Oregon will begin launching the nation’s first state-sponsored retirement savings plan on July 1 and it could eventually help 1 million workers to save at work.
To ensure every Oregonian has a chance to participate in the development of the plan, the State Treasury announced more opportunities to offer suggestions and feedback.
The plan was passed by the 2015 Legislature with a goal to give every Oregon worker a chance to save his or her own money for retirement through his or her employer. It will be available to those workers who do not have access to a qualified plan at work, such as a 401(k).
“We are pioneers in Oregon, and we are proud that Oregon will be the first to offer a state-sponsored retirement savings plan to help workers,” said State Treasurer Ted Wheeler, chair of the Retirement Savings Board. “We are committed to making sure the plan works well for workers and employers, and will make a dent in the massive retirement savings gap that threatens to overwhelm public services.”
The Oregon State Treasury is developing the plan with the guidance of the Retirement Savings Board, and is currently crafting rules that spell out how the plan will work. Treasurer Wheeler has encouraged robust engagement efforts to gather public and employer input as part of the rulemaking process. In the past month, Treasury has held roundtable meetings on both sides of the Cascades and those are continuing.
Based on the desire to gather more feedback, and partly in response to the weather-related cancellation of a public hearing, Treasury is extending the deadlines for the rulemaking process. The process will include a revised draft of the rules on January 13 in response to comments received, and a public hearing on February 15 to gather additional feedback. Written comments will be accepted until February 22.
Under the revised schedule, the rules would go into effect after board approval, most likely in mid-March.
In July, an initial pilot group of employers who volunteer will begin facilitating the plan and help ensure that it works well for everybody. After the pilot stage, the plan will then be phased in statewide, starting with employees of larger companies that do not offer a retirement savings option.
It is estimated that 64,000 businesses – most of them small businesses — will have employees eligible to participate in the plan.
The plan will be good for employers because they will be able to facilitate a retirement savings option to help their workers be more financially secure, without fiduciary risk. In addition, research shows that employees are more productive when they have less finance-related stress.
More than half of the Oregon workforce does not have an available retirement savings plan at work, and studies show that people are 15 times more likely to save if an option is available through payroll deductions. Workers who are eligible will automatically have a small portion of their own pay – initially 5 percent — deposited into their own secure retirement accounts, unless they opt out.
The plan will not be a pension, will not be connected in any way to the Oregon Public Employee Retirement Fund, and will not offer any matching funds or any guarantee of performance by the state or employers.
To inquire about being part of the pilot group or to get more information about the rule-making calendar, please contact Joel Metlen, manager of public engagement, at 503-559-4154 or Joel.Metlen@ost.state.or.us.
The Oregon State Treasury protects public assets and saves Oregonians money through its investment, banking, and debt management functions. State investment policies are set by the Oregon Investment Council. The State Treasury also promotes public outreach and education to help Oregonians learn strategies to save money, invest for college and make smart financial choices. You can learn more about the Oregon Treasury and Oregon Retirement Savings Plan on Twitter at @OregonTreasury.
