By Mac McLean
Sheila Miller knew there would be changes when she moved from working for a daily newspaper to Statehood Media, a regional lifestyle media company based in Bend and Portland.
She had to give up a retirement savings plan that automatically took money from her paycheck. Miller, 37, didnât think she would miss this benefit until she realized how much her plan at the newspaper had helped her save.
Then her new employer signed up with OregonSaves, a first-in-the-nation retirement savings program that will start helping workers in the state save this fall.
âItâs a huge weight off my mind to know Iâm once again taking an active role in saving for my retirement,â she said.
According to a recent estimate, 1 million Oregonians donât have access to a retirement savings plan through their employer. Surveys show employees are 15 times more likely to put money away toward their retirement if they are offered a program through work.
âA lot of small businesses just donât have the capacity to offer a retirement option,â said Joyce DeMonnin, AARP Oregon communications director. Cost and complexity are two big obstacles.
AARP worked closely with state officials to create OregonSaves. Six other states, including California, have passed legislation to set up similar programs, and about 30 states are considering savings proposals.
As part of the pilot phase in Oregon, Statehood Media and 10 other small businesses started facilitating the program in July. So far, itâs been well received.
Easing the burden
âItâs been very good,â said Saleem Noorani, owner of the Cork & Bottle Shoppe in Corvallis, one of the 11 businesses. âThey took all the roadblocks away.â
Noorani, a member of the AARP Oregon Executive Council, tells his 11 employees how valuable it is to set aside money for their retirement.
But Noorani said the retirement plans his business considered had an average set-up fee of $1,000 per employee and would require a lot of time to manage.
Kevin Max, Statehood Mediaâs founder, said he didnât set up a retirement plan for its 14 employees because of the costs and amount of time-consuming research required to do it right.
OregonSaves eliminated those obstacles. âEmployers are telling us they find the process easy to do,â said Lisa Massena, executive director of the program. âItâs just another payroll deduction.â
Businesses that donât already offer a retirement program will be required to register with OregonSaves and provide information about their payroll process and their employees.
The stateâs largest employers will start the process this fall; smaller ones will join in stages over the next three years.
OregonSaves will set up a privately managed Roth IRA for each employee and automatically deposit 5 percent of a workerâs paycheck into this account. Massena said employees can opt out or change their contribution rate anytime via oregonsaves.com.
Noorani said all but two of his employeesâone who is already retired and one who is about to retireâset up an account with OregonSaves. Max said the only Statehoood Media employees who waived participation live and work outside the state.
He said the program could give him an edge in recruiting and retaining employees like Miller.
âEveryone should be doing this,â said Max. âItâs a win-win for small companies and their employees.â
Mac McLean is a writer living in Bend.
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