illustration by Karen Eland
Last June, Governor Brown signed a bill that makes it easier for Oregonians to save for retirement. The Oregon Retirement Savings Plan requires businesses in Oregon that don’t offer a retirement savings plan to automatically enroll their employees in the program and deduct a portion of their wages for it. Employees can choose to opt out, and employers are not obligated to contribute. The plan will be run by a private-sector investment provider, managed by the state and is expected to begin July 1, 2017. 1859 caught up with Oregon Treasurer Ted Wheeler (now Portland mayor-elect) who led the charge to implement this plan in Oregon. The bill passed largely along party lines, with Democrats in favor and Republicans opposed. Senate Republicans rejected our multiple requests to offer a counterpoint.
The Oregon Retirement Savings Plan will improve the financial future for every Oregonian. ere’s something about this plan for everybody to like: It will help as many as one million Oregonians by allowing them to save at work; it will help employers, who will be able to provide access to a low cost and convenient option, without fiduciary risk; and it will help every Oregon taxpayer, because increasing the rate of individual saving will reduce the need for expensive tax-financed safety net programs. is will allow more resources to be spent on other public priorities, such as schools and police.
Approved by the 2015 legislature and set to launch next summer, the plan will help address our state’s looming retirement savings crisis. Today, statistics show that only about half of Oregon workers have the ability to save through their place of employment and most people have saved little, if anything.
Nationally, the retirement savings gap is estimated to be between $6.8 and $14 trillion. The status quo is not working and that’s why the plan is so important. It will serve only those workers who cannot save today at work. Research shows that people of all income levels will save more, if they can save at work.
By offering Oregon workers a simple method to save their own money with payroll deductions, the plan will nurture a culture of saving and reduce the number of people who are forced to make tough life decisions, such as skimping on food, medicine and other necessities.
The plan is expected to be an IRA, which would be portable, could be rolled over and will be managed by professional firms. The savings will not be kept by the state and could not be accessed by the government.
We are working with workers, employers and financial experts statewide to develop the best-possible plan and to help make the future more secure for everyone.