Republicans Weaken Oregon's Big Plan For State-Run Retirement Accounts
The Republican-led Congress has thrown a monkey wrench into Oregon’s plans to set up retirement savings accounts for workers who don’t have one offered by their employers.
The Senate on Wednesday voted 50-49 to send President Donald Trump legislation aimed at curbing the plans Oregon and at least six other states are working to set up.
The legislation repeals Obama administration regulations that provided legal protections for states that offer these plans.
The state-sponsored plans have come under heavy fire from segments of the financial industry that fear it could hurt sales of their own retirement savings products. And many businesses groups didn’t like being required to help funnel worker pay to state-sponsored plans.
Oregon Treasurer Tobias Read said after the vote that he still plans to proceed with the new retirement program, known as Oregon Saves.
But Read also said the legislative action makes it more difficult. The congressional action could make Oregon's plan more vulnerable to a legal challenge.
“Today, in the face of a multi-trillion dollar retirement savings crisis,” Read said in a statement after the vote, “Congress chose to side with the special interests over working Americans.”
Oregon’s plan requires employers who don’t offer retirement packages to put 5 percent of their workers’ pay into a state-run savings account. Workers could opt out if they don’t want to participate. Oregon plans to start with a small test of the program in July.
Oregon Democratic Sens. Ron Wyden and Jeff Merkley both voted against overturning the regulations protecting the savings plan.
“The fact is, Oregon Saves is simple, it’s easy to understand, and it’s exactly the kind of innovative program that’s needed to combat the savings crisis in this country,” Wyden said in remarks prepared for the Senate debate. “So it’s an absolute head-scratcher why the majority party in Congress would want to hang a menacing cloud over state auto-IRA programs.”
Merkley called the Senate action a "shameless Wall Street giveaway."
Sen. Orrin Hatch, R-Utah, led opposition to the regulations.
He charged that the state-run programs could engage in risky investing practices and that he didn’t want to see the spread of government-mandated retirement programs.
Copyright 2017 Oregon Public Broadcasting