Oregons Retirement Savings Task Force is calling on the state to create a retirement fund that would be available to all employed state residents that will follow Oregonians as they transition between jobs.
According to the National Retirement Risk Index, an estimated 53% of households are at risk of being unable to maintain their pre-retirement standard of living in retirement.
In Oregon, 74% of full-time and 37% of part-time private sector workers have access to a retirement plan, the report says. Further, only 49% of all private-sector employees are currently participating in an employer-sponsored plan.
Access, participation and take-up rates all increase as both income and employer size increases. And in the Pacific Region, access, participation and take-up rates are all lower than the national rates and the lowest of all the regions.
Key characteristics of the statewide plan include:
- Availability to anyone employed in the state, including both full- and part-time employees, no matter the size of the company they work for.
- Deposits into the fund would be automatically deducted from paychecks, but employees could opt out of participating.
- There will be no required employer contribution, but employers will be responsible for providing enrollment paperwork.
- Each employee would have an individual account (akin to a 401(k) or Roth IRA account) with regular statements that would be portable and follow them between jobs and employers.
- The accounts would belong in one pooled fund, invested by private fund managers but overseen by a state-appointed board.
According to the report, a fund like this would solve some of the problems that prevent people from saving for retirement, noting that many small businesses dont provide retirement plans, and many companies dont provide them for part-time workers. Additionally, much of the burden is put on individuals to understand how to invest their money.
The finalized report will be published Sept. 15.
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