Proposed Oregon Retirement Savings Plan Makes Sense

Last month, Washington Gov. Jay Inslee signed a statewide retirement marketplace into law. Why are an estimated 20 states taking up this issue at all? Only 11 of every 25 full- and part-time workers participate in a retirement plan on the job, according to new research by scholars at The New School for Social Research in New York. That’s mostly because they lack access to a plan at work. In 1999, 61 percent of U.S. employees age 25 to 64 worked at a job with a retirement plan. By 2011, that proportion had dropped to 53 percent. That’s partly why Illinois and California have approved statewide plans and why Oregon legislators are considering House Bill 2960. It would establish the Oregon Retirement Savings Board under Treasurer Ted Wheeler’s office.

The board won’t run a marketplace. It’ll create a statewide plan, similar to the Oregon College Savings Plan, where a worker can monitor her account and maintain it regardless of where she works within the state. She can also roll it over into another workplace plan or an Individual Retirement Arrangement. The bill doesn’t specify how the plan itself will work. That would be up to the 7-person board, appointed mostly by the governor. But co-sponsor Rep. Tobias Read (D-Beaverton) said he envisions it looking like an IRA, with investment options overseen by a professional manager. The bill also allocates $1 million to get the plan set up by July 1, 2017. The joint Ways and Means committee voted 14-8 to approve the bill on Friday. The House is expected to take it up for a vote this week.

Source/more: Oregon Live