Oregon one step closer to state-sponsored retirement plans
SALEM Oregon will join California and Illinois to set up state-sponsored plans allowing workers without access to them now to save for retirement.
The Senate gave final clearance to the legislation Tuesday on a 17-13 vote, with Democrat Betsy Johnson of Scappoose joining all 12 Republicans in opposition. House Bill 2960 was approved by the House last week, also largely along party lines.
State Treasurer Ted Wheeler has been an advocate of the concept for more than two years and led the task force that came up with the recommendations in HB 2960.
By providing a voluntary, portable, and secure way for Oregonians to consistently save some of the money they earn, we will provide security for families, communities, and the states bottom line, Wheeler said in a statement after the vote.
The bill goes to Gov. Kate Brown. It would create a board within the Oregon State Treasury to develop a plan similar to an individual retirement account, to which participating workers would contribute via payroll deduction. The plan would be modeled after the 529 Oregon College Savings Plan that is run under contract.
While businesses would be required to make a state-sponsored savings plan available to workers by mid-2017, HB 2960 would not compel them to contribute to a plan, and workers could opt out of participating.
The issue resulted in a classic split between business groups opposed to the bill and labor unions in support of it.
During the hour-long debate, nearly all of the Senates 12 Republicans spoke against the bill, but Democrats sidetracked Republican attempts to force the bill back to committee with amendments.
Some Republicans attempted to link the proposal with the problems facing the Public Employees Retirement System, which has a projected long-term gap between payouts to retirees and income available from investment earnings and government contributions.
Before creating a new, unworkable state-run retirement system for private sector employees that adds more costs to small businesses, we must fix Oregon's broken PERS system, said Sen. Tim Knopp, R-Bend.
But Sen. Lee Beyer, D-Springfield, said one issue has nothing to do with the other.
Beyer said there is a looming gap between what people are saving if they are saving and what they will need to live on after retirement, even counting Social Security.
This is a chance, looking ahead, to make sure that some young group of people and a future Legislature do not have to deal with this problem, said Beyer, the bills Senate floor manager.
Senate Majority Leader Diane Rosenbaum, D-Portland, said the bill would benefit low-wage workers, particularly women and minorities who are able to save little now and are often forced to work longer or live in poverty as they age.
Sen. Jackie Winters of Salem was among the Republicans who called for broader legislative action to improve Oregons economy instead of requiring more of businesses.
Lawmakers last week approved a statewide requirement for paid sick leave by businesses with 10 or more workers.
But Beyer said that Oregons unemployment rate, which in May was 5.3 percent, is close to its lowest point since it reached 4.7 percent in January and February 1995.
When you are moving ahead, it is time to start moving ahead on some of these issues, he said.
(503) 385-4899 or 363-0888