Posted by & filed under Business Credit Journal, Oregon.

Jan 8, 2018

News for 2018: Pioneering OregonSaves retirement program opening for statewide enrollment, based on successful pilot phase

From: OREGON STATE TREASURY  Tobias Read, State Treasurer

Auto-IRA program meets a glaring need by providing a savings option for those who don’t have a qualified plan at work 

SALEM – OregonSaves, the nation’s first state-based retirement savings option for private sector workers, is now open for business statewide.

The landmark program meets a critical unfilled need and is available for workers whose employers do not offer a qualified retirement savings plan. Roughly half the workforce, or an estimated 1 million Oregonians, lack access to a work-based savings option, according to market research.

The program is being opened for accelerated enrollment because of the success of a pilot phase that began in July.

“The statewide rollout of OregonSaves is positive news for every Oregonian,” said State Treasurer Tobias Read, the chair of the Oregon Retirement Savings Board. “Workers and the overall economy will benefit from more personal saving, and employers will benefit by being able to facilitate an easy program that helps attract and retain quality employees.”

The Board had initially planned to invite eligible employers to facilitate OregonSaves gradually over the next two years, starting with the state’s largest employers. A series of deadlines to register remain unchanged, but employers don’t need to wait for them.

“I don’t know why everybody isn’t doing this,” said Cassy Miller, executive director of the nonprofit Amani Center in St. Helens, which was one of the first participants in OregonSaves.

The program is a simple payroll deduction for employers and makes a positive difference for workers, Miller said. “We care about our employees. It’s challenging for a small nonprofit to offer competitive wages and benefits.”

OregonSaves, approved by the 2015 Legislature, is a public-private partnership based on investment best practices, and designed with feedback from Oregon businesses and the public. Under the law, if employers don’t offer a plan, they need to offer access to OregonSaves to employees.

Because it is a state-based program, employers who facilitate payroll deductions via OregonSaves have no fees or fiduciary risk.

The pilot phase, which earned positive reviews from employers and savers alike, showed that the system interface is simple and efficient. Since the start of the pilot phase, about 2,000 participating workers have jointly saved more than $308,000.

With the wider availability, thousands of workers can make a New Year’s Resolution to start saving in 2018, the Treasurer said.

People are 15 times more likely to save if an option is available through payroll deductions, according to studies.

Based on investment best practices, workers are enrolled automatically and then have the ability to opt out. About seven of every ten workers have elected to remain in OregonSaves, which is in line with projections.

Accounts are the property of savers and are portable from job to job, and the money is invested in low-cost mutual funds offered by State Street Global Advisors. OregonSaves is not part of the Public Employees Retirement System, and has nothing to do with PERS.

“The OregonSaves program is really handy for employees who don’t have access to a 401(k),” said Steph Whiteside, who works at Nature’s Pet Store in Salem. “It’s really helped me to establish a way to save funds for my future and it was so easy to do.”

OregonSaves has been recognized nationally by retirement advocates and research experts such as the Pew Charitable Trusts and Morningstar Inc., as an important advancement that will help dent the crisis of inadequate personal savings. In addition, more saving will help to reduce the long-term need for expensive government safety net programs.

Oregon could save $98 million in public costs over 15 years if people saved enough to increase their retirement income by $1,000 a year, according to an analysis by the AARP.

Today, the average savings for families nearing retirement age is just $12,000, and many people haven’t even saved a dime.

Oregon is a small business state and workers at small businesses are far less likely to have a work-based savings option. While employers can register now, the deadlines are:

  • 100 or more employees – November 15, 2017
  • 50 to 99 employees – May 15, 2018
  • 20 to 49 employees – Dec. 15, 2018
  • 10 to 19 employees – May 15, 2019
  • 5 to 9 employees – Nov. 15, 2019
  • 4 or fewer employees – May 15, 2020

To sign up, employers need a registry number, which they can obtain by calling OregonSaves. Numbers also will be sent via email and mail in January.

To learn more about OregonSaves, view a 2-minute video online or visit www.OregonSaves.com.

The Oregon State Treasury protects public assets, saves money, and helps Oregonians to invest in themselves and their families through empowerment programs. Treasury oversees public investment, banking; debt management services; and the Oregon Savings Network, which manages OregonSaves, Oregon ABLE, and 529 college savings options. State investment policies are set by the Oregon Investment Council. Treasury also promotes public outreach and education to help Oregonians learn strategies to save money and make smart financial choices.

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