Opposition

The Financial Services Institute (FSI), an industry lobbying group, recently announced that fighting Secure Choice plans will be among its top state legislative priorities this year. FSI, which represents independent broker-dealers and financial advisors, worries that Secure Choice plans will limit the opportunity of its members to work with small employers to create their own workplace plans.

"Some of these bills expressly state that financial advisors can't be involved in the process whatever," says Robert Lewis, FSI's vice president of legislative affairs.

FSI says it did not oppose the Illinois plan because it did not contain such a provision, but there were plenty of other opponents.

"It was very difficult to pass," says Daniel Biss, the state senator who sponsored and championed the bill. "When you talk about it to the public, no one can understand why you wouldn't try it. But the opponents fought hard to defeat it."

Key opposition came from state business associations and the American Council of Life Insurers (ACLI) in particular, which has been fighting Secure Choice plans around the country.

"We haven't been at the table helping to craft these plans," says John Mangan, ACLI's vice president of state relations. "Our industry has been in the retirement business for 100 years and we think we're doing a great job with employers who adopt their own plans."

Mangan concedes that the retirement savings gap is most acute in the very market Secure Choice plans aims to serve.

Mangan says there are better ways to close the gap, such as new low-cost, multiemployer 401(k) options for small businesses at the federal level, and at the state level, expanded savers credit and creation of certified networks of insurance providers who can provide low-cost payroll deduction options for employers.

These two approaches will be competing state-by-state over the next couple years.

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