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OregonSaves Rollout Slow but Accelerating, Says Report

Government Affairs

The lag between registration in OregonSaves and submission of payroll deductions was longer than originally anticipated, but the rollout is accelerating, says a new study. OregonSaves is the state-run retirement plan for employees whose employers do not offer a retirement plan.

In “Auto-IRA Gradually Speeding Up,” a study by the Center for Retirement Research at Boston College, Anek Belbase, Laura D. Quinby and Geoffrey T. Sanzenbacher note that six states— California, Connecticut, Illinois, Maryland, New Jersey and Oregon—have enacted auto-IRA programs that require employers without a retirement plan to automatically enroll employees in the program. Their study concerns Oregon’s program, the first one to become operative and the one for which there therefore is the most data.  

Belbase, Quinby and Sanzenbacher report that most employers participating in OregonSaves: 

  • are in the services and restaurant industries;
  • have 10-49 employees; and
  • are in non-urban areas.

They also note that 59% of employers register for OregonSaves in the last month before the deadline by which they must or later. And they add that employers that miss that deadline also may be likely to take longer to complete rolling out the program. 

The study notes that the legislation that created OregonSaves set a timeline of 90 days between registration in the program and submission of the first payroll deductions; however, an additional 30 days was allowed before such submissions would be considered to be late. 

In the first three months of 2018, approximately 77% of employers took longer than those 120 days, say Belbase, Quinby and Sanzenbacher. They also say that employers in the farming sector are “significantly slower” to submit the first payroll deductions and that employers with 20 employees or fewer are “especially likely” to do so. 

But there is good news. The report says that in the last three months of the period studied, February-April 2019, a majority of employers still were failing to meet the 120-day period, but the percentage stood at 60%, a 17-percentage point improvement. 

“Perhaps the most important finding is that, even controlling for the characteristics of employers that are registering, the rollout process is getting faster over time,” Belbase, Quinby and Sanzenbacher write. And the improvement appears to be accelerating: they say that the number of employers that miss the 120-day deadline is falling by 2 percentage points each month.

Belbase, Quinby and Sanzenbacher write that the improvement could be attributable to a number of factors, including: 

  • OregonSaves strengthened its call centers’ support capability;  
  • OregonSaves redesigned user interfaces and communication material to make the overall process more employer-friendly; and  
  • characteristics of employers.  

Accelerating Rollout

Belbase, Quinby and Sanzenbacher suggest increasing field visits to employers may help in increasing the speed of program rollout, especially employers: (1) in the farming sector, (2) with a small number of employees and (3) that registered close to their deadline for doing so.