice. But they told us they don't hear much from members, meaning they are not getting negative comments or complaints from employers.

So, that's a good thing. That's a positive. It means that folks aren't upset or bringing concerns up to these associations. And that’s enabled us to work closely with a lot of business groups across the state.

We wanted to expand the program, but we also wanted to make sure we did it thoughtfully to give smaller employers a lot of notice. Through conversations, we were able to add a few amendments to our bill that spaced out when the deadlines will be for smaller employers. Those changes brought many groups to neutral. If you do legislative work, you know that neutral is a really good change from opposed!

This allowed us to get bipartisan support both in our House and in our Senate. To me, this outcome is a sign of the work, the relationships, and the understanding that these programs work. They make a difference and we’ve learned they aren't difficult or burdensome where folks might have thought that initially.

There is recent research from Pew that shows new plan formation is rising in Illinois following the launch of Illinois Secure Choice. Does that surprise you?

No, it doesn’t surprise me. And I think it's good news!

We have heard a concern that somehow these state programs are direct competitors to the private sector. That states are moving into areas that could negatively impact plan providers who already work with businesses today. Frankly, what we're seeing with the research from Pew is that actually they're quite complimentary.

At the end of the day, a state program like Illinois Secure Choice, or a state law that says to employers, ‘Hey, you should either offer your own plan or facilitate the state program’ creates a huge opportunity for growth.

How so?

Some employers aren't going to offer their own plan because of costs, administration, what have you. They'll go with a state program. But I think this type of requirement leads a lot of employers to say, ‘I was thinking I should maybe offer a 401(k) anyway, let me talk to my financial advisor or my accountant.’ Many of these employers end up going the route of offering a 401(k) or a SIMPLE IRA.

For us, closing the access gap is about closing the access gap, whether that's through a private sector plan or through the state program. We’re happy to see this private sector success. It means we're continuing to make a difference and chip away at the folks who haven’t been able to save for retirement from their paychecks.

So that sounds like a win, win, win. We get to close with our light question – what’s the summer of 2021 bringing for family fun?

We’ve had some summer family fun already! My husband, kids and I went down to visit his family in Oklahoma. The kids hadn’t seen their grandparents in over a year. So that was super fun. His family has some land out in the country. We ran around in the dirt, got messy, enjoyed the outdoors. That was great for everyone.

Otherwise we are thrilled that the local pool is open again –  it was closed all last summer. We’re spending as much time there as we can, getting our boys fully up to speed on their swimming. And we’re enjoying -- at least right now – some Midwest weather that is not a crazy intense heat. Keeping cool!

Very refreshing! Thank you so much for sharing your expertise with us Courtney.

Want more? You can connect directly with Courtney Eccles here. You can follow Courtney’s work at Illinois Secure Choice and connect with the program on Twitter, Facebook, and LinkedIn.

This piece was featured in the July 15, 2021 edition of Retirement Security Matters. For more fresh thinking on retirement savings innovation, check out the newsletter here.