Five Questions With: Seth Magaziner

SETH MAGAZINER is the general treasurer of Rhode Island. For the last two years, Magaziner has worked to implement a new financial services program for Rhode Island’s population with disabilities and their families.
SETH MAGAZINER is the general treasurer of Rhode Island. For the last two years, Magaziner has worked to implement a new financial services program for Rhode Island’s population with disabilities and their families.

Seth Magaziner is the general treasurer of Rhode Island. For the last two years, Magaziner has worked to implement a new financial services program for Rhode Island’s population with disabilities and their families. The program, dubbed “Rhode Island’s ABLE” program, allows individuals with disabilities and their families to save for disability-related expenses without putting at risk their eligibility for federal disability assistance programs. Magaziner talks with Providence Business News about the new program, how it works and how it’s adding some jobs in Rhode Island.

PBN: What is Rhode Island ABLE?

MAGAZINER: Rhode Island ABLE is a new program that provides accounts to Rhode Islanders with disabilities and their family members. These accounts have two great benefits: The first is that Rhode Islanders with disabilities and their families can save up to $100,000 without triggering the suspension of their federal benefits, like SSI and SSDI. The second benefit is that there is no federal capital gains tax on the earnings of money that’s invested in ABLE accounts. The benefit of the ABLE program is that it allows Rhode Islanders and their families to become more self-sufficient and not have to remain on the precipice of poverty just in order to receive their federal benefits.

PBN: How and why was it created?

MAGAZINER: It was created because Americans with disabilities that receive benefits are not allowed to accumulate more than about $2,000 of assets before being put at risk of losing their benefits. In 2014, Congress passed a law allowing states to pass ABLE programs. In 2015, we worked with the General Assembly to pass the Rhode Island ABLE program and after working on the implementation and program design, we were able to launch the program [last] week.

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PBN: What role have you played in launching it here in Rhode Island?

MAGAZINER: We worked with the General Assembly to write a bill for ABLE, and it passed in 2015 with unanimous support in both the House and Senate and was signed by the governor. … We’ve had to do everything from plan the investment lineups, marketing and work with other states to choose a service provider. One of the biggest challenges we had in implementing ABLE is that Rhode Island is a small state, and within a small state there’s a relatively small eligible population, so we had to figure out how to make these accounts accessible so the fees wouldn’t be so [high]. We ultimately decided to partner up with about a dozen other states and we all agreed we would hire the same program administrator. We joined this consortium and bid for a manager together, and it turns out that all the states agreed to hire a company called Ascensus [Inc.] to be the joint provider of the ABLE programs in all of the states. And we know them very well because we also hired them to do our CollegeBoundfund.

PBN: Who is eligible for ABLE, and why should they consider taking advantage of the program?

MAGAZINER: Anyone who is eligible for SSI or SSDI benefits is automatically eligible to open an ABLE account. Money that’s put into an ABLE account is shielded from suspension of federal benefits up to $100,000 and the ABLE account and money that’s put into an ABLE account can be spent on a range of eligible expenses from housing, transportation, education and counseling to assistive technology and personal support-services. And we’re actually not only going to be introducing a long-term savings component where people can invest in stocks and bonds, but we’re also in March going to launch a transaction account option where it will work very much like a bank account that ABLE account holders will be able to use for other expenses.

PBN: Will this affect Ascensus’ presence in Rhode Island?

MAGAZINER: Ascensus College Savings is a 529 plan administrator, and we hired them as part of our overhaul of the CollegeBoundfund last summer. They are one of the largest administrators in the country and the CEO just happens to be from Rhode Island, and I think he had been looking for an excuse to open an office in Rhode Island. They opened an office in Warwick, and they’re up to about 50 employees serving not only Rhode Island, but other states around the country. I spoke with the CEO, Jeff Howkins, and he told me, as part of the ABLE program, he expects they will hire 15 more people; five in Kansas City and 10 in Rhode Island.

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