Legislation that would create a state-sponsored retirement savings program is heading to Gov. Kate Brown for final approval.
House Bill 2960 requires businesses that don't offer a retirement plan to automatically enroll employees in the state program and deduct a portion of their wages for it.
Employers would not be required to contribute, and employees could opt out.
If the Governor signs the bill, Oregon will become the third state to pass such legislation, following California and Illinois.
The bill passed the Senate Tuesday 17-13 on party lines.
It was hotly debated in both chambers.
"Far too many Oregonians are not saving enough to ensure a decent retirement," said Sen. Lee Beyer, D-Springfield, one of the bill's sponsors. "We know that offering a retirement plan through the workplace really works."
Sen. Chuck Thomsen, R-Hood River, argued that enrolling its many transient employees in the plan would be too much work for agricultural employers.
"This is another example of this supermajority not listening to ag interests in this session," Thompson said.
Sen. Jeff Kruse, R-Roseburg, said he suspected a "conspiracy," where the real purpose of the plan was to later bail out the Public Employee Retirement System.
That would be impossible, Beyer said.
The state would manage the plan through a newly created Oregon Retirement Savings Board, chaired by the state treasurer. The funds would be invested by a third-party firm and would not go through the state treasury.
Other Republicans said it was more important to create jobs so more people could afford to save, and to reform PERS.
The bill was developed by a task force led by State Treasurer Ted Wheeler.
Both in Oregon and across the country, social service agencies are seeing a huge strain caring for older adults who did not save for retirement, Wheeler said in an interview after the vote.
"This is a huge win for those who worry about how to save for their retirement years," Wheeler said. "By providing a voluntary, portable, and secure way for Oregonians to consistently save some of the money they earn, we will provide security for families, communities, and the state's bottom line."