Can Keystone Saves bill rescue Pa. from fiscal cliff?

Financial security in retirement is important for all Pennsylvania taxpayers, and especially for Pennsylvanians aged 65 and older. But what happens when residents do not have enough money for retirement? 

Such is the dilemma facing Pennsylvania as the state seeks to deal with a looming fiscal crisis – “a fiscal cliff,” Pennsylvania State Treasurer Stacy Garrity called it – created by insufficient retirement savings. 

An online seminar addressing the impact of insufficient retirement savings on Pennsylvania’s fiscal health was hosted recently by Garrity and John Scott, project director for retirement savings for The Pew Charitable Trusts. Information in the online seminar was based on analysis prepared for the Pew Charitable Trusts by Econsult Solutions, Inc. (ESI), an economic consulting firm. 

ESI provided a 2018 analysis of economic and fiscal impact of insufficient retirement savings in Pennsylvania from 2015 to 2030 for the Pennsylvania Treasury Retirement Savings Task Force. Subsequent analysis of county-level impacts was undertaken by ESI for Pew in 2020. ESI’s report updates findings of statewide impacts of insufficient savings to cover the period from 2020 to 2035. 

According to ESI’s findings, Pennsylvania’s elderly population is expected to grow by more than 550,000 in the next 15 years, increasing from 19% to 23% of PA’s population. The share of Pennsylvania households headed by an elderly resident is expected to increase from 30% in 2020 to 36% by 2035. Pennsylvania’s dependency ratio is also projected to increase from 43 households aged 65 and older for every 100 working-age households in 2020 to 56 households aged 65 and older in 2035. 

As working age households are major drivers of tax base, the change in ratio creates fiscal pressure. The reason being there will be fewer taxpaying households age 20-64 to support an elderly population that is projected to grow from 2.49 million in 2020 to 3.04 million in 2035. 

“There is a growing share of older people, older households in the Commonwealth, but the tax base that’s supporting a lot of the programs that support the elderly has not grown as quickly,” Scott said. “So that’s going to be placing more stress on taxpayers in Pennsylvania.” 

How much stress was revealed by Garrity, who noted that two million Pennsylvanians, approximately 44% of the state’s private-sector workforce, cannot save for retirement at work. The resultant cost to taxpayers, she said, is more than $1 billion annually. 

“I really want to emphasize this point,” Garrity said. “Pennsylvania taxpayers are footing a bill of more than $1 billion per year to account for unprepared retirees. That includes costs for social services and lost revenue.” 

Garrity added that research conducted by the Independent Fiscal Office confirms that Pennsylvania will reach a fiscal cliff by Fiscal Year 2025-26. 

“Common sense says we should prepare for it now,” said Garrity. “And here’s another fiscal challenge for Pennsylvania: The research we’re discussing shows the retirement savings crisis will cost Pennsylvania a total of $17.8 billion through 2035. So that’s the scope of the problem.” 

The problem having been defined, what’s the solution? Garrity and Scott said one way to address the retirement savings crisis is to implement a simple, business-friendly plan to help working Pennsylvanians save for retirement. Not a government handout, Garrity emphasized, but a program that makes it easy for people to save for retirement. 

“The goal,” she said, “is to make it easy for people to save their own money.” 

In December 2021, Garrity and Rep. Tracy Pennycuick (R-Berks/Montgomery) and then-Rep. Michael Driscoll (D-Philadelphia) announced the introduction of “Keystone Saves”, a retirement-savings program for Pennsylvanians who do not have access to retirement savings through their employer. 

As is the case with automated savings programs across the country, Keystone Saves would enroll employees automatically in a voluntary individual savings account (IRA) to which they can use direct deposit to make regular contributions. 

Estimated to help Pennsylvania reduce state spending by close to $1 billion annually, Keystone Saves is supported by The Pew Charitable Trusts, the Pennsylvania Institute of CPAs, the American Association of Retired Persons (AARP), the United Way of Pennsylvania, the Pennsylvania Health Care Association, the Pennsylvania Association of Sustainable Agriculture, and members of the state’s General Assembly. 

As many employers are unable to provide retirement savings due to administrative capacity and high startup costs, state automated savings programs are seen as a practical solution to provide savings opportunities to workers who lack them. 

Scott noted that 12 states in the U.S. have enacted legislation creating such programs, and programs in six states are operational. Participants in state-sponsored automated savings programs have an average annual savings of $1,500 to $2,000. 

“These programs are showing this can be done,” said Scott. “This is a very feasible and practical solution.” 

The Keystone Saves bill has received bipartisan support in the Pennsylvanian legislature but has yet to pass. As Gov. Josh Shapiro is a Democrat who stresses bipartisanship, the opportunity exists to work with Garrity, a Republican, to guide the bill through the legislature. 

“The time to solve this problem,” Garrity stated, “is now.”

Robert Pullo receives United Way of Pa.’s highest award

York County businessman and philanthropist Robert W. Pullo is joined on stage by Anne Druck, president of the United Way of York County, during a ceremony Thursday. (PHOTO: SUBMITTED)

York County businessman and philanthropist Robert W. Pullo has been presented with the Keystone Spirit of United Way Award, the highest annual award given out by the United Way of Pennsylvania.

Pullo was honored Thursday during the United Way of York County’s 2019 Campaign Celebration at the Valencia Ballroom in York in front of a crowd of hundreds of people. He was nominated for the award by Anne Druck, president of the United Way of York County.

The Keystone Spirit of United Way Award was created by the United Way of Pennsylvania to recognize exceptional and sustained volunteer and philanthropic leadership. Criteria for the award includes the philanthropic impact the individual has in his or her community, along with personal time commitment and the ability to reach across community borders to highlight the interdependence of United Way chapters across the region.

“United Way relies upon the generosity of donors and volunteers to help make Pennsylvania communities stronger,” said Kristen Rotz, president of the United Way of Pennsylvania. “Mr. Pullo’s commitment to York County is exemplary, and United Way is honored to be one of the primary ways he chooses to invest in his community. His leadership sets a strong example for all of us and we strive to follow his lead serving not just York County, but our entire state.”

Pullo served the chairman of the board and CEO of Waypoint/York Federal Foundation, retiring from his banking career spanning 47 years. He joined York Federal Savings & Loan in 1976, leading the bank to become a publicly traded company and accomplished two mergers.

Pullo is considered one of York County’s most prominent financial leaders and philanthropists, having raised more than $100 million for York-based nonprofits. He and his wife, Donna, are longtime members of the Tocqueville Society through the United Way and were early supporters of the United Way’s Focus On Our Future early learning initiative, which celebrates its 25th anniversary this year.

“Mr. Pullo is a longtime donor, advocate and leader for United Way of York County, and a well-known champion for increased philanthropy with United Way and throughout York County and Pennsylvania,” said Druck. “He is an incredible example of what it means to choose service over self-interest. As a member of the United Way of York County Alexis de Tocqueville Society for more than two decades, his generosity and leadership has inspired others to echo his commitment to building a stronger, caring community.”

Originally from Somerville, Mass., Pullo lives in York with his wife. They have four grown children: Robert Jr., Julie, Susan and Tracey; five grandchildren; and two great-grandchildren.

Playing for keeps: How one company is tackling talent retention

Dasher executives Sharon Ryan and Cynthia Tolsma spent years observing the workforce at Harrisburg-based Dasher Inc.

“Though we consistently pay higher wages and offer comprehensive benefits to low-wage, economically fragile employees, we have concluded that doing so does not measurably improve employee retention, or drastically improve quality of life” said Ryan.

The company, which untangles complex information on behalf of its clients, needed to rely on its problem-solving skills to make those improvements.

Sharon Ryan, left, and Cynthia Tolsma are co-authors of the book, “The Talent Pool.” In the book, the two executives at Dasher Inc. in Lower Paxton Township offer a model for how to attract and retain employees. PHOTO/MARKELL DELOATCH
Sharon Ryan, left, and Cynthia Tolsma are co-authors of the book, “The Talent Pool.” In the book, the two executives at Dasher Inc. in Lower Paxton Township offer a model for how to attract and retain employees. PHOTO/MARKELL DELOATCH –

After searching in vain for a proven system, the Dasher management team developed its own model, the details of which can be found in a new book, “The Talent Pool,” by Sharon Ryan, Dasher’s CEO, and Cynthia Tolsma, its chief culture and engagement officer.

Identifying the issue

Based in Lower Paxton Township, Dasher partners with insurers and other organizations that serve people on Medicaid in areas such as enrollment, patient care and claims processing, according to its website. Clients range from global companies, to small businesses and nonprofits.

“Anyone who wants to send a message reliably and effectively is a potential client for Dasher,” said Ryan.

Ryan and Tolsma noticed many of their teammates were dealing with serious life challenges rooted in economic fragility. Recognizing that reality was the first step toward arriving at a solution for retaining those employees and growing their skills.

Communicating is a huge part of what Dasher does, so mapping out routes for employee success was a bit of a no-brainer.

“In the book, we describe our own path and the steps we took to help economically fragile people become economically stable,” said Ryan, noting that economically fragile people seek to maintain their dignity by trying to conceal the serious problems they are having, which can ultimately cause them to lose their jobs. “Through observation and conversation, we learned more about the impacts of having no safety net and the stress of managing daily crises.

“We learned that we had to go slowly, tread lightly and go much broader and deeper in providing support for this talented group of people if we were going to help them actually achieve their goals and be successful,” said Ryan.

In the end, Dasher addressed personal financial wellness, along with the health and well-being of each employee. But it was not mandatory.

“We don’t force anything on people. Changing life behaviors is difficult and each person has the freedom to engage with what’s being offered at their own pace, or opt not to participate,” said Ryan.

Another important part of the solution is to avoid being patronizing, according to Ryan.

“In our experience, low-wage, economically fragile people are very aware of the precarious existence that they have and mostly consider it undignified. That is why the idea of maintaining the individual’s dignity and pride flows through everything we do,” Ryan said.

How it works

The “Team Member Prosperity and Success Model” described in the book has helped Dasher, with a staff of 60, increase productivity and reduce turnover, while at the same time put economically fragile workers on the path to economic stability.

Part of the model goes beyond traditional benefits of health, disability, vision, dental insurance, 401(k)) paid time off. According to Ryan, Dasher pays a substantial portion of employee benefits so that workers can afford to opt for insurance coverage. “Offering health insurance in ways that make it easier to use and have access to benefits for those working at least 24 hours a week gives us an advantage in attracting and retaining workers,” said Ryan.

Financial wellness is also a part of Dasher’s model and includes a free wellness tool called SmartDollar and a starter emergency fund. Employees are incentivized to save $1,000, with $400 coming from Dasher.

“In order to save $600 a year and earn matching deposits from Dasher, it takes $12.50 a week deposited from an employee’s paycheck,” said Ryan.

Dasher has also instituted a “Gotcha” program in which employees accumulate points that they can turn in for cash. Co-workers can nominate a co-worker for a Gotcha award when they see someone performing acts of kindness, like helping a colleague.

Dasher also offers employees a daily routine for inspiring happiness and reducing stress. Dasher’s wellness practice offers four components: meditation, movement, thinking of others and writing in a gratitude journal.

Nontraditional benefits gain steam

Tim Fatzinger, president and CEO of the United Way of the Capital Region, said that offering non-traditional benefits is wise in an era where workers are sometimes hard to come by. His organization implemented a workforce development program two years ago.

“Twelve employers are currently part of the program and we are looking to expand that,” said Fatzinger, adding that an integral part of the program is building financial literacy with a long-term goal of self-sufficiency. The United Way might help by providing necessities such as transportation to a worksite by working with partners such as the Center for Community Building, which can facilitate access to public transit and ride-sharing services.

Kristen Rotz, president of the United Way of Pennsylvania, said that the United Way as a whole is becoming more involved in helping people in the community take care of essentials that might otherwise be a barrier to work, like child care and transportation.

“There are opportunities to innovate and get more people into family-sustaining jobs,” she said, indicating that now is as good a time as any to be thinking outside of the box. Unemployment is at historic lows and companies are hunting high and low for workers,

Real-world results

Since implementing its model, Dasher has seen higher employee retention rates.

“We retain more than 90 percent of our workforce in a very competitive market,” said Ryan.

Dasher also benefits from its focus on a socially responsible workplace, she added.

“We believe that every human being is of equal value and deserves to be heard,” Ryan said. “What’s more, we know that creating a company culture based on these principles leads to economic success, for both the business and its employees.”