Oregon Legislature approves blueprint to create a retirement savings plan and make it available to working Oregonians in 2017
The Oregon Senate passed legislation Tuesday that will ensure every Oregonian has access to a safe, easy and effective way to save for retirement. The bill cleared the Oregon House last week and will next go to the desk of Governor Kate Brown for her signature.
The facts are clear: too many of Oregon’s seniors are retiring into poverty, and we know that giving people access to a retirement savings plan works. House Bill 2960 gives Oregonians the opportunity to take control of their own retirement now and in the future, said Representative Tobias Read.
HB 2960 creates the Oregon Retirement Savings Fund Board and directs the board to create a retirement savings plan accessible to all Oregonians. The board will be chaired by the State Treasurer and will include representation from legislators, investors, employers, workers and retirees.
Currently, nearly half of all Oregonians do not have a retirement plan at work. As a result, many are at risk of living in poverty when they retire – unable to cover basic living and medical expenses. House Bill 2960 provides a blueprint for creating a retirement savings plan that will help Oregonians make ends meet when they retire, said Senator Lee Beyer.
The Board is required to create a retirement savings plan that is:
- Voluntary, portable, flexible and easy to access: Workers will be allowed to choose to participate or opt out. The plan will stay with workers from job to job, with funds deposited into an individual retirement account and not tied to a single employer. Employees will be able to contribute to the plan through payroll deduction.
- Pooled and professionally managed: A well-managed plan will improve the health of investments, reduce fees and protect the interests of Oregon families.
- Secure and protected investments: By establishing a fund to be held in the public trust, the money Oregonians invest will be shielded from being used to fund other services.
- Available for Oregonians to begin participating in by July 1, 2017.
Like many hardworking Oregonians, I don’t have a retirement plan or the money to pay a financial advisor. I’m not looking for anything fancy — I just need a straightforward way to save the money I earn. A state-sponsored retirement plan would go a long way to helping me feel secure in planning the future, said Crystal Yeisley, a home care provider in Salem.
A state-sponsored plan will make it easy for small business owners to offer retirement plans to their employees – they will only need to add a line item to the monthly pay stub.
Far from being a burden on small businesses, the Retirement Security Bill provides an attractive option to small business owners who would like to offer their employees a retirement plan, but cannot because of cost and administrative hassle, said State Treasurer Ted Wheeler.
Researchers from the Northwest Economic Research Center at the University of Portland estimate that over 400,000 Oregon workers could participate in a new state-sponsored retirement plan. If those new plan enrollees earn returns that are comparable to those received by current retirees, their combined income from these plans would exceed $2 billion dollars per year.
Many Oregonians are working hard every day, but lack a simple way to save the money they earn. A state-sponsored retirement plan benefits all of us – it helps small businesses retain employees by providing a no-cost retirement plan, it saves taxpayers money by reducing demand for public assistance programs, and it strengthens the Oregon economy, said Jerry Cohen, State Director for AARP Oregon.
About Save Today, Secure Tomorrow:
Save Today, Secure Tomorrow is a broad coalition of organizations working to achieve a secure future for all Oregonians. Members include:
AARP Oregon, Family Forward Oregon, Main Street Alliance of Oregon, Urban League of Portland, Elders in Action Commission, Oregon Nurses Association, AAUW of Oregon, AFSCME, Oregon Action, Oregon Education Association, SEIU Local 503, Neighborhood Partnerships, Oregon AFL-CIO, Oregon State Firefighters Council, Community Action, Neighborhood Partnerships of Oregon, United Seniors of Oregon, PCUN, and Causa.
To learn more about how we can put Oregonians back in charge of their financial future, visit www.savetodaysecuretomorrow.org.