What do you think? Leave a respectful comment.

How Oregon is helping workers save for retirement

The goal of retiring comfortably off the fruits of one’s labor has become an increasingly elusive goal for many Americans. Now states are taking the problem into their own hands. In Oregon, a new state retirement program lets businesses hook payroll into a system that automatically enrolls employees in a savings plan. Amna Nawaz reports as part of our ongoing series Chasing the Dream.

Read the Full Transcript

  • Judy Woodruff:

    For many, a key part of the American dream is to one day retire comfortably and live off the fruits of your labor. But over the past few decades, that goal has become much more elusive.

    Now some states are stepping in.

    The NewsHour's Amna Nawaz recently traveled to Oregon, the first in the nation to launch its own state-run retirement program.

    It's part of our ongoing series Chasing the Dream.

  • Amna Nawaz:

    Running Portland's roller derby league is Kim Stegeman's dream job.

  • Kim Stegeman:

    I love it because it's all about empowering women and girls to play a team sport, to have a sense of community, and really to grow on and off the track.

  • Amna Nawaz:

    Stegeman founded the Rose City Rollers in 2004. It has since become one of the largest roller derby leagues in the country.

    But as her business grew, Stegeman didn't have time or resources to figure out how to select, afford, nor offer a company retirement plan for her seven employees.

  • Kim Stegeman:

    So, I have 600 skaters on any given day of the week. And so, sometimes, the needs of your membership kind of trumps the — trying to figure out the benefit structure.

  • Amna Nawaz:

    So when she heard about a new state retirement program billed as hassle-free, she jumped at the chance.

  • Kim Stegeman:

    I want to be a good boss. I want to lead an organization that is taking care of its employees. So, empowering my staff to plan for their future goes right along with that myself.

  • Amna Nawaz:

    Here's how OregonSaves works.

  • Narrator:

    OregonSaves is a retirement savings options for Oregonians 18 years and older.

  • Amna Nawaz:

    Businesses hook their payrolls into a system that automatically enrolls employees in a savings plan.

    Workers can opt out, but if they don't, a set amount of their choosing is deducted from each paycheck and invested into a Roth IRA, a tax-free retirement account.

    By 2020, every business in Oregon will be required to offer a traditional retirement plan or join OregonSaves.

    State treasurer Tobias Read says the idea is to make saving as easy as possible.

  • Tobias Read:

    There are about a million people in Oregon in a state with four million population who don't have access to way to save for retirement work.

    So we're trying to remove the barriers and make it easier for people to do that and be in control of what their retirement is going to look like.

  • Amna Nawaz:

    And it's not just an issue here in Oregon. Across the country, an estimated 55 million Americans don't have access to a retirement plan through their employer.

  • Angela Antonelli:

    The retirement crisis in the United States today is very real.

  • Amna Nawaz:

    Angela Antonelli heads Georgetown University's retirement center, advising states on retirement policies.

    She points to a recent survey showing almost half of all Americans nearing retirement have less than $25,000 saved. One in four don't even have $1,000 put away. And because people are living longer, they need more money now than ever before.

  • Angela Antonelli:

    Many families today really are concerned that they're going to outlive their retirement savings and they're more afraid of that than they are of death.

  • Amna Nawaz:

    Studies have shown workers are 15 times more likely to save if they have access to an employer-sponsored retirement plan. But about half of small to mid-sized businesses don't offer one.

    States like Oregon are now taking matters into their own hands. So far, 10 states have passed laws to create state retirement programs. Many more have put similar proposals on the table.

  • Tobias Read:

    Anything that individual states can do to help ease that gap is going to be certainly in the interest of individual people, but in the interest of the state too, because when people have assets and they have choices, there's going to be less of a stretch on state budgets that are generally already stretched.

  • Amna Nawaz:

    But some workers aren't convinced state retirement plans work for them.

    Chris Churilla is the bar manager at Renata, an Italian restaurant in Portland. He opted out of OregonSaves. Churilla has spent 17 years in the restaurant industry, and with a family of four, including a newborn daughter, he says, right now, he doesn't have extra money to save.

  • Chris Churilla:

    Expenses are always climbing. And our ability to pay our bills is there, but putting money away for savings and college tuition and things of that nature, it's not where we'd like it to be, for sure.

  • Amna Nawaz:

    But there's another reason Churilla opted out of OregonSaves. He says he doesn't trust the state to handle his money.

  • Chris Churilla:

    Why give someone my money when I'm not entirely sure that I'm going to see any kind of return, or, if something goes awry, am I going to see that money back?

  • Amna Nawaz:

    State officials point out Oregon isn't handling the money. Private financial investment firms are. And savers can choose low- or higher-risk investments.

    And, they say, Churilla is an exception. So far, about 80 percent of employees auto-enrolled in OregonSaves decided to stay in. But Churilla isn't the only one with concerns. The U.S. Chamber of Commerce has also warned against the trend toward state-run retirement programs.

    Aliya Wong is the Chamber's executive director of retirement policy.

  • Aliya Wong:

    We just want to be careful that as we move forward and we're trying to do the right thing, we don't unintentionally do the wrong thing.

  • Amna Nawaz:

    Wong argues state, as opposed to federal, retirement programs can be burdensome for employers, especially for companies that operate in multiple states.

  • Aliya Wong:

    It becomes very complicated, because not only does each state have a — each state have a different program; they have different definitions of who's covered by that program.

  • Amna Nawaz:

    The Chamber is supporting some new initiatives, like Washington state's Marketplace, a Web site where employees can choose a private savings plan, or efforts by businesses to band together to afford their own retirement plan.

    But some say the retirement crisis is so dire, every option should be on the table.

  • Angela Antonelli:

    There's decades of failure to close the access gap to look at, and to say it's time to try something different.

  • Amna Nawaz:

    Stegeman says business is still booming and that she can already see the benefits of OregonSaves for her own future.

  • Kim Stegeman:

    For me, you know, already having put away a few thousand dollars over the last couple of months, I'm like, that's fantastic. Like, I'm happy as a clam.

  • Amna Nawaz:

    More than 53,000 Oregonians have saved nearly $4 million since the program launched. The state says that shows success. But there's still a lot on the line.

    If early adopters like Oregon make it work, more states might follow their lead. But, if Oregon falters, other state retirement solutions could be stopped dead in their tracks.

    For the "PBS NewsHour," I'm Amna Nawaz in Portland, Oregon.

Listen to this Segment

The Latest