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Similar to Out of Crisis Comes Opportunity (20)
Out of Crisis Comes Opportunity
- 5. Copyright© 2015byTheRockCreekGroup,L.P.Allrightsreserved.
Theinformationsetforthaboveisnotintendedas,norshoulditbeinterpretedtobe,anoffertobuyorsellanysecurityortoparticipateinanyinvestmentortradingstrategy.
ThebusinessdescribedinthisPresentationmaynotbesuitableforallinvestors,andmaynotbesuitableforsomeinvestorswhoqualifytopurchaseinterests.
5THE ROCK CREEK GROUP
Do Not Go Gently into That Good Night
36%
have $0-$1,000
16% have
$1,000-$9,999
8% have
$10,000-$24,999
9%
have $25,000-
$49,999
9%
have $50,000-
$99,999
11%
have $100,000-
$249,999
11%
have $250,000
or more
Source: Employee Benefit Research Institute
52%
have less
than $10,000
- 6. Copyright© 2015byTheRockCreekGroup,L.P.Allrightsreserved.
Theinformationsetforthaboveisnotintendedas,norshoulditbeinterpretedtobe,anoffertobuyorsellanysecurityortoparticipateinanyinvestmentortradingstrategy.
ThebusinessdescribedinthisPresentationmaynotbesuitableforallinvestors,andmaynotbesuitableforsomeinvestorswhoqualifytopurchaseinterests.
6THE ROCK CREEK GROUP
• If you give Americans the opportunity to save they believe they could do it, if
employers made it easy
• 70% of Americans believe they could save $25 more per week by giving up:
• Eating out / ordering in (46%)
• Soft drinks or snacks (13%)
• Movies, videos, DVDs or streaming (12%)
• Coffee from specialty shops (11%)
• Lottery tickets (8%)
(Source: Retirement Confidence Survey, EBRI, Greenwald and Associates)
• But, half of all Americans can’t raise $2,000 in 30 Days … Because it’s not easy!
(Source: Time Magazine)
• $120,000 needed for a worker making $30,000 to reach 78% of pre retirement
income
Meager Savings
- 11. Copyright© 2015byTheRockCreekGroup,L.P.Allrightsreserved.
Theinformationsetforthaboveisnotintendedas,norshoulditbeinterpretedtobe,anoffertobuyorsellanysecurityortoparticipateinanyinvestmentortradingstrategy.
ThebusinessdescribedinthisPresentationmaynotbesuitableforallinvestors,andmaynotbesuitableforsomeinvestorswhoqualifytopurchaseinterests.
11THE ROCK CREEK GROUP
• Most American workers are not filling the retirement void created by their employers
• Among employees earning between $30,000-$50,000 a year, only 1 in 20 participate in
a non-employer based IRA
(Source: Unpublished estimates from the Employee Benefit Research Institute)
• When they do, they lose
• Only 1% of all active traders beat the market
• Why? Overconfident – overtrade, buy high/sell low, portfolios lack diversification,
pressure to chase ‘hot’ stocks.
• Investors’ equity fund returns lagged the S&P 500 index by 4.2 percentage points
annually over 20-year periods (Source: Dalbar).
The House Always Wins
(Source: Marketwatch, Howard Gold)
- 14. Copyright© 2015byTheRockCreekGroup,L.P.Allrightsreserved.
Theinformationsetforthaboveisnotintendedas,norshoulditbeinterpretedtobe,anoffertobuyorsellanysecurityortoparticipateinanyinvestmentortradingstrategy.
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14THE ROCK CREEK GROUP
81% - 84%
Participation if
offered!!
All
Access
Take-up
Participation
Firm Size
Firm Size <25
Access
Take-up
Participation
Firm Size 25-99
Access
Take-up
Participation
Firm Size 100-499
Access
Take-up
Participation
Firm Size 500-999
Access
Take-up
Participation
Firm Size 1,000+
Access
Take-up
Participation
*Each three-year span represents appended data for those three years; figures reported are three year averages.
Source: Authors'analysis ofMarch CPS, 1988-90,1998-2000, and 2008-10. Data are from 1987-89, 1997-99, and 2007-09, respectively.
Figures are three-year averagers.
71.2% 65.5%
83.7% 76.6%
85.1% 85.4%
84.0% 84.9%
65.7% 60.0%
57.3% 52.8%
78.2% 70.7%
69.9% 63.5%
82.3% 83.1%
80.0% 81.8%
43.4% 40.8%
21.7% 20.8%
54.2% 49.9%
27.3% 25.1%
79.6% 82.8%
53.9% 49.0%
64.5% 58.1%
83.5% 84.4%
1997-99* 2007-09*
Participation Rate Does Not Depend On Firm Size
Employer Sponsored Retirement Plan Coverage, United States
United States United States
- 22. Copyright© 2015byTheRockCreekGroup,L.P.Allrightsreserved.
Theinformationsetforthaboveisnotintendedas,norshoulditbeinterpretedtobe,anoffertobuyorsellanysecurityortoparticipateinanyinvestmentortradingstrategy.
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22THE ROCK CREEK GROUP
Bill Element California SB 1234 Illinois SB 2758 Oregon 8B 2960
Type of retirement plan Automatic traditional IRA Automatic ROTH IRA Defined Contribution
Required participation Employers with 5 or more
employees with no retirement
plan
Employers with 25 or more
employees with no retirement
plan.
Size of business not yet
determined; there is also auto
escalation and auto enrollment
Exceptions None 2 year delay for new businesses
or businesses with retirement
plans within last 2 years
Investment Management Pooled fund with professional
management – no individual
choice
Pooled and professionally
managed
Pooled and professionally
managed
Insurance Board to procure private
insurance to provide guaranteed
return
Board has option to create a
“secure return” principal
preservation option with private
insurance
Insurance is an option
Fees No more than 1% No more than .75%
Payout Stated interest in providing
lifetime retirement income, but
no specific requirement
Stated interest in providing
lifetime retirement income, but
no specific requirement
Implementation The board must conduct market
analysis and feasibility study
before returning to legislature
for authorization vote before
opening plan to enrollment.
The board shall open the plan to
enrollment within 1 year of
effective date of bill.
The board has enormous power
and it does not have to go back
to the legislature
Secure Choice Plans
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• Launched in February 2015 with 13 states and NYC as
members
• Host monthly meetings for states to discuss their legislative
initiatives, share experiences, lessons learned, best practices,
etc.
• CRI’s opportunity to build deep relationships with the state
staff and identify areas of research and advocacy where
we can support states’ efforts
• Participating states currently include WA, OR, CA, IL, MD, ND,
KS, KY, NY, NYC, VA, VT, CT, UT with others to be added.
• Host and/or facilitate meetings with federal policymakers to
discuss issues of concern to states
CRI Leads State Legislative Working Group
- 30. Copyright© 2015byTheRockCreekGroup,L.P.Allrightsreserved.
Theinformationsetforthaboveisnotintendedas,norshoulditbeinterpretedtobe,anoffertobuyorsellanysecurityortoparticipateinanyinvestmentortradingstrategy.
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30
Important Disclosures & Risk Considerations
Theinformationcontained hereinisforthe recipient’sexclusive use only,and may containinformation thatisproprietary,constitutes a trade secret,and/orissubjectto copyright. This
informationisconfidentialandmaynotbereproduced,distributed,copiedorusedforanyotherpurpose. Itcannotbedisclosedtoanythirdpartyorusedforanypurposeunrelated
totheinvestor’sinvestmentportfolio. Byacceptingsuchinformation,therecipientagreesthatitwill,anditwillcauseitsdirectors,partners,officers,employeesandrepresentatives,touse
such information only to evaluate its potential interest in the securities or services described herein and for no other purposes. By accepting such information, recipient agrees not to
divulge any suchinformation to any other party. It may not be reproduced, distributed, copied orused for any other purpose unless specifically authorized in advance byThe Rock
CreekGroup,LP.
ThisPresentationisintendedonlytofacilitateyourdiscussionswithRockCreekastotheopportunitiesavailabletoourclients,isnotintendedtobeusedasageneral guidetoinvesting,
or as a source of any specific investment recommendations, and makes no implied or express recommendations concerning the manner in which any client’s account should or
would be handled, as appropriate investment strategies depend upon the client’s investment objectives. Notes and discussions concerning general economic conditions and
politicaldevelopmentsarenotintendedtobeusedasageneralguidetoinvesting,orasasourceofanyspecificinvestmentrecommendations,andRockCreekmakesnoimpliedor
expressrecommendationsorwarrantiesconcerningthemannerinwhichanyaccountshouldorwouldbehandled,asappropriateinvestmentstrategiesdependupontheinvestor’s
uniqueinvestmentobjectives. Assuch,theinformationcontainedhereinhasbeenpreparedsolelyforgeneralinformationalandisnotanoffertobuyorsellorasolicitationofanyoffer
to buy or sell any security or to participate in any strategy. If any offer of securities is made, it shall be made pursuant to a definitive offering memorandum (the “Offering
Memorandum”)in accordancewith the terms set forth in the OfferingMemorandum, prepared by or on behalfof the relevant fund,whichwould contain material information not
containedhereinandwhichwouldsupersedethisinformationinitsentirety.
NeitherRock Creek noranyofitsaffiliates oremployees makes any representation orwarranty, express orimplied, as to the accuracy orcompleteness of the information contained
hereinandnothingcontainedhereinshallberelieduponasapromiseorrepresentationastopastorfutureperformance. Pastperformanceisnotindicativeoffutureperformance.
Thevolatilityofanyindices represented hereinmaybe materially differentfrom thatofan investor’saccount’s portfolio. In addition,an account’s holdings may differsignificantly from
the securitiesthatcomprise theindices. Theindices have notbeen selected to representappropriate benchmarks to compare anaccount’s performance,butratherare disclosed
to allow for comparison of the performance of accounts and managers in general to that of well-known and widely recognized indices. Information contained herein regarding
performance of any index or security is based on information obtained from the indicated sources as of the specified dates, but there is no guarantee as to the accuracy of such
information.
Discussionsandcalculationsregardingpotentialfutureeventsandtheirimpactontheaccountarebasedsolelyonhistoricinformationand estimatesand/oropinions,areprovidefor
illustrativepurposesonly,andaresubjecttofurtherlimitationsasspecifiedelsewhereinthisreport.Noguaranteecanbemadeoftheoccurrenceofsucheventsortheactual impact
sucheventswouldhaveontheaccount’sfutureperformance.
Anyopinions,forecasts,assumptions,estimatesandcommentaryhereinaremadeonlyasofthedatesindicated,aresubjecttochangeatanytimewithoutpriornotice,andcannot
beguaranteedasaccurate. Rock Creekhasnoobligationtoprovideany updates orchanges to any suchopinions,forecasts,assumptions,estimates,and commentary orto any
dataorinformationcontainedherein.
Editor's Notes
- We have a crisis.
- We have a crisis.
- We have a crisis.
- Apart from employer based savings
- We have a crisis.
- We have a crisis.
- And DP plans produce better results for workers.
- We have a crisis.
- The step-wise progression of increasing rates of access by firm size is illustrated in the chart- Given the opportunity – most people take it!
- We have a crisis.
- We have a crisis.
- Comparison of secure choice plans.
- We have a crisis.
- We have a crisis.
- We have a crisis.
- We have a crisis.