More must be done to help Minnesotans put money away for retirement, panelists agreed at a MinnPost event in St. Paul on Friday. They offered a variety of differing perspectives, however, on which policy tools would best accomplish that goal.
The forum, held at the Minnesota History Center and sponsored by AARP Minnesota, was titled “Minnesota’s Retirement Savings Crisis.” It featured:
- Angela Antonelli — Executive Director of the Center for Retirement Initiatives at Georgetown University’s McCourt School of Public Policy;
- Doug Loon — President, Minnesota Chamber of Commerce;
- Emily Piper — Commissioner, Minnesota Department of Human Services; and
- Teresa Rasmussen — President, Thrivent Financial.
Antonelli’s Center for Retirement Initiatives focuses on the access gap — those without access to either pensions or 401(k)s at work. In the absence of a national push to address the problem (which affects some 873,000 Minnesotans), states have been innovating, creating state-administered saving plans.
“More than half of the private-sector workforce lacks access to a way to save through an employer-sponsored plan … one of the best ways for workers to save,” Antonelli said via a video connection. “Policymakers are acting in the states because they see the lack of retirement readiness and they understand that there are long-term budget and economic consequences to not taking action. … They can be enormous.”
Minnesota is in the exploratory stage of addressing this part of the issue:
- In 2014 the Legislature passed the Women’s Economic Security Act, which directed Minnesota Management and Budget to report on the potential for such a plan; the study, done by Deloitte, was released March 24 [PDF], presenting options for a state-sponsored plan.
- On Wednesday, legislation was introduced — the Minnesota Secure Choice Retirement Act (SF 2303 and HF 2570) — in the House and Senate to create a public-private partnership model for Minnesotans who lack access to a plan through their employer. The bill points out that nearly half of working-age households have no more than approximately $40,000 in retirement savings.
Commissioner Piper emphasized the budget ramifications of inadequate individual savings on Medicaid and other government programs, adding that among its supports Minnesota has tried to keep health-care spending down by helping people stay in their own homes rather than enter expensive nursing homes.
All agreed that for those who do have retirement plans, behavioral “nudges” — such as auto-enrollment with an opt-out option and auto-escalation of savings — can encourage more employees to participate and to increase their rate of saving.
Teressa Rasmussen emphasized the importance of educating younger generations on both the importance of saving and methods of doing so. She also emphasized the need to plan carefully for the two largest expense items in retirement: housing and health care.
Doug Loon said small employers would welcome creative help so more of them could offer retirement plans to their workers; he stressed that the business sector doesn’t favor mandates, however — that any programs created by the state should be voluntary.
Here are several video excerpts from the forum, followed by a complete video of the event: