OregonSaves Turns Five: That Was Fast.

We talk today with the dynamic trio that are part of the OregonSaves team led by Michael Parker in the offices of Treasurer Tobias Read – an advocate for family financial wellness in Oregon. This trio includes David Bell, Deputy Director of the Oregon Treasury Savings Network, who first joined to help launch Oregon’s ABLE savings program. Sabra Purifoy, Operations Director for the Oregon Treasury Savings Network, manages the operational functions of the division and all of the program's savings plans. And Renzo Meza, the team’s newest addition, leads Outreach, Strategic Partnerships, and Education.

Our founder Lisa Massena roundtables with a few of her OregonSaves colleagues about bright futures.

David Bell, Sabra Purifoy, Renzo Meza. OregonSaves launched its pilot almost exactly five years ago and went live statewide in January of 2018. What does that feel like today?

David Bell: Honestly, a little overwhelming in all of the positive ways Lisa. I think you, out of everybody, would understand what an undertaking it was to launch a state run program like OregonSaves.

At the early stages, there were a lot of individuals that were questioning how this would work. Some thought it was an interesting approach. Not everyone loved the idea. And there were a lot of individuals, early on, that paid no attention to it.

Blink! And here we are today, five years in. I believe that we can really see what a success this has been. We have had a real opportunity to see individuals who were not saving before, and how OregonSaves has positively impacted their lives.

I feel like this concept has gone from being a great thought experiment about how to make a meaningful dent in the retirement savings gap, to a pragmatic solution that just works. If you give people the ability to save alongside their paycheck, they do it, and they want to do it.

It feels really good. It started with Oregon launching first with Illinois and California launching soon after. And now we're seeing this real momentum behind the idea with ten states implementing programs and two more bills on Governor’s desks for signature.

It just feels like, Hey, we're not alone anymore. We've got friends in this and we're excited to support them along the way.

Awesome. Sabra, I see you smiling.

Sabra Purifoy: I agree. I've been with the program going on two and a half years now. The industry growth that I've seen since I became a part of this world is really exciting. I'm just really proud of the work we're doing to lead Oregonians and others in this space. Seeing that so many states view this as a feasible opportunity to provide important retirement savings options for their residents is just really, really amazing. It's wonderful to be a part of that.

I love that. And here's where I veer off script. Renzo, you're the latest member of the team, what attracted you to this space?

Renzo Meza: Yes. I come from a non-profit background. I've always been interested in personal finance and economic empowerment. I was trying to do more of that work at the local community level, but when my position opened up at OregonSaves, I saw the opportunity to do financial empowerment work at scale and on a statewide basis. This is the place to be.

It’s been very exciting. I enjoy that through my conversations with folks participating in OregonSaves, the feedback has been really positive and constructive.

David, looking back, what are some of the highlights that come to mind for you?

David Bell: I’ll admit for me it started with feeling overwhelmed. I'll call that a highlight just because these programs are really intricate. There's a lot of details operating behind the scenes.

Getting situated. I focused on getting a grasp on how this needs to work for the employer, for the employee. How do we communicate, and what is important to our stakeholders at which points in time? I appreciate that as we are communicating with employers we begin to truly understand their needs and how they're running their businesses and engaging with their employees.

That has given us an opportunity to provide feedback to the program manager about what we can do to tweak the systems, to make employer involvement a little bit easier, a little bit more efficient and effective. Employer simplification is a highlight. The vast majority of employers that begin to facilitate OregonSaves do so without us even having to interact with them.

Employer support. The heavier work is with the employers that are a little confused, providing them with direct support. We also engage with the employers that just don't want to be part of it. And we remind them yeah, actually you need to be facilitating OregonSaves or you need to offer some other qualified retirement plan.

We have taken the time to literally pick up the phone and call the employers that were out of compliance, but we're seeing the vast majority are coming into the program the way that it was always intended. We still have work to do. But helping our employers achieve compliance has been a big highlight as well.

Interstate collaboration. And lastly, the greatest thing about this savings program, along with the Oregon College Savings Plan and the Oregon ABLE Savings Plan, is that we operate them in a very collaborative states environment. I’ll say that OregonSaves led us to a place of even greater inter-state cooperation.

The states with similar programs work closely together to identify the best practices associated with these programs, to make tweaks and adjustments, to share ideas and thoughts. There is nothing that's off limits in our discussions. We literally just want to get more people saving. And that has been a huge highlight because it leads to better approaches for everyone.

Sabra, you mentioned that collaboration early on, are there some highlights for you as well?

Sabra Purifoy: David took the words right out of my mouth. The element that stood out for me from the beginning was the collaboration between the states. I've been on the ground floor, building programs with government agencies, for many years. This is the one program I've worked on where you really see cross-state participation and partnership. You have people coming together to roundtable, to brainstorm, to build out very successful programs that benefit the people we're serving.

Of course, the biggest highlight is the opportunity to see people start saving who have not saved in the past. For all of us, that's probably the number one reason we love this work so much.

Association support. David Bell: Sabra, you’ve reminded me of another highlight. Lisa, you remember the hard work that you and Joel Metlen put into engagement with business associations and business representatives. You might not know this: as we were working on compliance-related legislation after program launch, we literally had the farm bureau testifying in support of building in good compliance. From the very beginning, this program engaged all stakeholders. Even when we knew the opinions of some of those stakeholders might make this program a little bit more difficult to launch, we took their comments. We took the approach that we needed all insights in order to ensure we were ready, that we weren't somehow caught on our back foot. So, to see in person a member of the farm bureau testify in support of our program compliance bill because of the collaborative spirit of how this program was established, that that was a big highlight.

That’s so cool, David. And *thank you* for mentioning some of the folks that have been involved over time.

David Bell: Yes – we send a shout-out to the early team: yourself as the original director of the program, Joel Metlen, Kim Olson, James Sinks, and many others. Today our team includes Executive Director Michael Parker leading the charge, and we are fortunate to have the statewide leadership and support of Treasurer Tobias Read and his team. Treasurer Read is well known for his commitment to family financial security here in Oregon, which includes the rest of the Oregon Treasury Savings Network – ABLE and College Savings – as well.

We’re looking forward – things are going well and you’re enjoying a steady operating state. What are your next priorities?

David Bell: We do have some immediate priorities. Renzo, can you talk about some of the soft compliance communication that we're doing?

Compliance focus. Renzo Meza: I’ll start here. Throughout COVID and over the last two years, our Oregon businesses have been dealing with a lot. We intentionally took our foot off the gas with regard to any sort of compliance communication related to OregonSaves because we knew employers were dealing with other things.

Now, as businesses are regaining their footing one of our most immediate goals is catching up with employers that are part of rollout waves one through five but who may not have taken their action steps yet. We’re reminding them about OregonSaves, reminding them about the benefits of this program, how it works, and of their responsibilities. We are working to do all of this in a way that's manageable for employers because we are sensitive to their circumstances.

Not long ago we started reaching out to employers who are in different phases of facilitating OregonSaves: registration, providing workforce data, and preparing for regular payroll deductions. We’ve been focused on giving them a reminder, answering any of their questions, and providing support as needed. We've also launched webinars for both employers and savers to walk them through how the program works from their perspective and to answer their questions. For us this is another way to be present in the mix of all the remote work that's going on and everything that's going on.

David Bell: That's happening right now. Renzo has built out a really strong strategy and a series of communications to not only remind employers that, yes, this is something you are required to facilitate or to opt out of (if you do offer a retirement savings plan). We are offering the webinars Renzo mentions in several versions. These include basic information for you as an employer, as well as deeper dives into how payroll processing works. It’s pretty simple, but sometimes the personal support helps.

Process changes. We’ve also made some practical enhancements to the registration flow for an employer. We recently took out the staged process we used to use where employers would register, then return within 30 days to upload their employee roster, and then return in another 30 days to start the payroll deduction process for employees who chose to save. Employers are now basically doing all three things in one step.

Now, there is still the 30-day notification period for employees so that they can make changes to their savings or opt out if they choose. Employers are not deducting from payroll right away. But we’ve changed things so employers never feel as though they're done until they've completed the simple end-to-end process. And we believe that's helping employers get over the finish line.

2023 – Wave 6. In early 2023 OregonSaves will be launching Wave 6. We put that one on pause during the pandemic. As with any wave deadline and support activity, it takes some lead up and employer reminders.

Interestingly, we have a big chunk of the smallest employers facilitating OregonSaves even though their deadline hasn’t hit yet. They've already jumped in because they see facilitating retirement savings as a value and important.

Emergency savings. Without getting into much detail, I’ll share that we are also having lots of conversations around emergency savings. This could be emergency savings that either is or is not held within the IRA account, yet it's still part of the OregonSaves program. We have a number of key stakeholders, research organizations, and others that want to help us solve the “how” associated with retirement-linked emergency savings. We just want to make sure we're thinking about it holistically. This will be another big focus for 2023.

Exciting stuff. Refresh us – which employers are included in Wave 6, and when?

David Bell: Wave 6 covers employers with four or fewer employees. We are expecting to confirm an employer data in the spring of 2023, likely for the month of March.

This is an interesting group. These smallest employers have expressed excitement in Oregon and elsewhere about the fact that there is something available to them that is manageable, that enables them to provide retirement savings access for their employees.

David Bell: I couldn't agree more. We are learning a lot here because of what we call Wave Jumpers. There are employers who start facilitating ahead of deadline. What we're hearing out and about is that there may not be as much concern when it comes to these smallest businesses. We're finding that because they have a small employee base it’s super-simple for them to facilitate OregonSaves.

We might be proven wrong, but we're seeing that they're not as concerned about facilitation. They’re also giving their employees access to something they’ve said was unattainable otherwise.

Let’s talk for a moment about emergency savings. Hold on for a moment while I set the stage. Early we felt savers had de facto emergency savings because the first $1,000 contributed was held in a money market fund.

David Bell: You’re right. We looked at it that way internally, but these amounts were never labeled “emergency savings” and it’s unclear whether savers were making a distinction in their minds between safe (emergency) and growth (long-term) savings.

In the very low interest rate environment, we changed the program in 2020 so that all contributions go into a saver’s Target Date Fund once an account has been open more than 90 days. These are Roth IRAs, so monies are still available for emergencies, but they’re clearly coming out of a retirement account.

We have heard from Maryland$aves that they're planning to use a single account for participant savings, and that within that account they’ll have an Emergency Savings bucket. Savings above and beyond go into investments that are part of the Retirement bucket. We don't know what that will look like quite yet.

David Bell: You’re right – we will see what this looks like when Maryland$aves gets a little further along. And I don't see any issues with it, although we’re looking at it slightly differently.

One concern here in Oregon is this: we do not want to have people think that their retirement savings is the place to raid for any emergency that takes place. We would prefer to have participants have emergency savings set aside in a unique account so that when something does pop up -- and it always does -- they're not pulling cash out of something that they know is focused on the future and retirement.

We haven’t identified the exact best design yet. That's why we're working with some really smart people at the CFPB, Commonwealth, Duke Common Sense Labs and others who have given a lot of thought to this to really make sure that we have good design. But I wouldn't be surprised if we found a way to have a separate account, outside of the IRA, that has some parameters for how much is contributed and how it is treated, with overflow into the OregonSaves IRA so it can continue to grow and serve that long-term retirement future.

How do you see this fitting into the big picture as part of the Oregon Treasury Savings Network.

Sabra Purifoy: We touched on the College Savings and the ABLE plans. We also have a financial literacy focused team member. Part of the responsibility we've taken on within the Network team is financial empowerment and habit building, and how we can help support people in that space. In the big picture, the idea is to get people to easily, maybe even automatically, create emergency savings that is available to them when they need it while still having something put away in a retirement fund.

I feel like we’re seeing the identification of a core design that is working well. This includes the 5% standard savings rate, the inclusion of auto-escalation with a cap at 10%, the definition of compensation as W-2 earnings within the state.

Sabra Purifoy: I think that is a highlight of states’ collaboration. Everybody is so focused on creating a product that really fits and benefits people. Those of us at the states working on these programs have very real conversations about what is working, how can we make this better, and what can we learn from what everyone else is doing. States are learning from each other and adjusting as we go along toward the program elements that work the best.

We estimated that about 500,000 Oregonians could be automatically enrolled into OregonSaves. With over 115,000 funded accounts, it looks like a quarter of that population is using the program. What do you think it will take to reach the rest?

David Bell: What we really wanted to do is make sure that we were giving people the opportunity, a very easy opportunity to save through work.

It doesn't surprise us that we don't have a hundred percent. In fact, we feel like we’re still learning what a good target is. We know some of our uncovered population are not in a position to save right now – because of income or family circumstances – and when they opt out that may be for them a very good decision. Others may elect not to save for retirement through OregonSaves for a range of differing reasons. And for some of these uncovered workers, their employer hasn’t made the program fully available to them yet.

Renzo just outlined the fact that we are reminding employers to facilitate these programs. In Oregon, this is a mandatory program. There will come a time when the Bureau of Labor and Industries will be contacting employers who are not facilitating this program, but should be and making sure that they do.

We also have another wave of employers coming on board in early 2023. The smallest employers in Oregon employ a reasonably large proportion of our uncovered workers, more than 10% by many measures.

And finally, a little bit more brand recognition will help. As people become familiar and comfortable with the program we could see somewhat higher engagement rates. We have to remember, we are still pretty new here in Oregon and our awareness budget for advertising has been modest.

So we need just a little bit more time. We probably will not get to a hundred percent participation rate, but we'll get closer. And we're well on track to do that.

Renzo, you’re in the field. What is making a difference there?

Renzo Meza: I would say it is outreach and in particular education, for both employers and the savers too. Auto enrollment makes things easy for workers; our goal is to help them understand the value this savings can have for them; the impact it can have, the growth.

There is still a population that this is completely new to. I spend much of my time reaching out to employers. And sometimes businesses reach out to me, even some of our Chambers of Commerce have reached out to me saying, I just heard about this.

Whenever I give a presentation, I like to have an initial conversation to learn a little bit about more about the specific community in order to tailor the messaging in a way that really resonates.

Some are most interested in the steps to facilitate, others want to know more about the “why” and what's the benefit to the community at large. Others want to know the impact on a paycheck and what that actually looks like. We’re collecting good success stories that are a pleasure to share as well.

Beyond that we’re able to show the steady growth that's already been highlighted. That helps reinforce the message that Hey, this is something worth participating in.

So steady, statewide progress. Good interstate collaboration. Let’s take one more step. How do you see programs like OregonSaves fitting into the national landscape? Let’s start with you, David.

David Bell: We’re excited to see OregonSaves serve as an example for new state auto IRA programs. We're happy to share all of our best practices, the things that are going well, the things that we wish were going better, the things that we've changed.

We also serve as a resource when legislators are looking to structure other opportunities as well. We're lucky to have some key individuals in Washington, DC that take the time to meet with us, to get our thoughts on how things are working. They want to know about program design, they ask about specific successes and struggles. They’re interested to know what we think of a national standard or a national focus and what that could look like. We're one of many voices that they're hearing.

But we do know that we have done something here that is a model for other states and it's a model for the federal government when they're just trying to find ways for people to be able to save for their future that's easier and provides better access than what they had before.

I'm going to put that under the headline, "Washington is listening." Sabra?

Sabra Purifoy: We've mentioned a couple of times that our goal is ultimately to see people saving for retirement. We all know that there's retirement crisis on a national level. People just don't have the savings and income that they need to retire. For us, being a part of providing options for people is really key.

That’s what programs like these are doing. We're filling a gap. We hope a good solution can be developed that will work nationally. We think we’re part of that solution now. Today we're providing a way for folks to start saving for retirement at work. We're really just trying to fill a need.

Renzo, what’s your “new to the scene” perspective?

Renzo Meza: It’s been said -- OregonSaves is seen as a successful model. This is an idea that works here and everywhere else we are seeing it used in the country. From my seat, what I appreciate is to carry on the collaborative approach. We've made ourselves available to help other states get started, and learn, and help folks start saving. That’s what we want. That's the important bit.

What haven’t we talked about!

David Bell: We would be remiss if we didn’t talk about interstate collaboration and partnership opportunities, Lisa. We are regularly in conversations with states who are interested in partnering together to achieve efficiencies and faster launches. Stay tuned for more information in the coming months. It’s something that we'll take our learning approach to since that's a little bit new to this space, but definitely not new to others. We do a lot of collaborative work in the ABLE space today which gives us good experience and a model to draw from.

David, Sabra and Renzo – we appreciate you so much. Congratulations on achieving OregonSaves Age 5. We are excited to see what comes next. Thank you!

Want more? You can connect directly with David Bell by email. You can follow the work of the OregonSaves team in the Treasurer’s Office. You can also connect on social @ORSaves and on Facebook for some great pix and stories.

This piece was featured in the June 30, 2022, edition of Retirement Security Matters. For more fresh thinking on retirement savings innovation, check out the newsletter here.