Skip to content Skip to sidebar Skip to footer

Employee Benefits and a Changing Workforce

It’s been a year of conversation around benefits in Iowa as the legislature took up collective bargaining. It’s no doubt an emotional issue, no matter which side of the argument you fall. Sometime during the course of debate at the statehouse, my mother and I got in a pretty heated discussion about the issue, ultimately ending with me saying something along the lines of, “Well, nobody in my generation stays at one job long enough to be fully vested, anyway.”

I have no real data to back that up, but looking at my resume alone, and the fact that I currently have, in my name, an IPERS, FERS, 401(k) and 403(b) retirement account, it doesn’t feel like I’m too far off with the statement. With remote and freelance workers on the rise, it is apparent that how we do benefits needs to change with a workforce that that is continually on the move.

Portable Retirement Benefits Planning Grant Program

This idea is not all that new, but recently gained some traction with the Department of Labor (DOL). DOL made funds available through a “Portable Retirement Benefits Planning Grant Program” in July of 2016. In a press release, the DOL stated that in order to “adapt to the changing nature of America’s workplace,” the availability of approximately $100,000 in funding would be made available through the grant program for employees that wouldn’t traditionally have access to retirement benefits.

Another press release, from the office of Senator Warner (D-VA), applauded the grant program, stating that “funding will be awarded to nonprofit and other organizations to identify the existing challenges in the current retirement system for workers—particularly women, and those in lower-income occupations—and to expand and develop new portable retirement savings models.”

The DOL also stated “the program seeks to assist those workers who have traditionally lacked access to an employer-provided retirement benefits program (including independent contractors) or are otherwise less likely to have income from pensions or assets. Changing work arrangements in the high- and low-tech sectors place a greater importance on need for millions of workers – whether they are employees or independent contractors – to be able to take benefits from job to job to ensure greater retirement security.” According to DOL, one out of three workers today does not have access to a retirement savings plan, including half of workers at firms with fewer than 50 employees and more than three-quarters of part-time workers.

States Look to Address the Issue

Under President Obama, the Labor Department issued a rule that was supposed to make it easier for individuals without access to a retirement plan through an employer to create an account with the state. Under the rule, states would not be subject to the Employee Retirement Income Security Act of 1974 (ERISA), which is the federal piece of legislation that governs pensions and retirement funds for the private sector. ERISA was created to ensure retirement plans are “established and maintained in a fair and financially sound manner.” Herein lies the biggest debate of a state run portable retirement plan — can the state effectively enroll and manage plans for individuals? Other concerns include the idea that state-run plans could encourage some employers to discontinue offering their own plans (especially small business owners), and that without states being subject to ERISA, employee retirement savings might not be as well protected.

The debate might be a moot point, as the current administration is not a fan of the recently issued DOL rule. (A resolution to repeal the rule has passed both the House and Senate.) Many states including, California, Oregon, Illinois, Maryland and Connecticut are currently working on state-backed retirement plans—the repeal of the rule would make it increasingly difficult to establish state-run retirement plans.

Policies Need to Evolve with the Workforce

As how we work continues to change, the policies (local, state and federal) need to keep up. Government is not known for moving quickly, but the voices within the tech community have the opportunity to advocate for policies that protect and nurture this community.

This is a call to action to have the important discussions that impact the startup, tech, and remote worker world. These issues seem like they may not impact us for a long time, but they need to be discussed among stakeholders and taken to policymakers now. Without the input from the community, the issues remain largely the same—and life after retirement is not something to leave to chance.

Susan Gentz is the deputy executive director for the Center for Digital Education and a contributing commentary writer for Clay & Milk.

Employee Benefits and a Changing Workforce | Clay & Milk
A central Iowa ag-tech accelerator has secured more backers and finally has a name. The Greater Des Moines Partnership first announced the accelerator last year, naming four initial investors. On Monday, the Partnership said the program will be called the "Iowa AgriTech Accelerator" and named three new investors. The new investors include Grinnell Mutual, Kent Corp. and Sukup Manufacturing, all Iowa companies. They join investors Deere & Co., Peoples Co., Farmers Mutual Hail Insurance Co. and DuPont Pioneer. Each investor has agreed to put up $100,000 for the first year of the accelerator. Startups entering the program will receive $40,000 in seed funding in exchange for 6 percent equity. Tej Dhawan, an angel investor and local startup mentor, is serving as interim director until the AgriTech Accelerator names a permanent leader. Dhawan held a similar role with the GIA before Brian Hemesath was named as managing director. As interim director, Dhawan said his main job includes hiring the accelerator's executive director, establishing a business structure and initial recruiting for the first cohort. The accelerator will place few filters, such as location and product, on the applicant pool, Dhawan said. "When you’re seeking innovation, innovation can come from every corner of the world so why restrict ourselves," he said. One area the the AgriTech Accelerator won't recruit from is biotech. For its first cohort, the AgriTech Accelerator will work out of the GIA's space in Des Moines' East Village, Dhawan said. A future, permanent home is still to be decided. The accelerator's program will host startups from mid-July through mid-October, ending with an event connected to the annual World Food Prize. The GIA, which the AgriTech Accelerator is based on, also ends with presentations at an industry event. The accelerator has also started lining up a mentor pool. The Iowa Corn Growers Association, Iowa Soybean Association and the Iowa Pork Producers Association have agreed to provide mentors, as has Iowa State University. While the AgriTech Accelerator is loosely based off of the GIA, it will differ in its business structure, Dhawan said. The GIA runs through a for-profit model for both operations and its investment fund. The AgriTech Accelerator will have a nonprofit model for its operations and a for-profit setup for its fund. Dhawan said the nonprofit model is being used so the accelerator can better work with other nonprofit partners, such as trade associations. "These are all organizations that are nonprofits and can be amazing stakeholders without ever having to be investors in the accelerator," he said. "It becomes easier to work with trade associations in their nonprofit role when we are also a nonprofit." When it's up and running, the AgriTech Accelerator would be one of a handful of ag-focused startup development programs in Iowa. Others include the Ag Startup Engine out of Iowa State University and the Rural Ventures Alliance from Iowa MicroLoan. Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at mpatane@clayandmilk.com.
This Pop-up Is Included in the Theme
Best Choice for Creatives
Purchase Now