OregonSaves will be open to those with no saving option at work; larger employers to start getting notices next week
SALEM – To help address the looming crisis of inadequate retirement savings, Oregon this month launched the test phase of OregonSaves, an innovative program that will allow hundreds of thousands of people to start saving at work.
OregonSaves will be available statewide in phases starting in 2018, and will be open to workers with no saving option at their place of employment. Market research shows that roughly 1 million Oregon workers – representing more than half the workforce – have no work-based plan today.
OregonSaves is the nation’s first state-based retirement program that gives private sector workers a chance to save their own money toward retirement automatically, through payroll deductions. To ensure the program works well for everybody, Oregon small and large businesses are helping to shape the program, which was passed into law by the 2015 Legislature.
“More saving will be good for every Oregonian,” said Treasurer Tobias Read, the chair of the Oregon Retirement Savings Board. “OregonSaves gives an added benefit to Oregon workers, helps employers to be more competitive and retain workers, and it will improve the overall economic health of our state in the long run.”
Many employers offer a retirement savings option, like a 401(k) plan. Yet tens of thousands of businesses do not, particularly small employers, for a variety of reasons. OregonSaves will allow employees of those businesses to save part of their own paychecks, with no fees or fiduciary risk for employers.
Businesses with 100 employees or more will start receiving notices this week informing them about OregonSaves, and what it means to them. Only employers that do not offer a plan will facilitate OregonSaves.
The Treasurer sent a letter this week to large businesses, urging them to watch their inboxes.
Under the law, businesses that don’t offer a retirement option will automatically enroll employees in OregonSaves. Participation is voluntary and workers can opt out at any time.
The goals of program are to help businesses thrive, help workers build retirement security and help taxpayers save millions. That’s because more saving and retirement wealth will reduce the demand for government safety net programs. Research shows that people are 15 times more likely to save when there is an option available at work.
Participating workers automatically make contributions through payroll deductions, and it’s portable, allowing them to take their retirement savings with them from job to job.
In the pilot phase that began this month, the State Treasury started small to ensure the program is simple and works well for everybody: There are 11 employers in the initial test phase, and a second pilot group will begin in October.
The participating businesses say OregonSaves is easy to facilitate while helping workers. Casey Miller, executive director at the nonprofit Amani Center in St. Helens, said: “I don’t know why everybody isn’t doing this.”
Other businesses in the test launch include a magazine publisher in Bend, a chocolatier in Portland, a lumber company in Springfield and a sheet metal firm near Medford.
Business input has played an important role in the development of OregonSaves, including statewide forums and rulemaking hearings. In addition, Treasury has visited businesses and associations statewide to help spread the word about the importance of retirement saving and how OregonSaves can help businesses and workers. Research shows that employees perform better when they are more financially stable.
“Oregon small businesses care about their workers and, for many of them, OregonSaves will make a positive difference,” said Colene Martin, President and CEO of the Grants Pass and Josephine County Chamber of Commerce. “The Grants Pass and Josephine County Chamber of Commerce welcomes OregonSaves.”
An important point of clarification: OregonSaves is not PERS, and it has nothing to do with PERS.
The Oregon State Treasury protects public assets, saves money, and helps Oregonians to invest in themselves and their families through empowerment programs like the Oregon 529 Savings Network and OregonSaves. Treasury oversees public investment, banking, and debt management services. 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.
Employers can expect to receive notice from the state prior to OregonSaves registration deadlines. Deadlines to register – if employers do not offer a work-based retirement plan — are:
o 100 or more employees: November 15, 2017
o 50 to 99 employees: May 15, 2018
o 20 to 49 employees: December 15, 2018
o 10 to 19 employees: May 15, 2019
o 5 to 9 employees: November 15, 2019
o 4 or fewer employees: May 15, 2020