Next Generation: Ascensus puts its experience to work

A long-time friend of State Auto IRAs, Peg Creonte is responsible for setting the vision and strategy for Government Savings at Ascensus and charting its course for future growth. Peg joined the company in 2004 and has served in leadership roles across business development, platform development, and system implementation. Scott Parry recently joined Ascensus from Citizens Bank where he led digital transformation initiatives for Citizens Wealth, following roles as General Manager of Ameritrade Retirement Services, CEO of Aon Hewitt Financial Advisors, General Manager of FIS Retirement Solutions, and President of Reliance Trust.

A “close connections” note – our founder, Lisa Massena, worked for Peg at Ascensus in 2018 and 2019. It is a small industry, friends! We think you’ll like this fresh perspective

Peg, you’ve been involved in the Auto IRA space since before the first program went live. What do you like about what you see today?

Peg Creonte:  I would say the most exciting thing as someone who's been involved since 2016 is the proliferation of programs, legislation and studies. I think when we were all sitting around a conference table talking about this idea, we all really believed it could move the needle on retirement savings. And it's just so exciting to see it come true.

We thought that if people were offered an easy way to save for retirement at work, most would take it. And we can really make a difference for people by offering them a simple way to save through their employer.

So I think it's great to see that intuitive gut feel we all had start to play out.

We have to agree! We like that too. Scott, you are new to Auto IRAs. What do you think we should be paying attention to as this space continues to mature?

Scott Parry: Early on the process has been focused on working with employers to help them become aware, answer their questions and get them registered, and also to help their employees sign up. If we’re successful, eventually, we're going to have a lot of savers.

Those savers will need some help beyond just having an account. In a prior role, I ran the Financial Wellness Center for a large 401(k) provider that services over 5 million participants. We offered a wide range of financial education and wellness programs, both online and through a call center.

We observed that even middle-income employees would run into financial difficulties along the way. We were helping people think through the financial tight spots and keeping them focused on their goals for the future so that they could create balance and give some priority to each.

Because we have been so focused on employers, Auto IRA programs have not yet focused deeply on financial wellness for savers– it’s natural for where we are in the life cycle. But as the programs grow, I expect we will see an expansion of financial wellness services and tools – like those you see and those I’ve led in the private sector – that support the savers in these programs.

Interesting. Do you see a future point where the program economics will naturally need to focus more on savers than they do on employers?

PC:  I think that there's always going to need to have a real focus on employers. Certainly, the heaviest lift is that initial facilitation, that initial registration activity with employers. The dynamics of small businesses means there are constantly new, small businesses coming online and we're always going to have to keep a focus on that employer experience.

That said, as programs grow and savers begin to have meaningful balances, that's where we're all going to have to think about additional functionality and saver support.

SP:  Thinking ahead, we will have a large population of savers to serve. The reality is that after just one year, CalSavers by itself would rank in the top 15 401(k) plans in the country based on the number of participants.  

Before we know it, there will be billions saved and invested through these programs, and to support these savers and to keep them in the program, we will have to offer services that are just as good as the services competing IRA providers are offering outside of the plan. That means we will need to offer excellent planning tools, a range of calculators and good call center support to help participants keep progressing toward their goals.

Peg, can you share some of what you’re learning as you work with CalSavers, as we noted likely to be the largest single Auto IRA, through their June 30 deadline for small employers?

PC:  We learn something new every week in this business. It's a brand-new industry where we're thinking ahead, responding and adjusting together continuously. The sheer scale of California accelerates that learning.

One of the things to consider is how your rollout strategy to small businesses impacts your provider’s service organization and staffing. With each of your deadlines and with communications, you are driving spikes in calls to the service center.

For our clients, we are the face of their program through our servicing organization. We take that incredibly seriously. Anytime we are administering a program with deadlines for thousands of employers, we carefully consider anticipated service volumes. We plan for that and execute to that plan so that those initial touchpoints with the program, should they come in through our call center, is a positive experience. Certainly the scale that California has helped us to get really good at that. And both the CalSavers and Illinois teams have been terrific partners in working through these rollout strategies together, which we appreciate.

Along these lines, a best practice for states is to set up your employer waves so that they contain roughly equivalent volumes of eligible employers. And they should be not too far apart – closer together helps you maintain employer attention and a consistent flow of new employers coming onto the system.

Scott, we know Ascensus has been cooking up some good stuff. Can you talk about any of your recent innovations for Auto IRA?

SP:  Yes, there are! As a first mover, it’s important to keep our offering fresh. Along these lines we've invested significantly over the last several months completely renewing our employer experience. This includes the registration process, and our payroll integration functions – to keep it simple for employers, these are very important.

Our Paychex integration is working very well. We are pleased to share that we’re rolling out an integration with QuickBooks in the next couple of weeks as well. These two providers, Paychex and QuickBooks, represent a very large percentage of the small business market. In addition there are other payroll providers with whom we’ve got two-way integration.

The experience for the employer when you have an automated payroll integration, or 360-degree two-way integration, is radically different on an ongoing basis. Without it, employers have a relatively light lift, but it does involve maintaining employee roster information to ensure new employees are added. It also includes calculating and remitting correct payroll savings amounts for employees as they maintain or change their savings rates.

With 360-degree integration, employers enroll initially and set up their key information one time. But after that, they're not allowed to touch anything. Everything comes from the payroll company. Employers don't have to enter their employees. They don't have to go in and process changes to saver deferral rates. It's such an easy process for them.

If we can keep processes really simple for businesses, the general feedback in the industry will continue to be positive.

We love the innovation in this space – Peg and Scott – thank you for sharing. It’s time for our final (fun) question. Buckle up! We’ve got to know: where did you go on your last vacation and what did you like about it?

PC:  Our family loves the outdoors. I went skiing in Colorado … and a day skiing with my family is about as perfect a day as I can imagine. 🎿

SP:  It's been so long under COVID since we went anywhere! Our last ‘away’ vacation was to the Bahamas and we loved it. Eleuthera is a 100 mile long island, maybe a mile wide. Basically there are  200 miles of beaches on this one island and there's nobody on any of them. Every day we picked a new beach and my wife and I would be the only ones on the beach. Priceless.

We’ve hung up our ski boots until next season … yes please, sign us up for the beach!

Thank you for your insights, Peg and Scott! Want more? You can connect directly by email with Peg or Scott and you can follow their work at Ascensus here.

This piece was featured in the June 9, 2022, edition of Retirement Security Matters. For more fresh thinking on retirement savings innovation, check out the newsletter here.