The Oregonian
More than 400,000 workers would save an estimated $2 billion a year under a state-sponsored retirement plan like the one lawmakers have proposed, according a report released Wednesday.
The study, conducted by Portland State University researchers and the left-leaning coalition Our Oregon, suggests that a public retirement program could have the broadest impact on low-income workers, helping them to save at least some money to supplement Social Security benefits.
The study found that more than half of private-sector workers have no money saved in a personal retirement plan, largely because their employers don't offer one. That is especially true among part-time workers, 62 percent of whom don't have access to a plan.
Researchers estimate that 107,000 Oregonians in the bottom 25 percent of income-earners would participate in a state-sponsored savings plan. That would be a 400 percent increase over the number in this group now participating in a plan. Collectively, they'd save $228 million a year.
"If a state-sponsored program was available, and all workers knew about its availability, we think that alone would increase participation rates," said Tom Potiowsky, a PSU economist and lead author of the study. "It's almost a financial literacy question."
He added: "It does not change the challenge that low-income people have, it just provides them greater access."
Treasurer Ted Wheeler helped craft the outlines of a public retirement plan, telling a legislative committee in September that the state faces a "generational crisis."
Lawmakers are now considering legislation to create a public retirement savings program housed in the treasurer's office. House Bill 2960 and Senate Bill 615 would create a seven-member retirement task force to create the program, which would resemble an employer-sponsored 401(k) or individual retirement account.
The PSU report underscores racial disparities in retirement savings. About half as many Hispanic workers -- 23 percent -- are enrolled in retirement programs compared to white and African-American workers.
The findings of the PSU report closely resemble those of a 2011 study by the Oregon State Treasury, which found that more than 40 percent of Oregonians work for companies that don't offer retirement savings plans.
"The law could help prevent a retirement savings crisis in Oregon," Senate Majority Leader Diane Rosenbaum, D-Portland, told the Senate Business and Transportation Committee on March 9.