The Accidental Plan Sponsor®

In the second half of season two, Josh and co-host Michael Kreps explored different ideas to reshape our country’s retirement system. Listen to their recap and reflections on the various approaches and proposals.

As we wrap up season 2 of the podcast, Josh Cohen and guest co-host Michael Kreps come full circle to discuss alternative approaches to the U.S.’s employer-based retirement system. Instead of employers playing the role of the plan sponsor, what if the Federal Government stepped in? Or, what about the private sector? We discussed the proposed Retirement Savings for American Act, Pooled Employers Plans (PEPs) and much more. Josh and Michael are joined by two prominent influencers in the retirement space: Teresa Ghilarducci, professor of economics at The New School for Social Research, and Rick Jones, a Senior Partner in AON’s wealth practice.

Key Takeaways:

[2:07] Josh shares his two a-ha moments: One in 2010 when he visited Australia and learned about superannuation funds and the second a few years later when he heard about USA Funds.

[3:03] Guest co-host Michael Kreps joins Josh, remembering the time that they met for the first time for a coffee, not knowing that they will end up hosting a podcast together.

[3:41] Michael talks about his proposal to the Senate.

[6:11] What if the Federal government plays the plan sponsor role for the private sector workers? Teresa Ghilarducci, professor of Economics at The New School for Social Research, speaks of the personal journey that motivated her efforts in this field.

[10:30] Teresa speaks of the Mandatory Universal Pension System (MUPS).

[16:46] Teresa’s most recent proposal, a thrift savings plan for all workers.

[19:20] Teresa endured a harsh pushback after the global financial crisis and received the name of ‘the most dangerous woman in America.’

[20:17] Michael shares his thoughts about the Retirement Savings for America Act.

[23:01] Michael discusses whether the government should be involved in running plans.

[24:21] Rick Jones, a senior partner in the wealth practice at AON discusses pooled employer plans (PEPs). after discussing his career choices that led to his current position.

[25:50] Rick discusses the employer's role in the US System and why he is passionate about PEPs.

[28:37] The two main problems of the Multiple Employer Plans (MEPs) are the common nexus and the one-bad-apple rule.

[30:06]  Rick speaks of the Secure Act.: , including who plays the role of the plan sponsor in PEPs and the fiduciary duties required.

[35:05] Rick expands on the opportunities provided by pooling.

[38:11] Michael adds his perspective on PEPs and its early efficacy indications.

[42:14] Michael shares his wrap-up comments about the overarching question: Who plays the role of the plan sponsor?

[44:06] Josh closes two full seasons of the podcast, addressing this podcast's central question and its complexity: We need Intentional plan sponsors!

Josh Cohen and guest co-host Michael Kreps have been telling the story of how some policy makers, think tanks, industry groups and politicians worked to address some of the gaps in our retirement system. One of those gaps is the millions of Americans that don’t have access to workplace savings plans.

In this episode, they focus on the work being done at the state level and the process of moving from policy design and legislation, to implementation.

They speak with two individuals who have been instrumental in getting these plans implemented: Katie Selenski, executive director of the CalSavers Retirement Savings Board, and Angela Antonelli, research professor and executive director of the Georgetown University Center for Retirement Initiatives at the McCourt School of Public Policy in Washington DC.

In the 1932 Supreme Court ruling, Justice Louis Brandeis popularized the phrase “laboratories of democracy“ to describe how “a single courageous state may, if its citizen choose, serve as a laboratory and try novel social and economic experience without risk to the rest of the country.”

Many states have looked to become laboratories to address some of the gaps in the US current retirement system that federal policy hasn’t yet been able to successfully solve. Josh Cohen and guest co-host Michael Kreps talk to two early experimenters, Hank Kim and Daniel Biss, to learn from their experiences turning policy ideas into legislation. 

Hosted by Josh Cohen, The Accidental Plan Sponsor podcast explores the history, evolution and future of employer-based retirement plants, including the 401(k), through the eyes of its creators -- providing unparalleled insights into an imperfect system that works for many, but not all.   

Key Takeaways:

[:38] Josh Cohen, your host, approaches the fact that some states have become laboratories to address some of the gaps in the current retirement system, which federal policy cannot tackle yet. 

 [3:44] How did states get involved in retirement policy when it is typically taken care of at a national level?

[4:32:] Michael Kreps, Principal at Groom Law, shares some of his recollections and experiences about the journey that some of the states have been going through.

[6:06] What drove some states to go down this path of turning policy ideas into laws? Who were some of the most important players?

[7:15] Hank Kim, Executive Director & Counsel at NCPERS, talks about Secure Choice Plans (a term he coined himself).

 [9:04] Hank talks about how he began working on pension issues, starting with the union of firefighters.

[9:37] Hank speaks of the history of NCPERS.

[11:32] Hank explains why NCPERS showed interest in the private sector.

  [16:08] Hank talks about the Californian, Oregon, and Illinois policymakers and how they couldn't get around political challenges as they defined the benefit pension approach.

  [21:27] Illinois was the first state to pass legislation approving the launching of an auto IRA program. Daniel Biss, Mayor of Evanston, explains how he plays a part in the story of retirement security.

 [33:40] Daniel explains why states can be the laboratory of democracy.

 [35:05] Michael shares his perspective about states being laboratories of innovation and if state experiments could contribute to a consensus around a national policy.

Thank you for tuning in. If you liked what you heard, please subscribe and leave us a review wherever you listen to your podcasts.

Links:

The Accidental Plan Sponsor

Mentioned in this episode:

More about Michael Kreps

More about Hank Kim

More about Daniel Biss

The Auto IRA concept has been one of the most influential proposals to address gaps in the current US retirement system, namely the persistent coverage gap for small private-sector employers.

Josh and guest co-host for the next few episodes, Michael Kreps, discuss the genesis of auto-IRAs with two individuals from different political backgrounds who came together to conceive and promote the proposal and implementation efforts: guests David John and Mark Iwry. 

David is a Senior Policy Advisor at the AARP Public Policy Institute and the Deputy Director for the Retirement Security Project at the Brookings Institution. Mark is a former Deputy Assistant Secretary for the US Treasury, a Nonresident Senior Fellow at Brookings, and a visiting scholar at the Wharton School. Tune in to hear how David and John’s paths crossed to result in the bipartisan Auto-IRA now operating in several states today.

Key Takeaways:

[:14] Lorenzo and Yolanda Harris have been operating Janico Building Services for more than 30 years.

[1:07] The Harris were facing the same issue that millions of small businesses in the US encounter today, the ability to provide a low-cost quality workplace retirement savings vehicle for their employees.

[1:33] Janico was the first company to provide an Auto RAA program to their employees.

[5:13] Michael Kreps, Principal, Chair of Retirement Services Practice,  introduces himself.

[6:51] Michael shares the emphasis for this part of season 2. 

[8:10] There have been decades of proposals about how to fix the retirement system. Michael talks about how some things turned better and sometimes worse, but the Auto RAA is one of the most influential proposals in recent history.

[9:00] David Jone introduces himself.

[9:55] David shares how he began working with congressmen.

[10:30] Mark Iwry talks about his professional and personal journey.

[11:50] Mark wanted to make the world a better place through public policy, and he found a mentor to whom he talks about

[13:52] Mark found his passion the healthcare reform.

[15:18] Mark explains why the initiative was out of the norm.

[17:08] They were trying to solve a pendent issue in the US retirement system.

[17:28] Pension simplification was introduced by Mark with simple RIA.

[18:49] Mark and David got together to combine concepts.

[20:21] How did Mark and David, coming from such different backgrounds, come together with a proposal?

[22:15] Mark and David talk about when the idea of auto RAA came about.

[24:15] David shares what happened at the Heritage Foundation Auditorium.

[25:02] To which employers did the original legislation apply?

[26:26] Who will run these plans?

[26:49] Josh explains a Threat Saving Plan (TSP).

[27:35] One of the primary goals of the TSP proposal was to encourage more adoption of private-sector savings.

[29:01] Mark and David tested the program, and over time people recognize it was something they could do to attract better-quality employees and keep them.

[30:45] Mark and David started to get offers from lawmakers. 

[31:38] David and Mark got both presidential candidates to endorse their proposal.

[33:44] The auto RAA was included in many of Obama’s budgets, but Obama Care happened.

[34:56] They couldn’t get the proposal pass at a Federal level, but they could still try at the state level.

[36:54] David was very reluctant about trying the auto RAA at a state level.

[38:33] David talks about the employer's role in the auto RAA as the plan sponsor.

[40:48] Thankfully, David and Mark continue to be active.  

[42:05] Michael talks about the impact of Mark and David’s work on the auto RAA concept.

[44:15] David and Mark have been pushing for decades for the auto RAA to become a reality.

Thank you for tuning in. If you liked what you heard, please subscribe and leave us a review wherever you listen to your podcasts.

Links:

The Accidental Plan Sponsor

Mentioned in this episode:

More about Janico Building Services

More about Michael Kreps

More about Mark Iwry

More about David Jone

For the second half of season 2, Josh Cohen will be joined by guest co-host Michael Kreps, Principal at Groom Law Group, to dissect the biggest questions and potential solutions that are being worked on in the retirement space.

Josh gets on the ground insights from three colleagues in PGIM’s Institutional Relationship Group: Ben Price, Howard Nowell, and Philip Hsin. 

Michael Miller, a long-time industry veteran and Head of PGIM DC Solutions, joins Josh to share how he got into the retirement space and some insightful perspectives on DC trends and pressing issues.

In the first half of season 2, Josh traveled the globe to hear from local experts about how their countries tackled the challenge of building a retirement system. Listen to Josh’s reflections on lessons learned and common themes.

John Mitchem, global financial consultant and retirement expert, joins Josh to discuss episodes from the first half of season 2 while weaving in his experiences and expertise.