Oregon is first state to offer private sector workers retirement savings plans
- Oregon will become the first state to offer retirement plans to private sector workers whose employers don’t sponsor them, reports Governing. The state is making these plans available to both full- and part-time employees starting in July.
- Of the nation’s 57 million private sector workers, half don’t have employer-sponsored retirement plans, and only a small percentage of them have enough retirement savings, says Governing.
- Six states — Connecticut, Maryland, California, New Jersey, Illinois and Washington — are planning to implement similar programs over the next five years. Oregon's plan alone will cover nearly 1 million workers.
Per the report, the seven states listed will cover a combined three-quarters of private sector workers without employer-sponsored plans. These workers not only lacked the chance to save for retirement but also missed out on the tax advantage retirement plans provide.
Any program that gets more workers saving for retirement can help them avoid living out their post-work years in poverty. Studies show that workers with employer-sponsored retirement plans might not be saving enough for retirement. Millennials reportedly are more apt to save for retirement than the previous generations.
HR can make sure employees understand how their plans work by giving them access to financial information. Some observers have even advocated automatic enrollment into a company savings plan.