Bills would reinstate employer match and allow casual/seasonal employees to participate in retirement plan

Remaining consistent with her three main priorities; bolstering retirement security and readiness, creating pathways to economic empowerment, and promoting a culture of financial excellence, Treasurer Davis has proposed two pieces of legislation with bi-partisan support designed to support state employees with their retirement saving.

The first bill, supported as a key strategic objective of the Delaware Plans Management Board, would reinstate the employer match for state employee contributions to the deferred compensation program. The State suspended the match in July 2008 during the early part of the ‘Great Recession’.

“It was always the intent of the General Assembly to revive the match after lawmakers reluctantly put it on hold in order to cut costs,” said Treasurer Davis. “In fact, every budget bill since Fiscal Year 2008 contained language reading ‘It is the intent of the General Assembly that this program be reinstated when funding becomes available.’”

Senate Bill 94, sponsored by Sen. Trey Paradee and House Majority Leader Valerie Longhurst restores the State’s match and adjusts it for cost-of-living increases by setting the maximum match at $20 per pay period. The previous maximum was set at $10 in the year 2000.

“For over a decade, the State of Delaware provided a meager match to the deferred compensation program as a way to encourage state workers to save for their future,” said Sen. Trey Paradee, D-Dover, Senate prime sponsor of SB 94. “Now, after six straight years of surpluses, I think it’s time we finally keep our promise and restore a match that keeps pace with inflation. This legislation is not only good for state workers, it also will help the State of Delaware at a time when it’s getting harder to compete with the private sector.”

During the time that the State offered the employer match, the employee participation rate was growing at an average of 3.25% per year. After the suspension, employee participation declined at an average rate of 1.6% per year.

Senate Bill 94 also provides retirement help to State employees with student loan debt who are struggling to save for retirement. The bill also authorizes the State to contribute to an employee’s retirement account if the employee is making payments on student loans, and as a result, the employee cannot afford to contribute to their retirement account.

A second piece of legislation will take another step towards increasing retirement saving opportunities for state employees. When passed, House Bill 130, sponsored by Reps. Longhurst, Krista Griffith, and Melissa Minor-Brown and Sen. Paradee will allow casual seasonal state employees to participate in the State’s 457(b) retirement savings plan. Currently, casual/seasonal employees, who are not eligible for benefits, are excluded from the plan. As a result, many casual seasonals are missing out on saving for retirement.

“Casual seasonal employees make up a critical part of the state government workforce, and they play a significant role in keeping our state running and delivering services to the people of Delaware.” said Treasurer Davis. “Among those in casual seasonal roles are nurses, park rangers, prosecutors, accountants, security officers, and social workers. The State should be taking care of these hard-working individuals by allowing them to participate in the State’s retirement savings plan so that they can save, invest, and build wealth for a more secure and comfortable retirement.”

“Our hardworking state employees dedicate their lives to serving our communities. It’s only fair that we give these civil servants the tools and resources they need to enter their retirement years with dignity and security. With these bills, we’re taking meaningful steps to fulfill that promise and secure the financial future of our state’s workforce,” said House Majority Leader Valerie Longhurst. “I commend State Treasurer Colleen Davis for her commitment to ensuring that all state workers have the opportunity to plan for their retirement with confidence and I look forward to passing these bills in the General Assembly.”

State Treasurer Colleen Davis led the first in a series of public forums to spread the word about the benefits of Delaware EARNS, an upcoming program that will provide workers and employers with access to low-cost retirement savings plans, beginning in January 2025. The Delaware NAACP, the Metropolitan Wilmington Urban League, and the Police Athletic League of Wilmington joined with the Office of the State Treasurer in the event Tuesday evening at the Wilmington PAL Center.

“Taking the EARNS message to communities with many small businesses and residents who work for these businesses will help us share the value of the program,” said Treasurer Davis. “Explaining to entrepreneurs that they can open the door for their employees’ retirement savings with no cost and minimal effort can help it become a valuable tool in hiring and retaining quality workers that help keep small businesses running.”

The presentation included information on how the pending retirement crisis created the need for Delaware EARNS. Currently 39% of the State’s workforce does not have an easy way to save through a retirement program at work. Delaware EARNS addresses the situation by automatically enrolling employees into a State-facilitated retirement savings plan unless they elect to opt-out. Delaware EARNS also benefits small businesses who may not be able to offer retirement plans to employees due to the cost and administrative burden, allowing them to attract and keep good employees by offering a crucial benefit like retirement savings.

The next forum takes place May 4, 2023, at 6:00 p.m., at the Living Grace Worship Cathedral in Middletown in conjunction with the Alpha Kappa Alpha Sorority, Inc. A third will take place in June co-sponsored by AARP Delaware.

Meanwhile, the Delaware EARNS Program Board continues to meet and establish policies and procedures for the program. The Board will meet tomorrow, April 13, 2023, and again on July 13, 2023, and October 12, 2023. The Board’s three standing committees, the Program & Investment Committee, Audit, Policy & Governance Committee, and the Outreach & Engagement Committee all continue to meet and work towards implementation of the program.

To learn more about Delaware EARNS, visit de.gov/earns. For more information about the work of the Board, visit https://treasurer.delaware.gov/earns_board/.

Having a savings plan, knowing what resources are available for it, and knowing how to use those resources are the three vital factors needed to build financial confidence. State Treasurer Colleen Davis is encouraging all Delawareans to use America Saves Week as the incentive to save money, reduce debt, and build wealth over time.

The theme for America Saves Week 2023, which runs from February 27^th to March 3^rd, is “A Financially Confident You.”

“Financial literacy is important, but only when you know you have a plan to face your own unique situations or unexpected expenses do you achieve true financial confidence,” said Treasurer Davis. “Our office will share information throughout America Saves Week that will help people prepare for the future.”

Currently in its 16^th year, America Saves Week, an initiative of the Consumer Federation of America, is an annual call to action for everyday Americans to commit to saving successfully with each day having a specific theme:

• Monday, February 27 – Saving Automatically
• Tuesday, February 28 – Saving for the Unexpected
• Wednesday, March 1 – Saving for Major Milestones
• Thursday, March 2 – Paying Down Debt is Saving
• Friday, March 3 – Saving at Any Age

Information about each day’s focus as well as other useful information will be featured on Delaware’s America Saves webpage.

Since taking office, Treasurer Davis’s main priorities focus on bolstering retirement security and readiness, creating pathways to economic empowerment, and promoting a culture of financial excellence for all Delawareans.

“In addition to administering the DE529 Education Savings Plan, DEpendABLE, a savings vehicle for people with disabilities, and DEFER, a deferred compensation program for state employees, we developed new savings programs as well over the past year,” Treasurer Davis said. “Aspire529 is a program for youth in or aging out of the foster care system to help them pay for expenses related to college or vocational training, and with the help of the general assembly, Delaware EARNS, a program designed to provide workers and employers access to low-cost retirement savings plans, is currently in development.”

Members of the legislature joined Treasurer Davis again in support of education around saving by declaring the week of February 27th “Delaware Saves Week” with the passage of House Concurrent Resolution 6.

“Financial security is critical to a person’s independence and personal wellbeing,” said Rep. Larry Lambert, sponsor of HCR 6. “Saving now for your retirement – even though it is decades away – provides people with stability and peace of mind, especially as they near their Golden Years. Yet still, nearly half of all American families don’t have a retirement account, including 70% of families with below-average income.”

“That’s why I fought to pass the Delaware EARNS program with Treasurer Davis to make saving for retirement a reality for thousands of Delaware families,” Lambert said. “Encouraging residents to save during Delaware Saves Week puts this at the forefront and allows us to remind people just how important it is to start putting funds aside now for your future.”

“The pandemic has shown us that it’s never been more important for families to have savings that they can count on,” said Sen. Nicole Poore. “I was proud to work with Treasurer Davis and my House colleague Rep. Lambert last year on HB205, the Delaware EARNS bill. That’s why I also cosponsored House Concurrent Resolution 6, designating the week of February 27 as ‘Delaware Saves Week.’”

The Municipal Securities Rulemaking Board (MSRB) announced the members of its new Market Transparency Advisory Group (MTAG). Treasurer Davis is one of 13 members of the group which will help identify objectives for the modernization of the MSRB’s systems and provide input on potential data and technology tools for the market.

“I’m honored by my appointment from the MSRB,” said Treasurer Davis. “Our group will work to advise the Board on initiatives to enhance the free Electronic Municipal Market Access (EMMA®) website and related systems in support of market transparency.”

“Especially in these times of unprecedented market volatility and uncertainty as a result of the coronavirus pandemic, we appreciate the outpouring of support for this new advisory group from everyone who volunteered their time, creativity and forward-thinking in support of municipal market transparency,” MSRB Board Chair Ed Sisk said. “The perspectives of our new MTAG members will help us leverage our migration to the cloud by identifying and prioritizing initiatives that enable big data analytics and other tools, which in turn will allow the EMMA website and our other market transparency systems to deliver ever-increasing value to market stakeholders.”

The group consists of 13 market professionals representing a broad and diverse cross-section of the industry who will help identify objectives for the modernization of the MSRB’s systems and provide input on potential data and technology tools for the market.

Joining Treasurer Davis in the group are:

• Cynthia Evangelisti, Treasurer, Chicago Park District
• Christopher Ferreri, Partner, Chief Operating Officer, Hartfield, Titus & Donnelly, LLC
• Suzanne Finnegan, Chief Credit Officer, Build America Mutual
• Charles Giffin, Managing Director – Public Finance, J.P. Morgan
• Chris Kendall, Vice President – Fixed Income Trading, Charles Schwab & Co., Inc.
• Mike Olander, Fixed Income Business Manager, Bloomberg LP
• Hillary D. Phelps, Partner, Chapman and Cutler LLP
• Susan Borries Reed, Director, Baker Tilly Municipal Advisors, LLC
• Jason Richter, Deputy Treasurer of Debt Management, State of Washington
• Paula Stuart, Chief Executive Officer, Digital Assurance Certification (DAC)
• Lisa Washburn, Managing Director and Chief Credit Officer, Municipal Market Analytics
• Sean Wilkoff Ph.D, Visiting Assistant Professor, Penn State University

State of Delaware Treasurer Colleen Davis

WILMINGTON, DE (December 5, 2019) – Delaware’s Route 9 corridor is unique. It’s history, diversity, and sense of community are a beacon that shines as an example throughout the state.

The Route 9 corridor has been through many decades of disadvantage. There have been a number of plagues on progress over the years including environmental challenges, institutional racism, and housing inequality. But these troubles have developed a steadfast resolve among residents – one that not only helps neighbors battle these conditions, but has created a confidence and independence in the community to create ideas on how to solves these problems themselves, growing communal solutions from within.

But, some parts of Route 9 are not as advanced, like the area lacking access to banking – not invested in by financial institutions for several years, while check-cashing intuitions and predatory lending runs rampant.

That is not to say that there isn’t economic opportunity in the area – there is. You might say that there is more opportunity than ever, with the Port of Wilmington producing $436 million in business revenue and $409 million in personal income for the region through jobs. There has been very little institutional and economic empowerment here – that is, until now.

Route 9 community leaders like Ron Handy Sr. brought people together to solve their own problems, as they have found themselves doing for decades. This month, the community will realize the opening of not one, but three reputable financial institutions throughout the corridor. It has been my honor to talk with community leaders, to hear their story, and to learn of their self-efficacy. By empowering themselves and doing this entirely on their own, their achievement is that much more significant.

I hope you’ll join me in celebrating this incredible work at 11 am on Wednesday December 11th at Rosehill Community Center, 19 Lambson Lane, New Castle, DE 19720, as the Banking Desert Initiative opens its first financial service center with Del-One. Rosehill will host an interactive teller machine (ITM), as well as in-person with a teller three days a week. Gulftainer’s Training Facility at Elbert Palmer Elementary School and William Penn High School will also host credit union services soon – and with the passion of this community behind the effort, I know we will see many more openings in the future.