A salon in Portland, a brewery in Astoria and an industrial fabric manufacturer from Eugene now have employees with retirement programs.
They are among the 459 small businesses that recently enrolled in Oregon’s state-run retirement program, OregonSaves. That represents the second phase of a program meant to provide workers a simple way to save for retirement.
The final phase starts next May, opening the door for companies with four employees or less.
More than 54,000 Oregonians at 3,637 businesses have enrolled in the program since it debuted a year ago. They are saving with Individual Retirement Accounts set up by the state and those accounts now hold around $36 million in assets.
According to Michael Parker, director OregonSaves at State Treasurer’s Office, the program helps employers who aren’t able to otherwise provide retirement savings.
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“We feel this program has the ability to make a huge difference, not that it’s going to cover the entire retirement of every employee, but those who have this option after a few months are seeing a difference,” Parker said. “Folks out there who haven’t saved before are suddenly saving $1,000-$2,000 and now they love to save. It’s a cultural shift for Oregon, which is a huge impact on the state in assets folks are saving for the future.”
Under the program, employees are automatically enrolled unless they elect not to participate, having a portion of their pay automatically deducted and deposited into OregonSaves. Participants then choose from more than a dozen options and strategies for the state to invest their savings with the goal of maximizing those funds by their expected retirement date.
The program was established by the Oregon Legislature in 2015. California and Illinois have similar programs, but neither have experienced the success of OregonSaves.
“We’ve all got a stake in this because Oregonians who have assets, who have saved, are going to higher quality of retirement life and they will be less of burden on state and local budgets that are already stretched,” said State Treasurer Tobias Read.
Kim Stegeman, CEO and co-founder of the Rose City Rollers roller derby league in Portland learned of the program from a passing comment at her gym. Once she dug into the details and found out how it could benefit her employees, she was in.
“I wanted to be someone who was encouraging my staff to start saving and planning for retirement,” Stegeman said. “I wish I would have started investing when I was like 24, and now I’m playing catch up. I don’t want that for my employees.”
According to Stegeman, the program only took about 15 minutes to set up on her end, and the help available from State Treasury employees made the process efficient.
Her bookkeeper easily implemented the retirement savings program into the firm’s Quickbooks payroll.
According to Parker, the program is designed to mesh well with all types of payroll tools used by small business.
Luke Huffstutter, owner of Anastasia Salon, said he had an easy time setting up his business with OregonSaves and recommended other business small business owners join in.
“I think it’s really important the state has created something that makes the process easier for people to participate. Statistics show that when auto-deductions are available for people, they choose to save at a much higher rate,” he said.
According to Huffstutter, about 80 percent of his 45 employees decided to participate.
Parker said that OregonSaves is seeing about 70 percent participation by employees at businesses that have signed up.
Parker said the state is working to make set-up process even quicker and less time consuming for businesses.
The biggest challenge is getting the word out, he said.
“Our challenge with OregonSaves is making sure employers know about the program and know they have support. We have two people on the ground that can do in-person trainings for employers and employees,” Parker said. “We’re mindful and appreciate that the employers are the gateway to helping these employees.”
Parker added that OregonSaves helps employees in sectors where retirement benefits aren’t traditionally offered such as in restaurants, small retail shops and even the cannabis industry.
Contact reporter Sam Stites: email@example.com or 971-255-2480.