The program will allow access to a retirement savings account.
BY JACOB PALMER | DIGITAL NEWS EDITOR
The Oregon Senate passed a bill that would create a program that gives everyone access to a retirement savings account run by the state.
“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,” Senator Lee Beyer, (D-Springfield), a chief sponsor of the bill, said in a news release. “House Bill 2960 provides a blueprint for creating a retirement savings plan that will help Oregonians make ends meet when they retire.”
House Bill 2960 requires businesses that don’t offer a retirement plan to automatically enroll employees in the state program and deduct a portion of their wages for it. Employers would not be required to contribute, and employees could opt out.
If the Governor signs the bill, Oregon will become the third state to pass such legislation, following California and Illinois.
(SOURCE: Statesman Journal)
The bill passed on a 17-13 vote that fell on party lines.
“For those who can’t afford to put aside much money each month – or who work in an industry without a retirement savings plan – HB 2960 will provide a baseline option for the hundreds of thousands of Oregonians who face alarmingly low retirement savings,” Senate Majority Leader Diane Rosenbaum (D-Portland) said in the same release. “With HB 2960, a low-income worker saving responsibly over the course of a career can put together a nest egg that will make a difference in old age.”
The bill creates a seven-member Oregon Retirement Savings Board and tasks it with creating a state-managed retirement savings plan that would:
- Feature an automatic payroll deduction employees can change or cancel whenever they choose.
- Give employees the chance to automatically increase the size of this deduction year after year.
- Be portable so employees could take it with them as they move from job to job.
Beyer said the plan would resemble the Oregon College Savings Plan because it would pool individual contributions into a large, privately managed investment fund. Private-sector employers would be required to offer this plan to their employees if they did not already offer a retirement savings plan of their own.
(SOURCE: Bend Bulletin)
State treasurer Ted Wheeler was a proponent of the bill.
“The bottom line is we’re making it easier for those who can save to voluntarily do so,” State Treasurer Ted Wheeler said in a phone interview. “If we fail in that charge, the cost to taxpayers could be staggering as more and more people rely on costly social programs.”
A 2011 study commissioned by Wheeler’s office found more than half of all workers in Oregon have less than $25,000 saved for retirement, and more than a quarter have less than $1,000 saved. The same study found more than 40 percent of employees work for companies that don’t offer retirement plans.
(SOURCE: OregonLive.com)
Republicans worried that the bill would create more costs for businesses and could conflict with federal regulations.
Some Republicans attempted to link the proposal with the problems facing the Public Employees Retirement System, which has a projected long-term gap between payouts to retirees and income available from investment earnings and government contributions.
“Before creating a new, unworkable state-run retirement system for private sector employees that adds more costs to small businesses, we must fix Oregon’s broken PERS system,” said Sen. Tim Knopp, R-Bend.
(SOURCE: Portland Tribune)
The bill now heads to Gov. Kate Brown, who is expected to sign it into law.
