EUGENE, Ore. (AP) — An Oregon program designed to help workers whose employers don't offer retirement plans has seen rapid growth in the months leading up to this week's first anniversary.
OregonSaves has enrolled more than 32,000 private-sector employees who previously didn't have access to a retirement savings option at work, The Register-Guard reported. They've so far set aside a combined $4.6 million of their own money through automatic payroll deductions, with an average withholding of 5.1 percent of salary.
The state-run plan doesn't require any financial contribution from employers, but they must sign up their workers for OregonSaves if they don't offer a 401(k) or other retirement plan. Employees can opt out.
"OregonSaves is off to a successful start," state Treasurer Tobias Read said in a statement. "By helping more people save for their retirement, OregonSaves is addressing the retirement savings crisis head-on, and making businesses more competitive."
The retirement plan began on a limited, voluntary basis last summer. Oregon then required big businesses to join at the start of 2018.
The real growth happened in May, when employers with between 50 and 100 workers were brought in. Smaller businesses are much less likely than big companies to offer retirement savings plans.
The May expansion tripled the number of people in the program, while another 14,000 workers are still in the process of being enrolled. About 30 percent of employees have decided to opt out.
The next expansion is for Oregon employers with between 20 and 49 workers, who will have to enroll their workers by Dec. 15. Self-employed Oregonians will be eligible for the program by the end of 2018.
With the stock market sluggish, investment earnings for OregonSaves were poor in the first quarter of 2018, with all funds down about 1 percent in value. Individual workers' money isn't invested until their retirement accounts reach a balance of $1,000, however, and most OregonSaves members haven't reached that threshold.
Workers can track their accounts on a state-run online portal and keep their account when they switch jobs.
The state-sponsored retirement plan was the first of its type in the United States. A few other states have since followed Oregon's lead.
Information from: The Register-Guard, http://www.registerguard.com