State Retirement Plan Bad Idea For Everyone Involved
“No other state has implemented such a plan because of these obstacles”
March 12, 2015—Testimony on the House version of two bills that would put the state of Oregon in the business of managing retirement plans for the private sector are currently being heard in the House.
“Legislators would be wise to think long and hard about the possibly perilous road they could send Oregon down,” said Jan Meekcoms, Oregon state director for the National Federation of Independent Business, America’s largest and leading small-business association with 350,000 members nationwide, including more than 7,000 in the state. NFIB is part of a 23-member coalition hoping to be heard on why allowing the State Treasurer’s office to create an Oregon Retirement Savings Board is expensive, duplicative, complicated and needless.
“House Bill 2960 and its companion measure, SB 615, are fraught with problems for everyone concerned,” said Meekcoms. “Smaller employers will be saddled with a new body of regulations and liability exposure beyond their already strained abilities to manage; and entry-level, low-skilled and lower-wage employees in particular will be automatically enrolled in a retirement plan dictating a pre-determined defined contribution with a portion of their income. The federal government already offers a plan for small-business owners and individuals called myRA, which does everything proponents want to do in Oregon without costing Oregon taxpayers or small businesses. There is already a vibrant market for retirement plans tailored to the needs of any business or individual. The problems shoe-horning a state retirement plan in with all the requirements demanded by the federal ERISA law have not been resolved; and what on earth makes the state of Oregon think it’s fit to manage the retirement plans of private-enterprise employees when it struggles to effectively manage the one for its own employees.”
In a four-page letter the coalition has submitted for testimony, other problems are raised. “It would impose a sweeping mandate on Oregon employers and would subject those employers and the State of Oregon to huge costs, risks and liabilities. No other state has implemented such a plan because of these obstacles. … The permanent Board created by House Bill 2960 has enormous and apparently unchecked power to design, ‘establish, implement and maintain’ a defined contribution plan for hundreds of thousands of Oregonians, without further approval of the Legislature and without conducting a fiscal analysis of this plan.” [bolded emphasis added]
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