Several states have recently been given the go-ahead to start setting up state-based retirement plans.
Connecticut at the end of April got the OK — after a five-year debate — to offer a state-run retirement program for private-sector workers after the state’s House passed the “Retirement for All” bill. The state’s Senate still needs to approve the legislation.
Maryland passed the state’s auto-IRA bill by a veto-proof majority on April 12, establishing the Maryland Small Business Retirement Savings Program.
Oregon’s plan is in “startup mode” thanks to a recently passed bill in the state authorizing the establishment of the plan, Lisa Massena, executive director of the Oregon Retirement Savings Plan, said on a Wednesday call held by the Georgetown University Center for Retirement Initiatives.
She noted that California and Connecticut have “similar” offerings coming up to Oregon’s, adding that 20 states are “actively working” on state-run retirement programs that support retirement in the workplace. Washington launched a small plan marketplace last year, which has been picked up by New Jersey.
Massena noted that more than 1 million workers in Oregon do not have access to a savings plan at work, with 630,000 working for an employer that does not offer a plan, another 220,000 working for an employer that offers a plan but not to them, and another 200,000 being self-employed.
Oregon’s plan, she said, “will include best practices” like auto-enrollment, auto-escalation and “freedom of choice — there will be an investment menu and a standard investment choice outside of the default” investment option.
She added that investments will be pooled and privately managed in the private sector. “In Oregon that was deemed to be an important feature from a trust standpoint.”
Messena says Oregon anticipates a “phased launch” of the plan starting in July 2017.