Will Hansen: Retirement Plans for a Modern Workforce

About Will Hansen: Will Hansen is a recognized leader in advancing the private sector retirement system, with over a decade of experience in employee benefits. As Executive Director of the Plan Sponsor Council of America (PSCA), he oversees the strategy and operations of the 75-year-old organization, equipping retirement plan administrators with essential education, advocacy, and resources. In his role as Chief Government Affairs Officer for the American Retirement Association (ARA), Will spearheads legislative strategy and outreach for an organization representing 35,000 retirement plan professionals. Through his work with policymakers and stakeholders, he is driving efforts to expand retirement plan access and coverage, shaping a more secure financial future for millions of Americans.

In this episode, Shannon and Will Hansen discuss: 

• Addressing the U.S. retirement savings and coverage gap
• Legislative efforts to improve access to retirement plans
• The impact of financial literacy on retirement readiness
• Innovations in retirement plan design and accessibility 

Key Takeaways:

• Auto-enrollment and auto-escalation features have been proven to significantly boost retirement plan participation and savings, but their adoption remains uneven, with small businesses particularly lagging behind due to perceived implementation complexity.
• Recent legislative measures, such as pooled employer plans (PEPs) and the streamlined "Starter K" 401(k) plans, provide simpler, cost-effective solutions for small businesses to offer retirement benefits, often supported by tax incentives that encourage adoption.
• As gig economy workers make up a growing portion of the workforce, they remain underserved by traditional retirement plans, necessitating innovative solutions like government-supported savings initiatives tailored to their unique employment models.
• Despite the pressing need for financial wellness programs to address barriers like debt and poor financial literacy, fewer than 40% of employers offer these programs, highlighting a significant opportunity to educate employees and improve retirement outcomes. 

"More Americans have joined the gig economy, which is one area where I think there is definitely room for improvement, and we could even see some federal assistance in setting something up to encourage more gig workers to save for retirement." — Will Hansen

Connect with Will Hansen:  

Email: whansen@usaretirement.org

LinkedIn: https://www.linkedin.com/in/hansenw/

Connect

Transcript

SPEAKER_01 0:00

Welcome to the Gap, a podcast designed exclusively for financial advisors and employers seeking to enhance their retirement plan offerings and bridge the gap in America's retirement security. We talk to change makers and dive into innovative strategies, compliance updates, and best practices to help you provide top-notch retirement solutions, stay ahead of the future, and ensure a secure financial future for all Americans. Here's your host, Shannon Edwards.

SPEAKER_00 0:27

Hi, I'm Shannon Edwards, your host and the owner of TriStar Pension Consulting. I would like to welcome all new listeners to our podcast. I started this podcast because I have a passion for helping Americans achieve a dignified retirement. This podcast is designed to help improve lives by sharing ideas for closing the gap that America has in both retirement plan coverage and retirement savings. Today, we are honored to welcome a distinguished expert whose career has been dedicated to advancing the private sector retirement system. With over a decade of experience in employee benefits, Will Hansen is a passionate advocate and leader in the field, helping to shape the future of retirement planning for millions of Americans. As the executive director of the Plan Sponsor Council of America, Will oversees the strategy and operations of this respected 75-year-old organization, which equips retirement plan administrators with the education insights and advocacy they need to excel. From offering professional credentials to hosting roundtables, webinars, and conferences, Will ensures PSCA members stay ahead in an ever-evolving industry. In addition, as the Chief Government Affairs Officer for the American Retirement Association, Will leads the legislative strategy and outreach for an organization representing 35,000 retirement plan professionals. Working closely with policymakers and stakeholders, he is driving initiatives to expand retirement plan access and coverage, helping secure a better future for countless Americans. A fun fact about Will is that in late middle school and early high school, he really wanted to become a chef. Fast forward to today, and he has very limited cooking skills. Thank you, Will, for joining us. I really appreciate it. First, what I'd like to ask you is to tell us about your personal journey, how you ended up in this field of retirement planning and employee benefits, and what inspires your passion for advancing the private sector retirement system.

SPEAKER_02 2:26

Thanks, Shannon. Really excited to be on your podcast and thrilled to spend some time with you today. So my journey in retirement uh policy and planning probably starts back in law school, uh, where I was deciding where I would want to specialize. And I went to law school thinking I would be uh some sort of lawyer in the courtroom. So prosecutor, defense, you know, and I enjoy public speaking and being in the courtroom. But I think I quickly shifted uh my second year of law school, started taking income tax, uh, and I got really excited about that course. So who knew uh that income tax would uh be something that I would enjoy? Uh and it was that plus meeting uh the people in the benefits field. I started going to the American Bar Association meetings for employee benefits uh professionals and just fell in love with the people. People were great, the coursework was great. And so I specialized, got my master's in law in addition to my JD uh in employee benefits. Uh and that is really what kind of started it. Uh from there, I worked uh as a lawyer for a few years, uh, but quickly realized that I did not like the billable hour. Uh, luckily enough, I was in Washington, D.C. and could transition to policy. And that's when I made the jump from uh law firm life to Capitol Hill life, uh, working for a senator for a number of years uh handling economic policy uh in addition to pension uh and benefit policy, which was uh an adventure of a lifetime, love to you know be of service to the federal government and to uh the US Senate. Uh and then from there, I took a little break. You know, I worked in the Senate during the recession, 2008, 2009 era to 2012. And so economic policy was at the forefront, it was exhausting. So I moved to the West Coast, took a little break, and landed in HR, uh, which was uh a great way for me to hone uh my legal skills and my policy skills and benefits and actually see how uh those uh benefit plans are implemented in reality. So I oversaw retirement and healthcare for Fortune 200 uh company. Uh, and then that's what uh did that for a few years, but knew that HR was not my lifelong uh goal, uh career goal. And so I came back to Washington, D.C. And that's when I started advocating on behalf of uh employers, advocating on behalf of other professionals in the retirement sector uh to really strengthen uh the retirement uh security in America today.

SPEAKER_00 5:01

Awesome. Yeah, that's a great story. So tell me, talking about today, how would you describe the current state of the retirement savings gap and the retirement plan coverage gap in the US? And are there any surprising trends or statistics that illustrate the scope of these challenges?

SPEAKER_02 5:19

I you know, current present day. Uh, you know, whenever you're analyzing, I think something present day, you want to compare it to the past uh and see if we have made progress. And we have. So the current system today is light years better than the system that we had uh 10, 20, 30, 40 years ago. You know, dating back uh to 50 years ago uh with the implementation of ERISA, the Employee Retirement Income Security Act of 1974, that was implemented because the defined benefit pension system in America was failing. Uh, there were one, not a lot of people covered by pension plans, and two, the pension plans were going bust. Uh, and so they needed to build in protections uh for your everyday um American. Uh and so what that did is one, built in protections, and then two, uh kind of unveiled our new system, unveiled the new defined contribution uh system where many, many more millions or tens of millions of Americans are now covered by a workplace retirement plan. So if I'm comparing it to the past, we're doing great. Can we do better? Of course. Every system is not perfect. Uh, and we definitely need to uh ensure that more Americans have access to a workplace retirement savings plan. Uh, and the reason why it needs to be a workplace retirement savings plan is because you are anywhere between 12 to 15 times more likely to save in an employer plan than just saving on your own in a savings account in your own IRA. So there's definitely things that we need to do uh to ensure more small businesses in particular are providing a retirement plan for their employees.

SPEAKER_00 7:04

Thank you. And you brought up a good point now that you said that. So there have been a lot of stories in the news lately, over the past year, about you know, the 401k being a failure and we should go back to the days of the old pension plans. Can you kind of elaborate on that? Because I know that most of us in the industry working in the trenches believe that they're getting that story wrong just because there's so were so few people covered by actual pension plans back then and how much coverage we have increased.

SPEAKER_02 7:35

Yeah. So for a lot of those studies or white papers, there's two flaws. First is uh they don't take into account Social Security. Uh so anytime we're talking about uh, you know, your ability to retire, we go back to the old mantra of the three-legged stool. Uh, so your social security, your um private retirement plan, and your individual savings. And a lot of those studies, research, white papers just don't take into account uh the two other pegs. So they don't take into account, you know, savings and or just other ways that you're gonna have income or assistance from family. And it doesn't take into account Social Security. And I so when you take those three things into account, I do think that our system is a lot stronger than what those white papers are trying to convey. The other flaw in them is a lot of them are uh just kind of subjective, you know, or based off of subjective research. So they're going out and asking people, you know, do we have a retirement crisis in America? Yes or no. You know, do you have enough of saved for retirement? You know, yes or no. If you ask somebody who, you know, probably does have enough for saved for retirement or is on track to, they probably still think they don't have enough saved for retirement. So they're probably gonna say no. If you ask somebody if you know, we are have a retirement crisis in America, you probably could ask them if they're also going through like a middle life crisis right now. And they're probably gonna say, yeah, you know, why not? Crisis, bad. Yes, we should say that. So those reasons that research or that survey is just not uh, you know, it doesn't equate to actual crisis in America. I mean, another great statistic to look at, and I don't have the exact numbers, is you know, you date back to when pension plans are around or when Social Security was launched, the poverty rate amongst older Americans, I think was like 30%. Fast forward to present day, the poverty rate for older Americans is about 10%. Now, 10% is still too high. Uh, but it goes to show that, you know, when you compare it to the past and the past system that we had in place, we are doing better when it comes down to metrics, not just subjective questions that you are asking, you know, general Americans.

SPEAKER_00 9:45

Right. I'm glad you pointed that out too, because I I've been saving for retirement since I was 18. You know, the first job that I had out of high school, somebody convinced me to start putting money in in a SARSEP. And I've so I've been saving since that. But if you asked me today if I felt like I had enough to retire on, I would still probably tell you no. Because, you know, you hear all of these things too about, oh my gosh, when you finally retire and healthcare expenses and everything's going up and we're living longer. So I think most of us would say no. And you're right, it's not based on facts or anything that I know personally, it's just based on a feeling that I have right this minute.

SPEAKER_01 10:20

Right.

SPEAKER_00 10:21

So tell me, what do you think some of the primary reasons are that so many Americans don't have access to employer-sponsored plans? And how are those reasons evolving or how have they uh evolved over time?

SPEAKER_02 10:36

The so there's two reasons. Uh, the one that I think will you know help in answering your second question on how it's evolved is the gig economy. You know, there's just so many more millions of Americans who are uh doing multiple jobs and they're not tied to one specific employer. So they're the independent contractor, they have their own LLC. Uh and you know, I think as the you know, more Americans have increased in becoming that gig part of the gig economy, uh, that is the one area where I think there is uh definitely room for improvement, uh, where we could uh even see some federal assistance and setting something up uh to encourage more gig workers to save for retirement. And then the second area is really just small businesses, you know, small businesses thinking that a retirement plan is too complicated. Uh, I think the industry, uh, the retirement industry has recognized that. And just within the past four years, uh, we have uh implemented a lot of legislation and now regulations are coming online, and now we're starting to see the products come online. And I'm talking about pooled employer plans uh specifically and other improvements uh just to make it simple for uh small businesses. So, besides PEPS, pooled employer plans, also this year seeing the starter K, which is the bare bones 401k plan. These are the types of products that we need to get in front of small businesses and say, hey, it's an easy launch for you to just set this up. There's low compliance, low cost, even paid for um through a tax credit. Uh, so start here and let's check back every year and see what we need to do next uh to improve your retirement plan.

SPEAKER_00 12:19

You answered my next question. So thank you. So the next thing I'll ask you is auto enrollment features. How effective do you think the auto enrollment feature is in a 401k plan as far as increasing savings? And also now that we have these state level auto enrollment plans, how do you feel those are helping close the gap as well?

SPEAKER_02 12:43

Uh love auto enrollment. Uh, you know, I think all the data shows that auto enrollment has done a lot to uh not only one, just cover more people, you know, get people saving for retirement, uh, but then by doing so, obviously the next step is people are having more money in their retirement plans because of auto enrollment. And I think uh we need to do more uh to you know ensure that more plans are utilizing auto enrollment, especially amongst the small employers. You know, most large employers, mid-sized employers now auto enrollment sort of standard. Uh small employers where we need to see a big increase in more of the auto enrollment. And then from there, we should see more auto-escalation. So I think uh, you know, the data shows that auto-escalation, there's only somewhere between 10 and 15% of plans, I think, are doing auto-escalation, uh, which is a huge jump from a few years ago. And that's coming from the PSCA annual survey of defined contribution plans. Uh, we need to see more folks doing auto-escalation. And I think a lot of employers, one, I think they might be a little skeptical about it or think it's hard, but just work with their record keeper, their TPA, and get it done. Uh, because I think in the end, it's a pretty easy thing for them to implement. And then next up is as you yes, but state plans. State plans are, I think, doing an amazing job at really just honing in on those small businesses that don't provide a plan. So, yeah, it is a requirement to offer a plan in those states that have a state secure choice plan. Uh, but all we're seeing is positive news, you know, from those states. So uh one, they are closing the coverage gap. They're getting more small businesses to provide a plan, which means more participants, more employees are covered, saving for retirement. And then I think, you know, there's always this level of nervousness where there's a requirement in place, but all of the kind of anecdotal evidence shows that, you know, these states, when they set it up, they're working with these employers. They're holding their hand, walking them through the process. It's not seen as like a punishment, you know, for them to now have to enroll their employees into the auto IRA state secure choice plan. It's seen as like a kind of a partnership, you know, with these small businesses, which is great. So looking forward to more states coming online and providing that plan. And I think that also the data is kind of showing that, you know, in the states there are those requirements. Um, we are seeing more 401k plan creation. So now that there is a requirement, the small businesses that have been holding out on providing the plan are like, all right, you know what? I'm just gonna go ahead and offer a full-blown 401k plan to my employees, which is great.

SPEAKER_00 15:16

Yeah, we've seen it. We're not in a state, me personally, we're not in a state that has a requirement, but we've seen it here just by the other states having requirements. And, you know, what I really like too is so many times once we get a small business setting up a 401k plan, maybe that small business normally before would not have masked or anything else. But when we start talking to them about the benefits for the owners, now that they're having, you know, now that they're going ahead and setting it up, well, okay, let's get a benefit for the owners. So we're seeing, you know, then put in safe harbor matching and things like that, you know, even a few years ago before all the mandates we wouldn't have seen happen. So I think it's been really beneficial for the employees, especially. What are the main obstacles that you see working with plan sponsors? What are the main obstacles that you hear about preventing individuals that do have access to retirement plans from actually saving adequately? And how can plan sponsors help overcome that barrier?

SPEAKER_02 16:13

Yeah, where I see that, and this was actually, we did a great panel at the ERISA 50th celebration on I called it the external forces panel. So, what is what are things that we can't control for in the retirement system? So, you know, you know, Shannon, your company, you're out there just encouraging more people to save, more companies to provide a retirement plan, but sometimes you're just always going to hit a barrier. And there's a lot of things going out there. There's, you know, education's expensive, healthcare's expenses, uh, real estate is expensive. Now there's people who have all this credit card debt andor other debt that's out there. So from a just a financial landscape, uh, there are so many other pressures that are impacting people's ability to save for a retirement, even if they have you know access to a retirement plan at work. And unfortunately, like I don't have the answer, you know, on how we can uh alleviate any of those uh pressures. Uh, the only item that I think that's within our plane that we can work on is increasing financial wellness products. So we are, we meeting, I think employers are sometimes seen as kind of those you know entities that can provide education and other tools to employees. And if you look at PSCA's annual survey, it always shocks me that uh it's less than 50%. I think it's actually even less than 40% of employers that offer a financial wellness program beyond just like basic budgeting. So even though it's seen as kind of like a really popular topic and everyone's doing something in financial wellness, in actuality, it's less than half, you know, of employers that have implemented some type of financial wellness plan. So I do think that's one area that we can and should explore legislative, regulatory, I mean, ways to incentivize more employers to offer financial wellness.

SPEAKER_00 17:58

Thank you. Yeah, that was my next question what you thought the role of financial literacy, financial wellness was. So thank you for answering that. One question that I have kind of overall is how do the savings and coverage gaps affect the broader economy, in your opinion? And what are the long-term consequences if we don't get these issues addressed?

SPEAKER_02 18:18

Yeah, there's been a lot of research, I think, done, and I don't have specific data offhand on how a lack of savings then just impacts local, state, and federal governments' budgets from uh really the safety net programs. So anywhere from uh you know food stamps to Medicaid to other just social services that uh whether it's a local government, state government, or federal government applies, you know, the less that an individual has saved for retirement, the more that those safety net programs have to spend, you know, on those individuals. So that I think is in of itself, you know, the one of the primary reasons why we need to encourage, you know, greatest greater savings, but first and foremost, getting more people access to a plan. So there's legislative policies, hopefully, that are floating out there that would really continue to encourage uh, you know, small businesses to provide that plan.

SPEAKER_00 19:11

What advice would you give to financial advisors and plan sponsors who are looking to make a meaningful impact in their roles, particularly in today's dynamic regulatory environment?

SPEAKER_02 19:22

You know, for plan sponsors in particular, I think it's just education. So the more that I think a plan sponsor is educated on their plan and understands their plan, the less time that they are need to spend on maintaining that plan or, you know, digging into the weeds on whether or not they're doing XYZ correct with respect to their plan. And I think any efficiencies that they can find on operating their plan means that they then can spend more time on educating their participants about the uh great uh features, design features about their plan, enhancing their plan. Uh so less compliance burden equals more, you know, uh focus on the participant. And I think that less compliance burden just comes through education. Uh PSCA Plan Sponsor Council of America has a great uh wide array of education. First and foremost, our premier credential called the certified plan sponsor professional credential, which you go through that, you get the ins and outs of the 401k plan. And on the advisor side, I think it's the same thing. You know, just continue to educate yourself. The National Association of Plan Advisors, uh, which is our one of our premier organizations under the American Retirement Association Umbrella has a lot of great education out there to help advisors uh become smarter uh when it comes to then educating plant sponsors on a lot of the great features that are out there, a lot of new trends, design trends with respect to retirement plans.

SPEAKER_00 20:47

Yeah, and I have the opportunity to send some of my clients through the plan sponsors course. And every bit of feedback I've gotten is that it was amazing and that they loved it. And I actually sat through Napa's course for financial advisors. I am not a financial advisor and I'm I don't sell investments, but I sat through their course just to get a feeling for it because I end up educating a lot of financial advisors here in my home state who maybe aren't involved with NAPA, et cetera. But I wanted to kind of see what the credential education looked like because I know what our education, um, the education that we have through ASPA is amazing. And both of those education products were just fantastic. I was really impressed with all of it. So, how does the American Retirement Association? I'm going to shift gears on you a little bit. So, how does ARA define its role in addressing the retirement plan coverage gap and what makes its approach unique compared to other organizations?

SPEAKER_02 21:46

You know, our role is defined through our uh primary goals when it comes to policy, and that's to uh, you know, increase uh retirement security in America. And we think that the way to increase retirement security in America is. First and foremost is to increase coverage. So increasing access to a plan through work. And then two, enhancing the private retirement system, you know, in America. So I think when we have a pretty simple goal, we're able to then uh you know apply uh the various steps to accomplish that goal. And we've seen that and you know, in the past uh three to four years, we've had two major retirement bills signed into law, both of which were widely bipartisan, uh, which is very helpful to have something that is bipartisan in Washington, DC is limited. So I'm very happy to work in an area where we do try to do everything in a bipartisan manner. Uh and I'm looking forward to another one, hopefully in a few years, where we can get it across the finish line and continue to just make these small enhancements uh to the private sector retirement system in America so that we can continue to close that coverage gap.

SPEAKER_00 22:53

So small businesses often struggle with implementing retirement plans. We've touched on that a little bit earlier in the podcast. What initiatives or tools has ARA developed to make it easier and more affordable for small employers to offer these benefits? I know we have the education tool, but what else is ARA doing to help small business owners be able to offer the benefits?

SPEAKER_02 23:15

Yeah, we are trying to partner uh with a number of associations out there really to just kind of get our education materials out there and not only just education materials, but just some documents that just kind of show that, hey, it's pretty easy to offer you know a 401k plan. So we in the past few years have been partnering specifically with some minority organizations like the National Black Chamber and the National Hispanic Chamber. And through that, I think what we're learning is that we need to dig deeper, get down to some of the local chambers or really just any local business association. So the more that we can do that, or the more that we can encourage advisors and other professionals that are in the retirement sector to work with the associations, the chambers that are locally, I think is what is really going to kind of get us across the finish line. So, you know, that is primarily, I think, what we have done outside of legislation, but always open to new ideas as well.

SPEAKER_00 24:10

What role do you think financial advisors, plan sponsors, and policymakers play in closing these gaps? And what actions can they take right now to make an immediate impact, especially for instance, if financial advisors or plan sponsors are interested in getting more active in advocating for that? Yeah.

SPEAKER_02 24:28

So I think plans, I mean plan sponsors, if they're a plan sponsor, that means they're providing the plans. They're already doing amazing. Uh, the fact that they're offering something for their employers. Uh, you know, next after that, I think what we're focused on at PSCA for plan sponsors is how to help the plan sponsor uh capture the right data about their plan participants to determine if they make small tweaks, will that encourage you know more savings? So this is making tweaks to maybe some of the distribution options. So uh sometimes I think plan sponsors forget maybe how many loans that they can do or how many hardships that they can do. And while it's important, I think, to have loans to have hardships, there still are small tweaks that you can do to maybe prevent leakage from the plan that is not necessary. Uh, then in addition, I think this is now an opportunity, and a lot of plan sponsors are starting to look at their matching, you know, uh design. Uh, you know, it's you know, I think maybe 20, 30 years ago, everyone just kind of did the same match or a very similar match. And now folks are trying to look at different ways they could do a match that maybe incentivize more of their lower income, middle income uh you know, participants versus their higher income. So there's always small tweaks that they can do. Uh, and then in addition to that, there's you know the new student loan matching uh program that's out there. If they have a lot of participants with student loan debt, maybe this is a great way for them to add that design feature. Uh, there's new distributions on emergency savings. So in trying to encourage folks to you know utilize or tap into emergency savings before they take a big loan or a big hardship from their plan. So lots of little small programs that are popping up that I think plan sponsors should start to look at in more detail. But first off, I just high five to them for having a plan. And now, next, let's dig in a little deeper.

SPEAKER_00 26:12

Thank you. So as we come to an end, is there anything that you want to add? Any final thoughts, you know, about ARA, about PSCA, about what we've talked about today.

SPEAKER_02 26:23

Oh no, I'm, you know, one, thank you uh for having me on the show today. Uh it's a privilege to spend this time with you talking about, you know, really great topic. Uh, you know, with respect to uh final thoughts, you know, I always just say data is key. So the more data that you can get on your plan, how effective your plan is being, uh, work with your consultants, your TPAs, your advisors, your record keepers to see, you know, how they can help you uh in understanding more about your participants and more about your plan so that you can just make your plan, you know, even better.

SPEAKER_00 26:55

You know, and one thing that I think we didn't touch on, you all do an annual survey through PSCA. And I know I, as a plan sponsor, because I sponsor a plan as well for my employees, and I am a member of PSCA as well. But I take the um, I take that survey every year myself. Um, and then by taking the survey, don't they get a copy of the annual survey so that they can see it and compare themselves and kind of benchmark their plan to other plans?

SPEAKER_02 27:22

Yeah, definitely. So the 67th edition actually just was released a couple of days ago, um, last week. Uh so it's now out for purchase if you happen to not take the survey. And then we will be pushing out uh the opportunity to complete the 68th edition uh sometime probably around March or April. But you can always go to psca.org and look under industry content to find the link to the current survey where you can uh purchase that, or just stay tuned for more information on the 68th one uh in 2025.

SPEAKER_00 27:56

Perfect. Thank you, Will, so much for joining me today and for sharing your insights with me and my audience. Um, can you tell our guests how they can get in contact with you if they want more information or if they have any questions?

SPEAKER_02 28:07

Yeah, I'm always happy to receive emails. So my email is W Hansen, W-H-A-N-S-E-N at USA retirement.org.

SPEAKER_00 28:18

Perfect. Thank you. Thank you everyone for listening to the gap. Be sure to check out the show notes for important links, retirement plan resources, and more at priestarpension.com. While you're there, you can sign up for our information packed newsletter. And if you enjoyed the conversation, follow our podcast, share it, tell a friend about it, and most importantly, rate and review it on Apple Podcasts or wherever you get your podcasts.

SPEAKER_01 28:43

Thank you for listening to the gap. Be sure to check out the show notes for important links, retirement plan resources, and more at TryStarPension.com. While you're there, sign up for our information packed newsletter. And if you enjoy the conversation, follow our podcast, share it, and tell a friend about it. And most importantly, rate and review it on Apple Podcasts or wherever you get your podcast. Thanks for listening.