Oregon small business owner tells Congress that OregonSaves is good for employers and for workers
Salem, OR—A year after it started rolling out statewide, Oregon’s effort to expand retirement savings options has already helped tens of thousands of workers to set aside a combined $12.8 million – and the numbers climb monthly.
Now, OregonSaves – which was the nation’s first operating state-based auto-IRA program – is earning applause in Congress, where it was highlighted today as a potential national model. OregonSaves is easy for employers and workers, through a simple payroll deduction process, and imposes no fees or risk on employers.
Luke Huffstutter, the co-owner of Annastasia Salon in Portland and one of the first small business owners to facilitate OregonSaves, testified before the U.S. House Ways and Means Committee in a hearing focused on “Improving Retirement Security for America’s Workers.” The committee is chaired by U.S. Rep. Richard Neal, D-Mass., and includes U.S. Rep. Earl Blumenauer, D-Ore.
“OregonSaves is easy for my employees, but it’s also easy for me,” Huffstutter told the committee. “OregonSaves has changed the future for the people in my company. Please consider making it easier for other states to follow in Oregon’s steps.”
The average savings through OregonSaves for his participating workers – almost all of them women -- now averages more than $2,200, he said.
OregonSaves was created to provide an employment-based retirement savings option to an estimated 1 million Oregonians who lack the ability to save at work. Research from the AARP shows that people are 15 times more likely to save, and will save more, when they have access to a plan at work.
OregonSaves is overseen by the Oregon Retirement Savings Board and managed by the Oregon State Treasury. State Treasurer Tobias Read, the chair of the Oregon Retirement Savings Board, said OregonSaves is part of the state’s commitment to help build a better quality of life for seniors.
“With OregonSaves, the news just keeps getting better,” Read said. “The reviews are strong, people are putting themselves on a path toward better lives, and we are helping small businesses to be more competitive. I want to thank Chairman Neal and Rep. Blumenauer for their attention to the critical need for more retirement savings, and for recognizing programs like OregonSaves as part of the solution.”
The early success of OregonSaves has already earned acclaim beyond the state. The program received an Excellence and Innovation Award (Link: https://www.pionline.com/article/20181029/PRINT/18...
from Pensions & Investments and the Defined Contribution Institutional Investment Association.
Illinois and California launched their own state-based versions in the past year, and several other states and municipalities are considering similar programs. The reasons are compelling: Americans aren’t saving nearly enough for retirement with the deficit estimated to be at least $6.8 trillion. And if people aren’t saving, it will result in additional pressure on taxpayer-funded safety net programs.
OregonSaves is available for workers who lack a savings option through their employer, and individual Oregonians who want to sign up on their own at http://www.OregonSaves.com.
Workers are automatically signed up, and have the ability to opt out at any time. The program enjoys strong public backing in Oregon, according to a recent poll that found more than 80 percent support.
To ensure it is easy for everybody, OregonSaves is rolling out in phases statewide. The current phase is for employers with between 20 and 49 workers. The program will finish the rollout phase at the end of 2020, and at that time will be available to workers at companies of any size, if those companies do not offer a different retirement savings option.
The combined savings of participants in OregonSaves is now increasing by more than $1 million a month, according to Feb. 1 data.
The Oregon State Treasury improves the financial well-being of all Oregonians. We provide low-cost banking, debt management and investment programs for governments, and empower Oregonians to invest in themselves and their loved ones for a more secure future, through the Oregon College Savings Plan, Oregon ABLE Savings Plan, and OregonSaves.