In Oregon, the Rose City Rollers women’s roller derby league of Portland now has a retirement plan. So does Reach Peak Brewing in Astoria, and the Amani Center, which helps victims of child abuse and neglect in Columbia County.
A little more than a year ago, none had a retirement plan in place. But Oregon, like a number of other states, passed a law to create a state-sponsored (but privately operated) program to help workers not covered by corporate plans to save for retirement through payroll deductions.
After the first year, the results are promising. A study by Boston College’s Center for Retirement Research found that, of those eligible for the OregonSaves program, only about 1 in 3 chose not to participate. And of those who are saving, 8 in 10 stuck with contributing 5 percent of their salary. When the program reached the one-year mark in July, workers had put about $4.5 million into the plan.
Ten states and one city (Seattle) have put similar “work-and-save” programs in place, according to the Georgetown University Center for Retirement Initiatives.
Nationwide, about 55 million workers have no access to an employer-sponsored retirement plan. Many states “see this as a bullet train coming their way that they can’t avoid,” says Sarah Mysiewicz Gill, senior legislative representative for state government affairs with AARP. Older Americans without retirement assets often rely heavily on government assistance programs such as Medicaid, putting a cost burden on states.
Interest in work-and-save programs has grown rapidly. Since 2012, about 40 states have implemented such programs or are considering legislation, according to the Georgetown center. Gill said work-and-save legislation could be filed next year in Virginia, New Mexico, Wyoming and possibly several other states. Meanwhile, “six or seven” states, including New York, where legislation has been passed, are building the infrastructure needed to put the programs in place. “After only a year, OregonSaves is already making a difference for workers and businesses — and, ultimately, it will help reduce retirement poverty,” Oregon Treasurer Tobias Read said.