There is an effort in Congress to make it harder for Oregonians to save for retirement. The Main Street Alliance and AARP Oregon oppose H.J. Resolution 66 and 67, which repeal Department of Labor guidelines providing flexibility to states and municipalities to address the nation's retirement security crisis.
The Oregon Legislature created OregonSaves to help Oregon workers who don't have access to retirement's savings at work. The Department of Labor rules provided safe harbor for this opportunity to go forward. There is a real need and opportunity to innovate in Oregon:
* More than 1 million Oregonians lack access to a retirement savings option through their workplace
* One out of six Oregonians aged 45-65 has less than $5,000 in retirement savings
* The average monthly Social Security benefit in Oregon is about $1,250, which isn't enough for Oregonians to depend on in retirement for basic needs like heat, food and medications
* Employees will decide if, and how much, they want to put away
* Contributions made by employees will be held in trust for the exclusive use of the employee
"OregonSaves creates easy retirement savings options without mandatory contributions. We think it's important to help Oregonians create a solid financial future for themselves and their families," said Jerry Cohen, AARP State Director. "Moreover, these programs have no cost for employers and take limited amount of time to facilitate. Small business owners would only be responsible for running payroll deduction, which they already do for taxes and healthcare."
A Salem, Oregon Main Street Alliance member agrees. "My reasons for supporting OregonSaves are easy," said Troy Munsell, co-owner of Santiam Bikes in Salem. "I value my employees, and I believe they deserve the opportunity to save for their futures."
On behalf of over 3,500 small businesses across of Oregon, Main Street Alliance of Oregon urges Congress to reject H.J. Resolution 66 and 67," said Khanh Le, Oregon State Director. "The Main Street Alliance of Oregon has worked with state policymakers on this innovative solution to the retirement savings crisis. Efforts to pass state-based IRAs like OregonSaves are bipartisan, with support from varying communities and interest groups. We are dismayed that Congress is considering resolutions that would impede implementation of these plans."
The Department of Labor rule made it clear that programs facilitated by a state must remove the operational burden of running a retirement plan from small business owners. This is crucial.
* The safe harbor is about protecting businesses, especially small businesses. Private sector workers who participate are protected by law in OregonSaves and other state based plans! The safe harbor explicitly clarifies that businesses do not have fiduciary liability under ERISA. It confirms that these are state- or city-administered plans and not employer-directed plans! Businesses don't control these plans, like they do a workplace 401(k).
* The safe harbor is pro-small business, pro-worker, pro-saving, and pro-common sense.
Oregon has always been a pioneer on development smart public policy. We hope Congress will do the right thing by rejecting H.J. Resolution 66 and 67, which could be voted on as soon as Monday.
OregonSaves will start as a pilot program in July of 2017 and continue to expand over the next several years.