A failure of many Oregonians to save enough for retirement could pose a financial threat to the state, Treasurer Ted Wheeler warned today in testimony to Oregon lawmakers.
Calling the lack of savings a "generational crisis that threatens to plunge seniors into poverty, disrupt entire families and impact our overall economy," Wheeler said more than half of Oregon adults have less than $25,000 set aside for their retirement and one quarter have $1,000 or less in reserve.
One reason people don't save more, Wheeler said, is the shrinking number of employer-sponsored retirement plans and easy payroll access to a retirement saving vehicle.
Wheeler's comments came in the form of recommendations from the Retirement Security Task Force, which he has chaired for the last eight months. One of the biggest recommendations was for the state to step in and provide a retirement savings plan that anyone could use.
In a press statement, Wheeler included a quote from Jose Gonzalez, who runs a Salem real estate agency: “As a small business owner I want to do the right thing and offer my employees strong retirement savings options. The Task Force recommendations released today give me hope that Oregon can come up with a way to make it easy for my employees to save without burdening small business owners with additional administrative hassle.”
AARP Oregon also expressed support "for putting a critical lens on the retirement crisis in our state."
Wheeler said all but one of the task force members approved the idea of state involvement in retirement savings. The Treasurer indicated a bill will be submitted to the 2015 legislative session that addresses retirement security, including offering retirement savings accounts.
Just offering a retirement savings vehicle may not be enough. Women and minorities, who are under-represented in savings plans, in part because of lower average wages, might require incentives to tuck away some of their limited discretionary income. Small businesses also may need encouragement to explain the savings option to their employees.
“While retirement security has historically been seen as a matter of personal responsibility, it is rapidly becoming a broad concern for policymakers,” Wheeler said. “Widespread failure to save adequately for retirement will likely lead to increased burdens on costly social services.”