Interview with Courtney Eccles, Director of Illinois Secure Choice
Courtney Eccles is the director of the Secure Choice Savings Program at the Illinois State Treasurer’s Office, a state-administered retirement savings program serving over one million private-sector workers. She is responsible for program implementation and ongoing operations, working directly with the Secure Choice Board on program development and management and interacting with industry stakeholders, advocates, and other state agencies. Previously, Eccles served as vice president of policy for Woodstock Institute, a research and advocacy nonprofit, where she was responsible for state and federal policy initiatives in wealth creation and asset building, fair lending, and financial systems reform.
Earlier this year we sat down with Courtney at the Aspen Institute’s annual leadership forum on retirement savings to catch up with her about the Illinois Secure Choice program. We've previously covered the basics of the Illinois Secure Choice program here.
Guideline: What is the Illinois Secure Choice program?
Courtney Eccles: Illinois Secure Choice is a state-administered retirement savings program for workers who don’t have access to an employer-sponsored plan at work. It makes it easy for Illinois workers to save their own money and it’s simple and straight-forward for employers to facilitate.
The program has built in a lot of behavioral finance best practices – savers are automatically enrolled with a default savings rate of 5% into an age-appropriate target date fund. They can modify those default savings option or opt-out of the program altogether. The accounts are portable from one employer to the next, and savers can have multiple employers contributing into the same, single account.
Employers play a very limited role. Ultimately, we understand that there are employers out there who don’t want to or can’t offer an employer-sponsored plan. Secure Choice allows their employees to still save for retirement without requiring the employer to take on as much responsibility.
The program applies to every employer in Illinois with at least 25 or more workers, that has been in business for at least two years. They need to either offer their own plan or facilitate Secure Choice.
Guideline: What led the state of Illinois to establish the program?
Courtney Eccles: Illinois Secure Choice legislation was signed into law in early 2015. The legislation really came from an understanding that too many workers in Illinois lacked access to an employer sponsored retirement plan (nearly 50% of the private-sector workforce), and research shows us that people are 20 times more likely to save if they have a plan at work.
Policymakers realized that without access, far too many workers in Illinois were at risk of retiring into poverty–and that doesn’t help anyone. Secure Choice was a solution that minimized the responsibility of employers, made it easier for individuals to save their own money, and helped address the access gap to put more people on a path to retirement.
Guideline: How does Illinois Secure Choice serve the needs of small businesses and their employees?
Courtney Eccles: The program enables small businesses to offer a retirement option to their employees without having to take on the cost, administration, or legal oversight that may come with a traditional plan. Our hope is that employers see this is a way to help their employees if they’re not ready to offer their own plan.
Guideline: Where does the program stand today?
Courtney Eccles: The program launched in the fall of 2018, and in less than two years I’m proud to say we have over 65,000 funded accounts and over $25 million in assets under management. We have over 5,500 registered employers and thousands more employers across Illinois that we’re working with to get them registered and set up to start facilitating payroll contributions into the program. We’re also looking at expanding the program by lowering the 25 employee threshold and adding auto-escalation into our default savings option.
Guideline: What does the program cost employers and employees?
Courtney Eccles: The program has no cost to employers. We’ve tried to limit the role of employers as much as possible. They register for the program using our online portal. They provide the program with employee data so we can appropriately contact employees and open accounts, and then they remit payroll contributions. The program takes care of all communications with employees, all client service requests, account changes, administration etc. Employers aren’t charged any fees.
Savers in the program pay a total of 75 basis points on their balance, ($7.50 for every $1,000) on an annualized basis–that’s inclusive of all fees, including administrative and investment fees.
Guideline: Is Illinois Secure Choice right for everyone?
Courtney Eccles: I think Illinois Secure Choice is a great option for employers who aren’t ready or able to offer their own program. It’s not the same as an employer sponsored plan and we want employers to make the choice that’s right for them.
For savers, Secure Choice is a convenient way to automatically and easily save their own money into their own account. The program recently became available to anyone. We opened it for self-enrollment in mid-March to ensure that gig workers and self-employed individuals could have the same access. Ultimately, people should make the decision that’s right for them, but I do think we created a program that can work for a lot of different people.
Guideline: How should business owners evaluate existing retirement plans against Illinois Secure Choice?
Courtney Eccles: This is a great question. When we talk to business owners about Secure Choice, we remind them that it’s not the same as an employer-sponsored plans and we think every employer should evaluate the options and pick what’s right for them. With Secure Choice, employers “facilitate” the program–they don’t pay any fees, they don’t make any contributions, they aren’t the plan-sponsor, they aren’t responsible for the administration and reporting, and they don’t have any fiduciary responsibilities—all of which are requirements with an employer-sponsored plan. However, there are some employers who may want the ability to make contributions or matches, which you can’t do with Illinois Secure Choice. They may want a 401(k) which allows their workers to save more (higher annual contribution limits), and they may want the control to pick a plan and be the plan fiduciary.
The whole idea is that we want workers to have access to something. We know that plenty of employers may consider the options and decide to go with a private-sector plan. That’s great! We see that as a win for everyone. But for those business owners who are not in the position to on that responsibility, Secure Choice is the simple and no-cost solution. We see Secure Choice as a compliment to the private-sector solutions, not a competitor.
Guideline: What, if any, impact has Covid-19 had on the program and your savers?
Courtney Eccles: We’ve certainly been tracking program data very closely over the last three months to see what changes, if any, have come about due to Covid-19. I’m happy to say that we haven’t seen a significant increase in savers making withdrawals. There was a slight increase in late March right when we first entered our “shelter-in-place” period in Illinois but that leveled off in April and May. We did see a decline in overall contributions in the months of April and May–we expect that’s because of temporary closures of businesses, as well as fewer staff or reduced hours for businesses that remained open. The good news is that our monthly contributions have begun to increase again in June as our state moved into the next phase of reopening.
The great news is that even through the pandemic, we’ve continued to see growth in the number of registered employers and the number of funded accounts, albeit a slower pace than we saw earlier in the year.
Guideline: What impact do you hope this program will have in the years to come–for Illinois workers, or for the retirement industry more broadly?
Courtney Eccles: I hope that Illinois Secure Choice can continue to serve as an example of how we can begin to address the significant retirement savings issues we have in this country. Programs like this help close the access gap and they can serve as a model for how effective automatic IRA programs are. In addition, I think we’ve started to break down certain misconceptions that people have about lower-income workers and their ability to save. We’re showing that that, when given easy access, lower- and middle-income workers do save.
Ultimately, as a country we need to continue to push forward with policies that ensure all workers can retire with dignity. Illinois Secure Choice isn’t the only answer – but it’s one important step. I’m excited to see our program grow in the coming months and years, and I’m hopeful that future states and even the federal government create and expand programs that enable all workers to save for their future.
Thanks to Courtney the Illinois Secure Choice team for doing so much to help give Illinois workers a path to a brighter retirement. We think it’s a big step forward for Illinois businesses and their employees.