States to pick up slack on retirement savings as feds back out

Personal Finance

The way OregonSaves is constructed involves a payroll deduction that is allowed under ERISA and comes with no fiduciary requirements imposed on the employer. And although the Obama administration had created a provision to protect these programs from legal challenges, that carve-out was removed in May by congressional lawmakers.

Supporters think the concerns are overblown.

“These programs have all sorts of safety mechanisms in them,” said Lisa Massena, executive director of OregonSaves. “We’ve worked very hard to make sure everything is in place to provide for very strong governance.”

So far, Massena said, the first month has demonstrated how workplace options boost savings. Of the 160 eligible employees, 37 workers (23 percent) opted out. Of those, 12 did so due to already having a retirement account.

For the second pilot phase — registration for it starts Aug. 15 — 42 employers are interested, representing 2,189 employees, according to program data. The size of the companies ranges from three employees to 570.

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