Data from the OregonSavesplan itself found that 62 percent of those eligible to participatewere doing so, while 29 percent had formally opted out. (Photo ofOregon capitol building, Salem: Getty)

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The lack of retirement savings accounts at work forprivate-sector workers — only about half are covered by anemployer-sponsored plan at any given time — and the fact that fewworkers save for retirement on their own has led to several stateslaunching their own plans, auto-IRAs sponsored by the state thatautomatically enroll workers.

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Oregon was the first state to launch its plan, and according toa brief from the Center for Retirement Researchat Boston College, workers are responding positively.

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Related: Preferred recordkeeper to state IRA plans saysenrollment in Oregon better than expected

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Initial data reveal that although the plan itself has a fewrough spots, workers are taking advantage of the plan in a way thatlooks promising for the future—and also perhaps for the future ofsimilar plans in other states.

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The OregonSaves program intends to provide aretirement plan for more than a million workers whose employers donot offer retirement plans, who are not eligible for the plan thattheir employers provide or who are self-employed and have no planon their own.

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The first rollout has been for the first group, amounting toapproximately 500,000 workers, with the other two groups allowed toopt in. Data on the second and third group, however, are not yetavailable.

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And while employers registered for the program, with manysmaller employers actually registering early, it's another storywhen it comes to submitting employee contributions promptly.According to the brief, many of those small employers are likely tobe managing their payrolls manually rather than electronically.

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OregonSaves is designed with an initial contribution rate of 5percent, auto escalation at 1 percent annually till it hits 10percent and low fees on investments, and researchers wanted to seehow participants reacted.

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Predictions, based on participants in other 401(k)s, anticipated“opt-out rates of 20-30 percent and a tendency to stick withdefault contribution rates.”

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Data from the plan itself found that 62 percent of thoseeligible to participate were doing so, while 29 percent hadformally opted out.

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Another four percent set initial contributions to zero beforemaking an initial contribution and five percent had made somecontributions but subsequently set contributions to zero.

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Altogether, approximately 22,000 participants in the plan whohad balances as of November 30, 2018, held assets of more than $10million. In addition, participation is growing, adding nearly 2,000active participants per month during 2018.

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Older workers were slightly more likely not to participate,either because they could save through a spouse's plan or becausethey were “less likely to be passive.”

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There were three main reasons for non-participation overall; 30percent said they didn't have the money, 19 percent had their ownor another retirement plan and 12 percent didn't want to savethrough that particular employer.

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READ MORE:

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CalSavers lawsuit raises tricky ERISAquestions

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The conservative roots of state-run retirementplans

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Uber advocates for state-run portablebenefits systems

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