Mainers Seek Retirement Security

Maine ranks 42nd for population, for now – and like every state faces a set of both common and unique challenges when it comes to emergency savings and saving for retirement..

We talk with Treasurer Henry Beck, one of five statewide elected officials in Maine, about the work he’s been doing to promote retirement security and increasing equity in the state.

(And of course we get his pandemic silver lining and a few insights from a born Mainer.)

Treasurer Beck, Maine is working on retirement security – give us the latest!

Right now, we are working to take meaningful steps to promote private retirement savings among Maine workers. We are trying to replicate in our own Maine way what Oregon has done, what Illinois has done, what California is also doing. You can learn about our current bill, LD 594, here.

What makes Maine unique in this “retirement security” space?

Let me start with the positives.  Like other states, we have an “unbanked” population. That is a challenge, but Mainers are actually more likely than others in the US to use traditional financial institutions: banks and credit unions. So that's a positive starting point for us.

On the other hand, our savings rate is just not what it should be.

We beat some states, but not others. There is just not sufficient savings for people to retire with dignity. Our wages across the board are not where they should be. And we have higher costs for things like energy and transportation.  That affects what people are able to save or whether they're willing to save. And, near term concerns can eclipse longer term thinking. I think we face that challenge culturally with retirement savings.

Added to this mix Maine also has the highest median age of any state in the country, any state.

The highest median age in the country? We didn’t know that.

Yes. That by itself poses a unique challenge when it comes to retirement planning and retirement savings.

So we have some factors make savings more difficult, but I've also found in promoting this bill, working on this issue across political lines, demographic lines, people understand the need to save. I think by passing legislation and doing some thoughtful work, we could become a leader for Mainers who want to work and retire here.

You’ve had some good partners in the effort so far – inside and outside the legislature.

When I was a legislator, I served in the Maine House of Representatives for eight years. AARP has been a strong proponent of these proposals around the country. They came to me when I was Chair of the Insurance and Banking Committee and asked me to sponsor what we called Work and Save. It’s one of these basic proposals that requires businesses of a certain size to either offer a private retirement savings plan, or if they don't, automatically enroll their employees into a centralized state program.

I led that effort back when I was a legislator. I was not successful!

Fast forward a few years.

As Treasurer, I've had the privilege of working again with AARP and also with a real advocate here in the state, Assistant Senate Majority Leader Senator Eloise Vitelli. Senator Vitelli worked in this space on her own prior to coming to the Legislature and we've been partnered together. We come very, very close with this legislation and then -- like so many other efforts around the country -- we're dealing with the COVID pandemic. So, right now the legislation itself is officially pending, ready to leave committee, ready to get a favorable vote.

Our Legislature adjourned in March following some quick COVID-related legislative activity. Some committees have begun meeting again virtually, and the state Senate was in session last this week working on confirmations. So we’ll see how soon the Legislature is really able to return to a more traditional work process.

Passing legislation – even great legislation – is never easy.

Like so many good ideas it takes patience and time, a lot of communicating and a lot of listening to assuage the automatic concerns people can have. At the same time, the more people learn about it, the more they believe in the importance and the value.

And there's an urgency, right?

There's an urgency to get the program up and running and making a difference for people here.

How does something like this link to equity and opportunity in Maine?

One goal of this retirement security program is to reach people that for whatever reason, whether it's economic or cultural, are just not inclined to walk into a neighborhood office of a private firm. There are many who fit this description -- it just wouldn't occur to them. They're just not comfortable.

But they will save into a financial account at work – a retirement account – if it’s easy enough to do it.

If we can reach people that would find it difficult to save under other circumstances, we give them a chance to participate. I believe anything that brings different populations into the saving space and participating in an open, transparent financial markets, increases economic equity.

The pandemic has been challenging for everybody, any silver linings where you are?

That's an interesting question. We're still in the middle of it, right? Think about what we have learned and what we didn't know just a few months ago about the virus and how it would affect our economies and state governments. As a cheerleader -- and that's part of my job -- we're starting to see positive impacts on our real estate market. I think there will be a desire to live in places like Maine that lack population density, that have very good management and good, solid public health responses. And we are fortunate that some inherent characteristics about the state have helped us experience a very low COVID positivity rate.

That’s interesting!

I think people will consider Maine as a very good place to live and work remotely. (As they do that we have to beef up our broadband infrastructure.) I've always said that Maine is a great place to grow up. It's a great place to go to summer camp. It's a great place to go on vacation. It's a great place to go to college.

The struggle, always true but heightened in recent years, is you see more economic activity in the real urban centers. That makes it a difficult place, especially for young workers, to work in the industries that they desire and make the wages that they need. It's been very hard for us to compete with the Route 128 corridor around Boston, for example, and what they offer in tech, fintech and biotech.

So as attitudes change about what makes a suitable place to live, there may be more economic opportunity for the state, if we can meet some very basic challenges.

Well, that sounds like a pretty good silver lining. Tell us about your summer fun this year.

My family has a place in Maine. It's funny, as Treasurer I meet with a lot of people from out of state. They come in to see us during normal times, and they always talk about the beautiful Maine coast -- and the Maine coast is very beautiful. And I want people to come and visit!

… it’s hard to complain about summer in Maine!

But the Deputy Treasurer, Matt Colpitts, and I joke that we were “interior kids”. We grew up in the center of the state, not on the coast. So my family has a cabin on a lake in Maine. I've been able to spend some time there. And my sister who lives out West and her family came to visit us for a few weeks (after they got their COVID tests!) So that's been fun. You know, even in these very difficult times, it's hard to complain about summer in Maine.

Now you’re just making us jealous. What else haven't we talked about?

I’ll say this, as an anecdote. In the past several months I've been on calls with state treasurers and other very accomplished people, providing us with a range of briefings. And they have all said, We know that state and local governments really need some fiscal relief and another round of the CARES Act. And we honestly believe that Washington will do it. It might take them awhile to get there, but we just can't imagine they won't pass another relief package.

And so far they haven't, and it is frustrating. I know things can happen quickly in politics, and I would be remiss if I didn't use the opportunity talking to anyone, to understand how vital it is that the US Senate gets together and passes a new relief package for taxpayers individually, for businesses, and also for state and local governments.

Treasurer Beck, thank you so much for sharing your time, insights, and energy with us. Do you want to connect with the Treasurer on these or other topics? Catch up with him by email here and on social at @HenryBeckMaine. You can also learn more about the Maine State Treasurer’s office and the terrific work of the Treasury team here. Read our recap and more about retirement savings innovation here.

This piece was featured in the September 10, 2020 edition of Retirement Security Matters. For more fresh thinking on retirement savings innovation, check out the newsletter here.