Oregon Takes Another Step Toward State-Run Retirement Plan
Legislation just introduced in the Oregon State Senate brings the Beaver State a step closer to establishing a state-run retirement savings program.
The legislation, backed by the Oregon Senate Majority Leader Diane Rosenbaum (D-Portland), would create an Oregon Retirement Savings Board tasked with developing a state-run retirement program for employees of private-sector employers by June 16, 2017. The legislation is based upon recommendations issued in September 2014 by an Oregon Retirement Savings Task Force that was authorized by statute in the prior legislative session.
The legislation envisions that the board, led by the Oregon State Treasurer, will have considerable power and money to shape and implement the program. For instance, the board must “require an employer to offer its employees the opportunity to contribute to the plan through payroll deduction unless the employer offers an alternative retirement plan to its employees that meets requirements prescribed by the board by rule.” That language essentially allows the board to determine which Oregonian employers are subject to the mandate, irrespective of what those employers are currently doing to encourage their employees to save for their retirement.
This legislation has a good chance of becoming law given the current political makeup of the Oregon legislature, as this effort is being spearheaded by Democrats — and they control both chambers. The Democrats had a good showing in Oregon in the 2014 elections, bucking the national trend. In the Oregon House, the Democrats picked up one seat and now hold a 10-seat majority (35-25). In the Oregon Senate, the Democrats now hold a super majority (18-12) after picking up two seats in that body.
The state initiative in Oregon comes on the heels of a successful effort to create a state-run automatic payroll deduction IRA program in Illinois. Under the new law in Illinois, any business with at least 25 employees that has been in operation for at least two years will be required to offer a retirement savings arrangement for their employees nine months after the Illinois Secure Choice Savings Program becomes operational.
Should the Oregon retirement bill become law, both state-run programs are likely to become operational at the same time. The spring of 2017 is shaping up to be a watershed moment in retirement policy.
Andrew Remo is the Congressional Affairs Managers for NAPA and ASPPA.