Ore. Offers First-of-Its-Kind Retirement Plan for Workers
Friday, June 30, 2017
PORTLAND, Ore. – Oregon is stepping up to provide workers with another option for retirement savings. The state-facilitated OregonSaves retirement plan begins a pilot program on July 1, making Oregon the first state in the nation to get a savings program of this kind up and running.
OregonSaves is designed to give workers without access to retirement plans through their jobs a low-fee option to save for their future.
Oregon State Treasurer Tobias Read says the funds will also be portable.
"As they start their careers and move from job to job, taking these dollars, these accounts and these habits with them, that can only accrue - to their benefit and to ours," he says. "We all have a stake in this, of course, because when people retire with assets, it relieves some of the strain on our already-stretched state budgets."
Employees also will be able to opt out of the program at any time. The program will expand to larger employers in November.
The new program is expected to especially help small businesses that struggle to provide retirement plans for their workers, since finding and managing plans can be costly and time-consuming.
Critics of state-facilitated programs are concerned it could compete with private-sector workplace plans - but Read says the program is solving a gap in the market.
"Nearly half the people who are working in Oregon - almost a million people - haven't had access, and there's nothing that's been preventing the private sector from serving that segment up until now; they haven't done it," he explains. "So, I think we're filling a gap."
Under the OregonSaves program, employees will automatically contribute five-percent of their paycheck into a Roth IRA. Contributions will then increase annually to 10 percent of eligible pay. However, employees can change the amount they contribute at any time.
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