The Oregon Biz Report - Business News from Oregon

Read about accutane journal moderate acne here

PERS for private workers too?

August 6, 2014

nfib-logo
By Jan Meekcoms
Oregon NFIB
(Originally published in Salem Business Journal)

Has our public employment retirement system (PERS) in Oregon been so successful that we should force it on private enterprise by law?

Oregon’s current PERS deficit is in the billions. Add it to other public retirement systems around the nation, and the red ink is in the trillions.

One of the problems our state retirement system has created is having our public schools begging for more money while we’re paying people such as former University of Oregon athletic director Mike Bellotti more than $500,000 a year in PERS benefits and former Portland public schools employee Steve Goldschmidt more than $250,000 a year.

Why, then, do some think it a good idea to implement a PERS for the private sector? In the 2013 legislative session, House Bill 3436 offered the idea of a state retirement plan for private enterprise. Any business that did not have a qualified retirement plan for their employees would be mandated to facilitate participation in a state-run plan.

The foremost advocate of a private-sector PERS is the Service Employees International Union (SEIU). You can visit its website at www.SEIU.org to check out its campaign called “Retirement Savings for All” and see the union’s initiative for Oregon and other states. It’s part of a national effort rolling out across the country.

Because public entities and most large companies offer retirement plans, this comes down to a small-business issue. It is the smaller, private-sector employer who may not be able to afford a retirement plan for his or her employees. So, small businesses would be most negatively affected by the passage of a state-run retirement system for the private sector.

I recently polled some of our NFIB members asking if they offered retirement plans. The companies varied in size from five to 53 employees and had been in business from 14 to 53 years. All but one offered a type of retirement plan for their employees. The one that didn’t was a retail business with five Oregon stores.

That company said it would love to offer a retirement plan for their employees, but just can’t afford it, “we must put all of our efforts and resources into just keeping our doors open.” Like many firms, it’s still recovering from the recession.

Another business said it offers a 401(k) plan that matches 50 percent of employees’ contributions up to 5 percent of their annual gross salary. But of its 34 employees, only eight participate. This is a generous plan, and the company reports that the incomes of those participating are between $60,000 to $80,000 a year.

Bingo! Have we hit on the real essence of the problem here? Could it be that it’s not lack of access to retirement plans, but a lack of willingness – for whatever reason – on the part of those offered them?

A big helping hand awaits. According to government sources, there are:

– 1,820 broker/dealers who supervise almost 100,000 licensed sales people offering low-cost, easy-access options for retirement in Oregon
– 250 licensed life insurance companies with thousands of agents
– 18 state chartered credit unions with 147 branches around the state
– 26 state chartered banks with branches in virtually every community in the state and retirement products are also available online.

What business, then, does the state of Oregon have in going into competition with private companies that already exist to provide retirement plans to the individual and business markets? Its superior management skills?

Of those small businesses that reported offering retirement plans, all of them opposed a state-run retirement plan for the private sector. The reason: Lack of trust that government can do it better, or for less, than the private sector. Would forcing participation do anything to restore that trust?

  
Print This Post Print This Post    Email This Post Email This Post

Discuss this article

Rob Brostoff August 6, 2014

Pers shouldn’t be forced on anyone, it’s a privilege. It should be offered in the private sector as a 401K or IRA. PERS almost always beats the various indexes in returns, it would have smaller fees than almost anyone else can offer. By doing this private employers would have the ability to offer a retirement plan that was first class to employees with almost no cost financially or otherwise. A private employer could opt for making contributions if it felt that was in their interest, or PERS could offer a hybrid plan similar to OPSRP, it doesn’t have to be based on Tier1 and offer Mike Bellotti payouts.
Rob Brostoff

Rob Brostoff August 6, 2014

Pers shouldn’t be forced on anyone, it’s a privilege. It should be offered in the private sector as a 401K or IRA. PERS almost always beats the various indexes in returns, it would have smaller fees than almost anyone else can offer. By doing this private employers would have the ability to offer a retirement plan that was first class to employees with almost no cost financially or otherwise. A private employer could opt for making contributions if it felt that was in their interest, or PERS could offer a hybrid plan similar to OPSRP, it doesn’t have to be based on Tier1 and offer Mike Bellotti payouts.
Rob B

Leave a Reply

Your email address will not be published. Required fields are marked *

Top Business News

 

Top Women's News

 

Top Natural Resource News

 

Top Faith News

 

Copyright © 2016, OregonReport. All Rights Reserved. | Terms of Use - Copyright - Legal Policy | Contact Oregon Report

Stay Tuned...

Stay up to date with the latest political news and commentary from Oregon Business Report through daily email updates:

Delivered by FeedBurner

Prefer another subscription option? Subscribe to our RSS Feed, become a fan on Facebook, or follow us on Twitter.

RSS Twitter Facebook

No Thanks (close this box)