SEIU 775 Benefits Group

Home-care workers have historically been an underserved population when it comes to retirement savings, due to their low income and, often, lower level of financial literacy. They also typically work for small employers, which tend to lack a generous benefit program.

In Washington state, however, such workers benefit from membership in the SEIU 775 Benefits Group, which, in 2016, established the Secure Retirement Trust, a multiemployer retirement plan to cover collectively bargained caregivers in the Evergreen State.

“This retirement plan is going to be one of the first types of retirement accounts that a lot of these folks encounter,” says Sal Naidoo, deputy managing director for the Secure Retirement Trust. “There’s a general over-representation, in this populace, of people of color and first-generation immigrants, as well as an over-representation of women and of non-English speakers.”

The goal for this multiemployer plan was to make it as easy as possible for this group to save for retirement. To that end, the plan automatically enrolls caregivers—including part-timers—in the employer-funded plan after six months of service, giving them 100%, immediate vesting. The organization decided to make the plan entirely employer funded after researching the population and determining that, given their low to moderate income, there was little appetite for an employee-funded plan.

In the plan, which is trustee-directed, all contributions go into age-based target-date funds, with no options for hardship withdrawals.

“They kind of took the financial literacy piece out of it and left that part to the professionals,” says John Donohue, a principal in and Taft-Hartley defined contribution consultant and relationship manager at Milliman. “So there are fewer decisions for the caregivers to make, and it just allows them to see money coming into their account.”

While there are few options for participants to make decisions about their plan assets, the plan still communicates frequently with those workers, urging them to register and share their email address with the site.

Participants can access a retirement planning tool on the site by way of only two inputs—projected retirement age and hours worked—to receive an estimate of their account balance at retirement.

The 93.7% of participants who have shared an email addresses receive frequent emails about the plan, reminding them of responsibilities such as naming a beneficiary, registering their account and keeping their personal data up to date. Given the population of the plan, all of these communications are available in eight different languages.

Although the plan is completely employer funded, participants who want to contribute to their own retirement may do so through a Washington state individual retirement account. SEIU 775 Secure Retirement Plan’s recordkeeper provides a link to the Washington State Department of Commerce’s Retirement Marketplace on participants’ account portal; it is the No. 1 source of referrals to the program.

“That’s just a great additional method for participants who want to contribute on their own, even though it’s outside of the plan,” Donohue says.

While this is the only plan of its kind in the country, Naidoo says it’s a model that could be replicated in other states. There are a few other states working on similar initiatives, he says.

—Beth Braverman