Five months before Oregon is set to launch a first-of-its-kind state-sponsored retirement plan, congressional Republicans are hoping to kill it off.
U.S. Reps. Tim Walberg of Michigan and Francis Rooney of Florida claim the state plans will “force” people to participate and pose a bureaucratic burden for employers. They introduced a House bill Wednesday that would roll back earlier rulings from the U.S. Labor Department that cleared a path for publicly sponsored savings plans.
“Our nation faces difficult retirement challenges, but more government isn’t the solution,” Wahlberg said. “A better way is to reduce costly red tape and make it easier for small businesses to band together to offer retirement plans for their employees.”
But self-directed retirement plans have failed to prevent a looming crisis as millions of aging baby boomers have failed to accumulate significant savings. State-sponsored plans would offer a 401(k)-like option to the 55 million Americans who don’t have access to a retirement plan through work.
Tobias Read
“It’s frustrating to me,” said Oregon Treasurer Tobias Read. “We’re leading the way as a state. We’ve got a tidal wave coming at us. I just don’t understand why Republicans would want to make it harder for people to accumulate a retirement nest egg.”
An advocacy group for retirees is mobilizing to save the state-sponsored plans. AARP spokeswoman Joyce DeMonnin said too many Americans are entering retirement with little more than their Social Security benefits, where the average payment is about $1,200 a month.
State officials hoped to launch the OregonSaves pilot project in June. An estimated 1 million Oregonians don’t have access to retirement plans.
Contrary to Walberg’s claims, there’s nothing compulsory about Oregon’s plan. But it does require individuals to opt-out if they don’t want to participate. Absent that proactive step, OregonSaves would open an account in their name and have their employer automatically deduct 5 percent of their pay to contribute into the plan.
The investment industry has been fighting such public retirement plans. California Treasurer John Chiang, who is implementing a similar system in his state, said the whole concept is now “under siege.”
“It is shameful that congressional Republicans are bowing to Wall Street interests so they can make a buck on the backs of Main Street workers who are trying to do their best to save for retirement,” Chiang said in a written statement.
Read said OregonSaves will go forward regardless of whether the Republican bill becomes law. But absent the labor department rulings, it will be more complicated and cumbersome to do so.
— Jeff Manning
503-294-7606, jmanning@oregonian.com
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