The Retirement Savings Task Force in Oregon has recommended to the Oregon legislature that a retirement security program be created to address the lack of plan access or lack of savings for private-sector workers in the state.
The task force recommends that employees be automatically enrolled in the plan with the right to opt out. Employees should be notified of their right to enroll and provided financial education upon employment, the committee’s report said. However, the plan would also be available to the unemployed. The plan would include automatic escalation of deferral amounts, with a right to opt out.
No employer contributions would be required. Funds would be pooled and professionally managed. The task force recommended that the legislature appropriate funds for a request for information (RFI) or request for proposals (RFP) to receive input for a market analysis and program refinement, as well as program delivery.
According to the recommendation report, a 2011 study by the Oregon State Treasury found 45% of employed Oregonians do not have access to an employer-sponsored retirement plan. More than half of Oregonians who have saved something for retirement have saved less than $25,000, and more than one-quarter have saved less than $1,000 for retirement.
“While retirement security has historically been seen as a matter of shared, as well as personal, responsibility, it is rapidly becoming a broad concern for policymakers. Widespread failure to save adequately for retirement will likely lead to increased burdens on costly social services,” the report says.
Oregon is one of more than a dozen states that have taken action to address the lack of retirement savings for private-sector workers. Last week, Illinois Governor Pat Quinn signed legislation establishing the Illinois Secure Choice Savings Program, which most employers in the state will be required to offer employees.