OregonSaves, the first state-administered retirement program for private-sector employers in the country, has reached a significant milestone with more than $200 million saved through the program.
Launched in July 2017 in a pilot phase, OregonSaves has been rolling out in waves, and now applies to the smallest employers. Business owners with at least one employee who don’t offer a qualified retirement plan must register for the program by July 31.
The...
OregonSaves, the first state-administered retirement program for private-sector employers in the country, has reached a significant milestone with more than $200 million saved through the program.
Oregon says it is the first state in the country to require all employers to offer a retirement plan.
Dreamstime
Launched in July 2017 in a pilot phase, OregonSaves has been rolling out in waves, and now applies to the smallest employers. Business owners with at least one employee who don’t offer a qualified retirement plan must register for the program by July 31.
The idea of Oregon’s program and similar efforts that dozens of states have enacted or are considering is to encourage higher rates of retirement savings by requiring or incentivizing more employers to offer workplace plans.
“We started with the belief that everyone should have an easy way to save for their retirement at work,” says Oregon Treasurer Tobias Read. “Every Oregonian now has that opportunity.”
Oregon says it is the first state in the country to require all employers to offer a plan, but other states with similar programs are moving in a similar direction. CalSavers, California’s retirement program, is requiring businesses with one to four employees to sign up for the program by Dec. 31, 2025. Illinois is requiring businesses with between five and 15 employees to register for its program by Nov. 1, 2023, but exempts the smallest businesses from the mandate.
The contours of different state plans differ considerably. Oregon, California, and Illinois all have mandates for employers to roll out a retirement-savings plan, either a private-sector plan that meets the state’s eligibility criteria or a state-run option. Employers in those states are required to automatically enroll employees in their own plan or the state’s plan with contributions deducted from their paychecks, and participants could then choose to opt out.
Other states have eschewed mandates in favor of voluntary programs that encourage employers to roll out plans, including by easing restrictions on joining with other employers to offer a pooled plan.
Georgetown University’s Center for Retirement Initiatives (CRI) reports that since 2012, 47 states have adopted a state-administered retirement program, enacted legislation authorizing a program, or are considering one.
The auto-IRA model that Oregon pioneered is the most prevalent, according to the CRI. Of the 19 states that have enacted programs, 15 use some version of an auto-enrollment plan with an employer mandate.
Advocates of those programs argue that a simple payroll deduction is the most effective way to ensure workers are putting money away for retirement. Research from AARP has found that Americans with access to a workplace plan are 15 times more likely to save for retirement than those who have to save on their own.
Oregon says that more than 21,000 businesses have registered with OregonSaves, with nearly 118,000 workers contributing an average of $171 a month. The state reports that around 75% of workers who were automatically enrolled opted to stay in the plan.
With $200 million in savings, Oregon accounts for a substantial portion of the $864 million the CRI says workers have contributed to such programs around the country.
In addition to employees, Oregon has also invited self-employed and gig workers to open an OregonSaves plan. The state says that 2,100 independent workers have opened accounts with the program.
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