OREGON STATE TREASURYOREGON STATE TREASURY

Neighborhood Partnerships – Savings & Asset Building SummitNovember 15, 2016

Oregon Retirement Savings PlanA NEW, EASY WAY FOR OREGONIANS TO START SAVING, COMING SOON

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$3,000

$12,000

31 percent

Average savings per household

Average household savings, nearing retirement age

A generational crisis

Non-retirees who report that they have saved nothing, and have no pension

Sources: Federal Reserve, 2013; National Institute on Retirement Savings

Americans are healthierand living longer

Source: CDC/National Center for Health Statistics

Life expectancy in 194062.9 Life expectancy in 201378.8

50

55

60

65

70

75

80

85

But we’re not saving enough for retirement

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The status quo has failed

68 million Americans

As many as 1 million Oregonians

Sources: Geographic Differences andTrends, 2013, Employee Benefit Research Institute; AARP Oregon

Do not have the option to save at work

Equivalent to almost half the workforceSources: Geographic Differences andTrends, 2013, Employee Benefit Research Institute; AARP Oregon

Do not have the option to save at work

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Oregon is a pioneer

• The 2015 Legislature created the Oregon Retirement Savings Plan to improve access and outcomes

• Oregon is on track to be the first to launch a state-based plan

• Beneficial for everyone: workers and families, employers, taxpayers, and communities

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What is it? A simple and convenient way to save

• A state-sponsored plan that shares many key features of 401(k) and other IRA plans but does not compete with them

• Standard options: Roth IRA, target date fund, 5% contribution rate, 1% automatic escalation

Features 401(k) IRA ORSPGoverned by experts

Available at work

Contributions through payroll deduction

Automatic enrollment

Automatic escalation

Professionally managed

Employer matching contribution

Portable from one employer to the next

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Who’s it for?

Don’t have a retirement plan at work?• The Oregon Retirement Savings Plan is for Oregonians 18 years

and older who have reported income and who have no savings option at work.

• Estimates:

600,000 Employer offers no plan

200,000 Employer offers a plan, not included

200,000 Self employed (opt-in)

Source: Boston College Center for Retirement Research, Market Research Report: Oregon Retirement Savings Plan, July 2016

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What employers are included?

Most employers in Oregon affected• The plan will be for the 66% of all employers in Oregon that do

not offer a retirement plan

• It is for businesses owners as well as their employees

• It is not for public sector employers or employers who offer a plan to all of their employees

• Employers have no fiduciary responsibility

• The plan will be phased in by the number of employees businesses have, starting with larger employers, on a “join by” date

Source: Boston College Center for Retirement Research, Market Research Report: Oregon Retirement Savings Plan, July 2016

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How will it work?

Employers automatically deduct a portion of worker pay (unless workers have opted out)

Savings are invested in a low-fee “Roth IRA” account that belongs to the worker, with the goal to grow in value over time.

A private sector plan administrator communicates directly with the worker about options and performance

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3 Workers can take their savings with them wherever they go and now have access to money for retirement

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What do I need to do?

Employers• When notified, certify that you

have a plan or register for the ORSP

• Pass along information about the plan to employees

• Provide employee data to the ORSP

• Collect opt-out decisions• Keep records to show

compliance• Handle payroll deductions• Resolve employer-related

errors

Employees• You do not need to do anything

to enroll and start saving• You can make choices about:

• Saving more or less• Choosing a different type of

investment• Opting out

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Helping all Oregonians

More Oregonians will save. That’s good for all of us.

• A new statewide culture of saving.

• Retirement security is vital for everybody, including families, employers, communities, and taxpayers.

• The cost of inadequate savings is extreme for taxpayers and strains our social services system.

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What’s next

Outreach and Engagement (now through implementation)Improving awareness for employers, workers, and stakeholders

Plan manager selection (late 2016 ) Private sector firm to handle collections and records

Rulemaking (late 2016)Wonky but important!

Pilot launch! (July 2017)Small group of employers join the plan

Phased implementation (Starting 2018)Plan will phase in slowly to ensure roll out success

It’s a public process. We want your input and feedback!Get involved in our discussions. Join our mailing list.

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Thank you.Questions?www.oregon.gov/retire

Lisa Massena, directorOregon Retirement Savings PlanRetirementSavings@ost.state.or.us