This post is the eighth in our series focusing on individual state-run retirement programs and it looks at Oregon, the Beaver State. If you missed them, catch up on the first seven posts, plus an overview of state-run retirement programs: Connecticut, Maryland, New Jersey, Washington, California, Illinois, and Massachusetts.
Oregon Governor Kate Brown signed the Oregon Retirement Savings Plan into law on June 23, 2015. The Oregon Retirement Savings Board was created and began meeting monthly in November 2015. The plan is set to launch in July 2017.
Oregon is on track to be the first state in the nation to give employers and employees the ability to benefit from a state-based retirement plan, and the Treasury is being deliberate to ensure the plan is simple, convenient and secure. "When more people save for retirement, it will lead to a better quality of life and reduce the heavy burden on taxpayer-financed programs,"
State Treasurer Ted Wheeler, the chairman of the Oregon Retirement Savings Board.
There are approximately one million Oregon employees who are without a retirement plan, which is more than half of the workforce. The Oregon Retirement Savings Plan will create plans for more than 600,000 of them. Employees ages 18 and older who work for employers who do not already provide a retirement plan will be automatically enrolled into the state plan but may opt out. Deductions will be automatically withdrawn from their paychecks at a rate of 5%, with the option to change the participation level.
Employers are not permitted to contribute to their employees’ retirement accounts, but must deduct the appropriate amount and submit it to the plan. Employees retain their retirement accounts regardless of employer, so the account will follow them as they change jobs.
When the plan begins implementation in July 2017, larger employers will be added first, with smaller employers added over the next few years.
The retirement plan will be in the form on a Roth IRA and overseen by the Oregon State Treasury, and accounts will be managed by financial providers.
Photo Credit: Salem Oregon Capitol by Edmund Garman