Thomas Strasburger  0:09 
Hello. My name is Thomas Strasburger, I have 20 years in the K-12 space and safety and regulatory compliance. I'm  joined by Ed Dressel, who's with RetireReady, and Jim Westrum, who is a multi school division, CFO, across districts across Minnesota. And the idea behind this, we're going to discuss a highly misunderstood, but terribly important benefit that's available to public sector employees. And in this case, we're talking K to 12 teachers specifically. The problem is it's misunderstood, because people don't get a lot of education on it--what it's worth. This is an issue in every state. It's not limited to, you know, some to the United States, but but everyone up. So I'm going to read this this next part, so I want to make sure it's clear. So we're using an article that was written by Doctor Randy Mahlerwein, who's assistant superintendent at NASA public schools in Arizona, that appeared in the National Tax-Deferred Savings Association publication as a jumping off point in talking about K to 12 school financial literacy, or probably more importantly, lack thereof. There's an article that I will put in the chat before we're done with this session. If you want to click on it, it will take you to that article that Randy provided. So before we get started I want to ask my co-speakers introduce themselves and share a little bit of their background.

Jim Westrum  1:21 
Sure, I'd be happy to Tom. Thank you for stating that introduction. As you mentioned, my name is Jim Westrum. I've been a CFO or a school business official in a number of school districts in Minnesota for over 30 years. Our enrollment has ranged from 2000 students to 25,000 students in the districts that I've served, and my primary responsibility has been finance, budgeting, busses, transportation and facilities, in addition to employee benefits. So I also am deeply involved with the Association of School of Business Officials International, and I've been a content area leader in the area of risk intelligence and risk management, and my focus over the last several years has switched specifically to pensions and retirement readiness. Ed?

Ed Dressel  2:12 
It's a pleasure to be here. Thanks Tom. I've been in the financial planning services world for almost 40 years. I started on a 1099 and in 2007 I bought my partner out. Really focused on public sector employees--advisors working in that world. One of the uniqueness is that we have is we have state pension plans. We project cash flow from them, and can really help an advisor engage a client who's in a public sector employee--typically teachers--about their pension, the value of it, how it integrates with Social Security if they have it and their other financial assets. So having a unique perspective on the role of pension plans play and the ability to help teachers really appreciate the value of their retirement.

Thomas Strasburger  2:55 
So as suggested, we're using Dr. Mahlerwein article, and there are a couple couple of takeaways from it. He actually did two different interviews, and I'm going to read them so I'm going to read it to make sure I get his information exactly how he put in the article. So the first was with a 42 year old principal who had not saved for retirement, and the conclusions for why the savings  had not been done was because of a lack of understanding, a fear of the unknown, a feeling of intimidation, a lack of trust in financial professionals, and the senses that life is basically a paycheck to paycheck endeavor. In the second interviews with the 62 year old principal who felt he would never be able to retire because of ignorance of access to means to safe retirement, a feeling that the availability to retire is unattainable, making family stability in the moment the top priority leaving little margin for long term investments, and already allocating money to church and faith related commitments. So Ed, Jim, share your thoughts on why those positions are being felt by these these two principles.

Jim Westrum  3:49 
Tom, I want to thank you for sharing those details. Actually, what Dr. Mahlerwein found is very consistent with what I found over my career. I found that often teachers, principals, custodians, food service, and even our clerical folks and even people in the business office aren't fully aware of the value of their pension and how that braids with Social Security and also 403(b) or deferred compensation plans such as a 457, so the information that he had shared at the NTSA Conference, which both Ed and I were lucky enough to attend, is very consistent, and it's broad. It's across all school districts, across all employee groups. And I think part of it is because it's very complex--the retirement benefits. It's a little bit of--not really something that people are able to quantify. And that's one of the reasons why I am so excited about Ed and some of the work that he's done. Ed, can you share your experience?

Ed Dressel  4:54 
Yeah, and I think that one of the big problems in the world of financial wellness with public employees is they get a lot of siloed information. They get information about their pension plan from the pension system, and the pension system loves to talk about the details about it. But details is not what they want. And you can call Social Security and get a bunch of information about Social Security at the same time, and your financial advisor will talk about their investments. What's really needed is an integrated benefit analysis. Show me how they all work together to help fund my retirement. I've heard over and over from very smart people. I ended up talking to clients over the years--financial advisors that I'd run into-- and they consistently say, you can't believe how nice it was to see the benefits put together. And I understood them. The confidence that gives them in the 401 (k)world and in the private sector. We wish we could afford a pension system, but people in the pension world have no idea of their value and don't have a clue that they've got a great value. We envy it, but the people in it don't appreciate it. So there's a big opportunity for an expense that's already been put on the table. It's already being paid for to leverage that expense and help the employees have financial wellness, which will trickle down and really help them in their day to day activities and their confidence that they have in their future.

Thomas Strasburger  6:12 
Yeah, by the way, I echo that--being jealous, because being public or private sector all my career, I never had one available. So Jim, you became very interested in this whole benefits initiative a bunch of years ago. What got you into that?

Jim Westrum  6:26  
Yeah, I'm happy to share that. So in about 2008 the landscape in public education and across public sector employees changed significantly in regards to 403(b)'s and deferred compensation, or 457 plans. Prior to that, school district simply acted as a remitter, and we would withhold the dollars from employees paychecks and remit those to the appropriate investment companies. But in 2008 the Governmental Accounting Standards Board, or GASB, required school districts to take some additional responsibility and to actually adopt and become plan sponsors. So in 2008, many school districts throughout the country were actually doing this. And I took a particular interest, mainly because of my interest with ASBO, the Association of School Business Officials International, because I was in a leadership role. And so basically, my interests began in 2008. I started to attend the American Society of Pension Professional and Actuaries conferences to make sure I was fully up to speed to come up with emerging issues that I could share with my colleagues across all school districts in the country. Subsequently, what I did find is, I found that many of our employees just simply weren't aware of how the pension, Social Security, if they're eligible for Social Security, and 403(b)'s combined with personal savings and other assets really intertwined to provide a lifetime of income security. As I have shared with school board members over the years and actually with labor leaders as we are participating in negotiating contracts, quite honestly, this is a very favorable position to be in where an employee earns an income throughout their entire working career, and then upon separation of employment, they earn a portion of their income for the remainder of their life. And quite honestly, people know that this is available to them. They just don't know how advantageous and favorable it typically is until they retire. So thank you for asking time.

Thomas Strasburger  8:38 
So Ed, you're not necessarily a part of some of these associations that Jim is in because he's in the industry, but you've been, you've been involved, you've presented, tell us your experience.

Ed Dressel  8:50 
So I've been a part of NATSA, NTSA. My my partner, was a founding member of NTSA back in the 80s, and I've been attending since the 80s, and have been active in the industry. Next year is 40 years for me. I'm very passionate about it. And then I've also just started presenting at some of the ASBOs and ASPAs across the country about the benefits. During COVID I went and took my MBA and when I finished it, I thought, you know, I want to present at one of these shows. And I was working with a person from Arizona, the executive director, who had been a public employee before. When I called her and said, "Hey, I just, I want to up my sponsorship level and present." She said, "Two things, Ed. You have to get a sponsor. And secondly, you can't sell." And I said to her, "I don't know anybody in your state, so a sponsor for me is going to be impossible. And secondly, I'm not going to sell. I just wrote my MBA capstone on benefits and public employees and the value of pensions." And she came back and she said, "Ed, you can't sell." And I thought, "You don't believe me." And I had noticed, when I connected with her on LinkedIn, that her advisor was one of my friends who uses a software named Robert. And I said to her. I said, "Robert's your advisor." And she said, yes. And Robert had told me, every year he runs a state retirement system projection, integrated benefit analysis with his clients, and they just love it. I thought Robert was selling to me and he didn't need to. And I thought, okay, overplay your cards a little bit with me, but no problem. But I thought I'd better play that card with Barbara. And I said, "Barbara, every year, Robert runs a state retirement system projection with you and integrates your benefits of social security and your savings." She said, "Yes, and I love it." I said, "We wrote that software. And my frustration is with financial advisors, they make things too complex. They don't keep it easy for teachers to understand, and there's not enough of them that are doing it." And I said, "I want to go directly to the people that are spending the money on the pension, helping employers leverage their pension towards employee satisfaction." And she said, Two things Ed. First of all, I will be your plan sponsor, and you can go ahead and present." And the second thing, she said: "Thank you for writing that software, because it's made a difference in my life." And we're passionate about that--helping people towards retirement success through advisors and now direct through Pensionportal.com

Thomas Strasburger  11:08 
So Jim and Ed, you both have had interactions with people both in district as well as conferences or whatever. Share some of those interactions that you've had, and kind of the upside of them.

Ed Dressel  11:18 
So a few people I've run into over the years that have really made a difference. Barbara being one of them, and another couple at one HR event I was at. Two HR people stopped by and said that a couple teachers that showed up in their office this year sat down--they were just excited for retirement. They were ready to retire. They had a few months left. And they found out that they couldn't retire yet, and they started bawling because they weren't ready to continue their job. And a little bit more education earlier on would have alleviated their hopes, and they said, I never want to let that happen again. And it's getting the education out in a meaningful way. I had another at a presentation in an Oregon School District. A lady walked up to me after a presentation, and she said, "I'm really scared that my pension is not worth anything." Now she's in tier two in Oregon PERS, and it's just a great pension system. I know it. I'd love to be in tier two. And I said, "Why?" She said, "Because tier one people told me that I didn't have any value." Now, tier one was great. Tier Two is still great, not quite as great, but all the anxiety and the fear she ever felt was needlessly misplaced, because had she had a little bit of education, she would have found out that she had millions of dollars coming to her from the pension. It wasn't hard to see, and it's like, wow, I honestly wanted to tell her, I'll trade you, sight unseen, my 401(k) plan for your pension. Not that we could ever do that. That wouldn't be allowed. But I knew that her pension was gold compared to anything that I had. Her anxiety--we could displace it in just a few minutes by walking her through a calculation and showing her how well she was off for retirement.

Jim Westrum  12:57  
Yeah, and Tom, I'd like to add to the remarks that Ed just made. I have actually witnessed firsthand opportunities where information regarding someone's pension and the value of their pension has not only encouraged them to retire, but actually encourage them not to retire and to stay with the district. And I'll go ahead and share those anecdotes quite quickly. I did have a direct report of mine who recently became a grandparent, and she wanted to spend more time with her children and her grandchildren out of state. She had spent her entire career working in the school district, and I suggested that she not only contact her financial advisor, but then we take a few minutes to look at PensionPortal and kind of get a feel for where she may be. And I think she was pleasantly surprised, actually, very surprised, and subsequently met with her financial advisor and then submitted her resignation for full retirement. As a matter of fact, I just spoke with her today, and she's visiting one of her grandchildren today. On another note, I had some colleagues that I worked with way back in the 90s that were thinking of retiring and thought they should retire, along with a number of other people who retired during the Great Resignation but weren't quite ready to and when we met with them, we saw the benefits that working one, two or even three years. Really, it's the last several years of your career that can have an incremental, almost an exponential effect on your ability to retire with economic resources that provide a high level of confidence. So in both cases, simply by having a casual conversation 15 minutes or less, and then looking at the PensionPortal numbers, really encourage those folks to go ahead and seek financial advice. As you know, as my role as a school finance officer and any school district official, we don't give advice. We give education, and we encourage our employee to seek professional advice from experts in that field. So thank you for letting me share that. Tom.

Thomas Strasburger  15:07 
So Jim, if somebody doesn't--because not, not every school employee has a financial advisor--so if they don't, how does pension PensionPortal help that person to still understand what the retirement is going to look like?

Jim Westrum  15:18 
Well, what I can tell you is that school districts, once again, many of the results of looking at PensionPortal are simply formula driven. But once again, we cannot advise a employee. So what we do is we use simple formulas. I mean, quite honestly, I can look at an employee, and if they've worked for 10 years in my school district, I know that their accrediting percent was 1.7% per year, so it's highly likely they'll replace 17% of their income upon retirement. So the formulas aren't complex. It's just communicating them that are complex, and that's one of the benefits of PensionPortal. In 15 minutes the employee can put in their own information, and they can get their own personalized result. One of the reasons why school business officials and probably even HR directors don't spend a lot of time on this is each individual person has their own individual situation. So when they were hired, how long they plan to work, if they plan to provide in a survivorship option, or if they decide to retire early. There's absolutely no way that an employer can provide that information. But one of the things that I'm so thankful about is that we do have software that can do that for us, and it's interactive. The district doesn't actually take any responsibility for it. It simply provides the employee with access to it.

Thomas Strasburger  16:51  
Yeah, that's good. Education is a great thing.

Ed Dressel  16:53 
I'd like to add to that. I have a friend who ran a major department in a local city, one of the bigger cities in the state of Oregon. Not to throw him underneath the bus if I gave his name away, but he was completely unaware of how the value of his pension was, and when I looked at the numbers, I said, I think the income you're getting from the pension is more than you need. And that didn't resonate with him. So we had to sit down and I actually showed him the software. And it wasn't till he saw -- I said, "How much do you need?" And he told me, and I said, "Here's your pension." And he saw it graphically, and I didn't even have to put Social Security in there. And he just smiled really big. And he finally saw a picture of what it looked like. Smart guy who ran an department, very successful. I think the world of him. But he just needed a picture to see it. And he went away with confidence and a smile. He felt good about his retirement. So just helping people get a simple 30,000 foot view of their retirement, saying, "Here's what it looks like overall." Now you need to dove in the details a little bit, but it gave him a level of confidence he never had before, which is really a shame, because that really helps them in the employment years as they're going through them, to have a confidence in their future.

Thomas Strasburger  18:04 
You know, things I've learned in this process is things are in their own lengths. The 403(b) or whatever benefit 457, it has their their number, and pensions got its number, and all my other investments, or house or whatever, all different places and this, this brings it all together for one financial picture.

Jim Westrum  18:22 
Yeah, maybe I can add on to that as well. What I like the most about this is, once again, I think our state pension plans do an incredible job of educating about the state pension plan. I think Social Security and the Social Security website is highly valuable for people when they go visit. I do know that our 403(b)providers and our 457 providers, basically financial advisors to the school district that are now directly in a contracted relationship with the school district. They have really good information about their 403(b)s. I have never actually until recently, or until 2015, come across a fully integrated approach that's easily understandable and takes about 15 minutes.

Thomas Strasburger  19:14
It's good information. So based on your experience with with associations and and what have you, how have you all, the two of you, been able to utilize PensionPortal for educating administrators?

Jim Westrum  19:25
Well, what I was sure, once again, is I've been highly involved on a national level, but also on a state level. So I've been meeting with my colleagues in the finance area and in the HR area, and we do some peer-to-peer learning communities. So basically what we do is we get together. And our primary focus is primarily been on health insurance, how to contain health insurance premiums, how to contain health insurance costs. But when you look at it, public pensions and retirement benefits are actually a little bit higher on people's minds. So we think it's really important to continue to look at the entire benefit package, but as a reminder, our benefits, or our pension benefits, typically are a district contribution and a employee contribution are made to the state retirement system. And I'll just give you an example. In my own district, we had $100 million in salary, and we actually combined between Social Security, Medicare and our pension contributions, spent about $15 million. So that's about 15%. In addition, we typically would provide 403(b) or 457 matches of another couple million dollars. So when you look at the total cost to the district, and when I say cost to the district, maybe I should say the total investment in our employees, we're paying them 100 million in salaries, and we're paying them almost another 20 million in retirement benefits. I have been involved in a number of school districts where I've engaged with citizens who have financial experience. One of my groups was called the Citizens Finance Advisory Council, and I would meet with bankers, and I would meet with financial experts on a monthly basis. And one of the things that I kept hearing them emphasize is that it's so important for us to demonstrate to our employees the value of their benefits. It's not uncommon for people to think individuals in the private sector and their salaries probably are not comparable to the private sector, but in the public sector, we have pensions. Every state in the United States that I'm aware of has some type of public pension, and it's mandatory. It's not up to the employee to choose. It's mandatory participation. In some cases, we call that the golden handcuffs. I really kind of admired the fact that the states have made this, or made this, made this commitment to keep educators, teachers and other public employees in the schools and in their public sector employers by providing this really, highly valuable benefit.

Thomas Strasburger  22:20 
So it's a real--so basically, it's a really valuable tool to recruit, but also retain your employees.

Jim Westrum  22:27 
Absolutely. And I will share with you that I have used it to recruit. I've used it to recruit and make career employees into my business office. I've used it to recruit, perhaps maybe late career employees into maybe a custodial job or a food service job or a clerical job serving the community, which typically is the fabric and the largest employer of the community. School districts where I work typically are a major force and identity of an entire community. People are often honored to work in the school district, proud to work in the school district, and because of these pensions will receive a lifetime of some type of income flow by providing services to their community.

Thomas Strasburger  23:19 
So Ed, how did you come up with the idea for PensionPortal, and what is the--I mean, we talked over it a lot through here, but kind of explain the actual nuts and bolts purpose.

Ed Dressel  23:31 
So, having served the financial services district for over 30 years for a number of years back, I was pretty frustrated with the world of advisors. You constantly hear how frustrated people are-- from advisors that talk way too complex. And I've been speaking, and you can google my name, there's a lot of writing I've been out there, and it's like, keep it simple, keep it easy to understand, and keep it engaging. But that hasn't happened. And I'm not the only one saying that there's multiple quotes out there. And when COVID happened, I had a little extra time, and I would sit around, and I thought, you know, I've got all of this pension data. We illustrate cash flow from over 700 public pension plans across the country. And it's like, what can we do with this data that nobody else has? I went down several rabbit trails and started working in a couple different directions, and then I found this and started doing some research, and then wrote my MBA on on the idea--my capstone during my MBA--and really believe there's a huge opportunity. And having been out there at various trade shows, exhibits, both at the state level and the national level, I believe in it as much as I ever have. Hindsight is we released it when ESSERs money was running out, and school districts were tight on funds, as they were letting go of resources rather than growing them. But I anticipate, as things move forward, there's going to be a big opportunity. We have a number of school districts counties that are using it and have heard a lot of nice things where employees have appreciated it and value the information that they're getting. It's like--I remember one person saying, "Why weren't we given this before?" And just the value of it. It's the stun, and that'--I'm excited about our future.

Jim Westrum  25:11 
Yeah, and Tom, let me add to Ed's comments. The district that I work in, we actually were involved in collective bargaining, and our school boards really wanted us to communicate the value of the pension in addition to their current salary and benefit package, and we actually implemented the PensionPortal for all of our teachers. And the buzz in the break rooms and in the hallways was very favorable--so favorable that some of our other bargaining groups wanted to have access to it. So we subsequently extended that benefit, or the ability to use the PensionPortal, not only to our teachers, but to our custodians, to our food service, to our clerical and to our paraprofessional. Our principals, actually, were very excited to see it as well as some of our administrative staff as well. So quite honestly, I will make a confession that I have been working in schools for over 30 years, and I learned something myself when I first used the PensionPortal that was very exciting in in my own personal lives. So as Ed had mentioned, I think there's a real high level of value in using this simple tool. In simplicity is the key.

Ed Dressel  26:33  
One of the values we bring to that is to show what's the total income somebody's going to get in retirement from their pension system over their life expectancy. I was at one trade show, and was really quiet at the moment, and this lady walked up to me. She was young, so she's got a lot of years. Got COLA  going for her, for inflation for a number of years. But she said, "Can you run my number for me?" Because she wanted to see what she was going to get paid out. She was in a lower income state, but she's a business officer making decent income. And I ran her number, and her total payout over her life expectancy was over $3 million and I'm not joking. She had come up to me and said, "I'm an accounting finance major. I get all of this." But when she got to see what she was going to get paid out, her hands literally started shaking, and she had tears in her eyes, and she said, "I'm never leaving my job." And her employee satisfaction level, knowing her future was taken care of made me just smile. And it was fun to relate to her and go, you know, here's somebody that gets numbers, somebody who understands finance, but she didn't have a clue that the value of her pension was that high. And her ability to stay at her job and go, you know what, my future is taken care of. And I looked the way Jim's communicated it. You've got an income guaranteed for the rest of your life. So helping people really appreciate the investment school districts are putting into their employees can have a really big ROI on mental health, mental wellness and financial wellness all at the same time.

Thomas Strasburger  27:55  
So I think with that, we're going to we're going to end this session. Hopefully everybody learned something and has some good takeaways. And so thank you all for your time. There'll be a follow up screen which will have our contact information on it should you want to get in touch with any of us. And again, thank you for your time.

Ed Dressel  28:10  
Appreciate people watching this. Thank you.

Jim Westrum  28:13  
Thank you.