The state of Oregon can now easily help the private sector employees to get access to a state-run retirement benefits plan. This plan was earlier facing a key federal hurdle that has cleared now. This plan would be implemented in stages and ensure that all the workers of Oregon who have no access to a plan from their employer could have some retirement savings.
The State-Run Retirement Benefits Plan
The state-run retirement benefits plan of Oregon was narrowly approved by the State lawmakers last year. This plan allows all the workers who do not have employer-sponsored retirement benefits plan to enroll in one run by the state. This plan would work like a 401(k) plan in which the money would be deducted from the salary of a worker on a regular basis and the money would be invested so that the worker can have a regular income post retirement.
The Hurdle
Unfortunately, the state-run plan earlier had a federal hurdle as the federal government had not taken a stand over such plans. But a few days back, the department of labor finalized the rules that would pave the way for the Oregon state-run retirement plan to be operational by next July. The Obama administration now clearly mentions that state-run retirement plans are allowed under federal law. This announcement has paved the way for state-run retirement plans in not only Oregon but seven other states as well.
Implementation
A spokesperson for Oregon Department of Treasury, James Sinks has recently cleared the air on the implementation of this vital state-run plan. He said that the state government is planning to implement it in stages. This plan would be offered to only a handful of private companies present in Oregon that are not offering any such plan. If it’s successful, then the state would ramp up the plan and offer it to more such companies.
The Reason
A major reason that highlights the necessity of a state-run retirement benefits plan in Oregon is that about a million Oregon workers lack access to an employer-based retirement plan and hence they don’t have much savings. They may not have enough money to live comfortably in retirement. It is also a fact that several private sector companies are already offering a retirement plan so they would not be impacted by the change much.
