Could Resolutions Hurt Oregon's Retirement Plan for Uncovered Workers?
SALEM, Ore. – Two resolutions in the U.S. Senate have put Oregon's state-facilitated retirement plan dead in their sights, potentially rolling back rules that help private sector workers save for retirement.
More than half of Americans don't have access to a company pension plan at work. Under the Obama administration last year, the Labor Department provided safe harbor for states and cities to create payroll deduction plans for workers' retirement savings.
Oregon is one of five states that has created a savings program, known as OregonSaves. However, last month the U.S. House voted to block these rules.
"There's a tidal wave coming towards us as more and more people are set for retirement and fewer people have the opportunity to save for that retirement,” says Oregon State Treasurer Tobias Read. “We recognize that difficulty and wanted to make it easier for people to take control of their own financial future."
Read says even if the resolutions pass, the state plans to have its program operational by the end of the year, although passage could make it harder.
Supporters of the resolutions are concerned state-facilitated pension plans could compete with private-sector workplace plans.
Read says many small businesses don't have the capacity to provide and manage their employees' retirement plans, even if they wanted to. He says the state-facilitated program would ease that burden.
"This gives them, just like it does individual Oregonians, the chance to be part of a large pool, to have professional fund management and low fees," he explains.
More than a million people in Oregon don't have access to retirement savings options at work. One out of six Oregonians between 45 and 65 has less than $5,000 in retirement savings.
Read says despite the roadblocks currently faced by state programs, he believes history will look at them more favorably.
"I think this could be very much in the vein of those things that decades from now we take for granted and are surprised that there was as much controversy and difficulty in beginning it as there appears to be, and I think people in future generations are going to be really thankful that we got this going," he states.