Monday, January 7, 2019
I was chatting recently with Bill Johnston-Walsh, director of Pennsylvania's chapter of AARP. I always enjoy catching up with Bill, as he gets involved in cutting edge issues and projects under development.
One of the hot topics he relayed to me are programs at the state level to support better on-the-job savings for retirement. Almost gone are the days of defined benefit retirement plans and employers may not offer defined contribution plans either. States are beginning to adopt laws that make it possible for employers to offer alternative, low-cost, voluntary approaches for employees, sometimes known as "Work & Save" programs, such as "OregonSaves." Here's a summary from an AARP report in July 2018:
Oregon was the first-in-the-nation to launch this innovative solution with OregonSaves in 2017, and as of July 2018 they already have over 58,000 workers enrolled and nearly $4.6 million saved. Of those eligible at this time, 73% have enrolled, and participants are saving $46.42 per paycheck on average. Check out how OregonSaves is helping workers save here.
Elsewhere, this year, Washington opened the first ever marketplace version of Work & Save, Washington’s Retirement Marketplace, and Illinois started a pilot of their Work & Save program, Illinois Secure Choice, with their official launch coming this fall.
These states are not alone – across the nation, states are recognizing the need to help all workers grow savings so they can take control of their futures and deal with the rising cost of health care and living expenses. In the past 6 years, 40 states have acted to implement, study or consider legislation to create Work & Save programs.
Convenience and portability for the employees seem to be two key components of the new approaches.