ABLE Outreach: Opportunities Abound
The number of accounts established under the Achieving a Better Life Experience Act (“ABLE”) grew dramatically over the past year as individuals with disabilities embraced ABLE Plans. We also see that the number of accounts receiving contributions due to ABLE to Work have increased at a rapid pace. These two factors suggest to us that the time is right for ABLE Plans to expand communication efforts with employers. National Disability Awareness Month in October makes the timing of employer-oriented initiatives even more compelling.
Employer outreach is worth exploring because employers can efficiently communicate the advantages of ABLE to Work to their eligible employees and, ideally even facilitate ABLE account contributions through payroll deductions. ABLE to Work is important because it allows eligible account owners to contribute amounts in excess of the annual $15,000 limit otherwise applicable to ABLE and thus can be an accelerator for asset accumulation. On a side note, ABLE to Work is slated to sunset at the end of 2025, which means we have a limited window of opportunity for increased contributions.
The total number of ABLE accounts nationwide increased 46% – from 62,198 to 90,706 – during the twelve months ending March 31, 2021, according to ISS Market Intelligence (“ISS”). Meanwhile, between 2020 and 2021, ABLE accounts with contributions resulting from ABLE to Work increased 70%, according to the Annual ABLE Programs National Data Review presented by the National Association of State Treasurers (“NAST”) and ISS (the “NAST Webinar”) at a recent NAST Conference. Moreover, as shown by the chart below, the average amount deposited by each ABLE to Work contributor is substantially larger than the average ABLE account balance generally:[1]
This strong growth confirms that ABLE Plans are effectively addressing an important need overall and suggests there is significant potential for continued growth.
The Power of ABLE to Work
The 2021 Disability Equality Index from Disability:IN and the American Association of People with Disabilities makes it clear why working with employers presents a significant growth opportunity. Companies that focus on disability inclusion outperform their peers across key financial metrics, are better positioned for long-term growth, and have an edge when it comes to attracting and retaining people with disabilities – an essential source of talent and diversity in a tight labor market.
Part of the solution may be workplace benefits that support the financial well-being of people with disabilities, such as the ability to make automatic deposits to ABLE accounts overall and to facilitate the extra contribution amounts allowed by ABLE to Work.
From a behavioral standpoint, studies have shown that employees save most effectively through workplace-facilitated contributions. Data from the NAST Webinar confirms that ABLE to Work accounts are taking in large contributions, where “each ABLE to Work contributor has deposited an average of $14,900.”[2] For these reasons, we believe that adding a payroll contribution option could facilitate even greater ABLE account contributions.
Reaching Out to Employers
It should be relatively easy and inexpensive for most employers to integrate ABLE to Work contributions into their payroll processes – but first they must know about ABLE overall and understand its value for their employees and their business.
The NAST Employer Outreach Subcommittee has worked hard to create an employer narrative to promote awareness across multi-jurisdictional businesses nationwide. To that end, NAST is collaborating with the Voya Cares® Center of Excellence[3] to create marketing materials to raise ABLE awareness and educate employers. The foundation of Voya Cares’ outreach to employers is its position paper, “How employers can enABLE savings and enhance inclusion,” and is a great place for employers to start.
The NAST-Voya Cares collaboration demonstrates the win-win-win nature of industry outreach to employers: ABLE Plans can reach potential account owners, employers can retain talent and enhance inclusion in their workplaces, and eligible employees can improve their financial security.
By applying this national concept to each individual ABLE Plan, State and Plan Administrators can augment and amplify these efforts and educate employers in their own States about the benefits of both ABLE and ABLE to Work.
[1] Based on data from ISS Market Intelligence and data from NAST Webinar session, “Data 2.0, Annual ABLE Programs National Data Review,” June 24, 2021, Slides 27 and 29
[2] See NAST Webinar session, “Data 2.0, Annual ABLE Programs National Data Review,” June 24, 2021, Slides 27 and 29
[3] Voya Cares is a Voya Financial program that supports financial planning and education for people with disabilities
| This article has been updated as of August 23, 2021 |