The Trump administration may have put the kibosh on state- and municipal-run retirement plans for those workers who aren’t offered one at work, but that doesn’t mean that all the states are listening.

Oregon, for instance, has become the first state actually to launch its program that requires private employers either to offer their own 401(k)s or automatically enroll workers into state-run individual retirement accounts.

The Fiscal Times reports that the OregonSaves program has already begun, with a “modest” pilot project, but by mid-2020 it will be rolled out to all businesses.

Employees are automatically enrolled in the program unless they opt out, and automatic payroll deductions will withhold up to 10 percent of their pretax income as contributions.

Considering that most Americans have failed to save anywhere near enough for retirement—the report cites a study showing that median savings for households near retirement age is a paltry $17,000—and that in Oregon alone, more than a million workers lack a retirement savings option at work, that makes it tough for people to save on a regular basis for retirement.

The Roth IRAs offered through the OregonSaves program are portable and follow workers from job to job. While employers’ chief responsibilities are handling the payroll deductions and passing along information to employees about the program, they’re not responsible for contributing to the retirement accounts.

Oregon’s not the only state to set up its own program, although it is the first to get it into operation. Illinois, California, Connecticut and Maryland have all passed similar auto-IRA programs, but they’re not scheduled to launch till 2018—or early 2019 at the latest. Several other states, including Washington, New Jersey, Massachusetts and Vermont, have also passed legislation that creates other types of state retirement programs.

The Oregon plan requires that employees pay an annual service fee of 1.05 percent of their investments to an Oregon Retirement Savings Board handling their accounts and overseeing the investments. Employee IRA contributions begin at an initial rate of five percent of their pay, gradually rising to a maximum of 10 percent. Employees who do not wish to enroll have 30 days in which to drop out of the program.

The Trump administration, along with congressional Republicans, has sought to stop states’ efforts to launch their own programs, siding with financial trade groups such as the Investment Company Institute, Financial Services Institute and Insured Retirement Institute in claiming that such plans could put employees’ savings at risk and create an economic disadvantage for private-sector retirement plans.

Democrats, on the other hand, say that Republicans are merely doing the bidding of the financial industry and that the latter fears new competition.

Instant Insights /

Oregon proceeds with retirement plan for workers who lack one

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