OregonSaves: Three Years Young

In 2015, then-state legislator Tobias Read was the lead sponsor for House Bill 2960, proposing creation of a statewide savings program for workers whose employers don’t offer retirement plans. The bill passed and was signed into law that June.

In 2016 Read was elected State Treasurer, and in 2017 it was his pleasure to oversee the program’s start, as OregonSaves accepted first contributions from employees.

In January of 2018 the program went live statewide, rolling out first to employers with 100 or more employees and no plan. The rest, as they say, is history unfolding. Join us for the Treasurer’s insights, and more.

Treasurer Read, you just won re-election to a second term as Treasurer of the great State of Oregon. Tell us about your priorities for the coming term.

Yes. It was certainly a campaign unlike any other I've ever been part of, but I'm really gratified by the results. And I think it represents an endorsement of the approach that we've tried to take in my first term of not pursuing headlines for headlines’ sake, but really trying to focus on the core responsibilities of the office. Among those has been trying to meet people where they are in their everyday lives. This is  obviously a challenging time for people in Oregon. A big part of our priorities for the next year plus is putting Oregon in a strong position to deal with the realities of the pandemic and the economic circumstances that have resulted.

You have some good tools in your toolkit.

OregonSaves has been a big part of that as you well know - putting people in a better position to absorb the disruption that the pandemic has caused. Our priorities are to continue to roll the program out, to continue to make sure our revamped college savings plan is relevant and known to people, and to continue professionalizing, modernizing and -- I don't know if inoculating is exactly the right word -- but bolstering the rest of our investment operations to be ready for whatever other disruption comes. We’re thinking the same way about our bonding offerings as well. And making sure that we're a trusted source of information for the legislature and the Governor, as the state navigates some turbulent waters.

As OregonSaves program approaches its three year anniversary it looks like there are over 85,000 people who've been helped by the program and close to $80 million dollars in assets saved. The number of employers facilitating and the number of people funding their accounts continues to be steady. And in fact, they go up month after month. Tell us a how you're seeing the program now, three years in.

One of the great aspects of this program has been to see those continued increases. And it feels like pretty swift growth for a new program like this. And I think you put your finger on what is really encouraging -- despite all the very real challenges that people are absorbing and dealing with, they continue to save. We've also seen the reality and the improvement for these folks against the stat that we're all familiar with from a couple of years ago, that half of American families couldn't absorb a $400 unexpected expense without selling something.

Well, we're now at an average account balance of more than $900. We’re not trying to position the program for emergency savings, but it's a heck of a lot better than a title loan or a payday loan if it’s really needed. So the program has been relevant in new ways.

So there’s been some emergency savings use in this pandemic.

Yes, and that is an interesting discussion to have too. Obviously our roots and our priorities are around retirement, but it's given us entrée into conversations with Oregonians about the range of savings needs they confront.

Tell us what you see next.

We have taken a pause for the smallest employer groups recognizing what a lot of small businesses are dealing with in the COVID world. But we've got to continue to roll the program out. We continue to focus on making it a smooth and light-touch experience for employers and to make it easy and pleasant for savers. And where useful we are offering our experiences and lessons to other states that are contemplating setting up Auto IRA programs. I just had this conversation with another state legislator yesterday. So, we're trying to really be aware of our position as a pioneer on this and make the way smooth and comfortable as possible for those who might want to follow us.

As a pioneer -- you carried the legislation, Oregon was first to launch -- you've probably had a few lumps and bumps. But you've also got the track record showing that people will take you up on the opportunity to save at work, if it's given to them in a convenient way. What do you see this meaning for Oregon in 10 years, 20 years, even 50 years?

I like to think about it that way, because as exciting as it is to see 85,000 people with an average account balance of $900, that's not it. The thing that motivates me … well there are two things. One is to think from a numerical point of view, about that person who is coming into their working life, getting into the habit and the idea -- almost without knowing it -- that some portion of their income needs to go to savings.

Decades into the future as they approach the end of their working life, they'll have choices.

They'll have options. I say this all the time to my Republican friends, even if your only interest is in small government, this is something you should like because people who have those choices are going to need less assistance from taxpayers.

So I love to think about decades in the future. When we have set that norm, when we have built a culture of savings in Oregon, that’s a big deal. Obviously, Treasury thinks about college and about disability savings and a whole range of family-supporting savings. That's going to be good for our resilience, for our quality of life, and everything else. That's the numerical in the long run.

We love it! What’s your second motivator.

Also in the long run but less numerical is the feeling that we're giving to people. There are lots of examples of this, but the one that always sticks in my mind is Bud at Mount Ashland, working in the lodge at the ski area. He's describing part of his financial life before OregonSaves and his brow kind of furrows and he says something like, “I didn't know how to start saving for retirement, and I didn't know what to do.” In my mind Bud is giving voice to the people I imagine feel kind of disconnected and isolated in their financial life.

And then as he begins to describe OregonSaves, his brow lifts, his face lightens, and you can see him saying, “And now I feel like I'm getting ahead. I'm watching my statements and it's adding up. And I feel like I've got a future.”

That sense of empowerment and that invitation to the financial mainstream for lots of people who otherwise haven't felt it is a really powerful thing. I think every Oregonian and frankly, every American, everybody in the world, ought to want that for their neighbors and fellow citizens. So it's that combination of long run numerical empowerment and just the notion of we're all together. And we all have a stake in each other's success that gets people excited.

That's awesome. Thank you. As we leave 2020, which we are all going to do, and we get into 2021, what are your near term priorities for the Oregon Saves program?

The biggest priority is to continue making the program as accessible and as easy to use as possible. We want to make sure we're interacting with employers -- and particularly that group of small employers that we haven't yet onboarded -- in a way that that acknowledges and respects the realities they're dealing with. We want to make that as smooth as possible. We want to continue to make the experience for savers relevant and easy to deal with as well. And we've got to make sure that the program is on a good path, including managing costs and experiences for both of those groups in the most effective way.

One of my challenges is to resist the temptation to say, here's the list of all the other things that I hope we're going to do eventually. We've got to be walking smoothly and solidly before we start trying to lope along or even to run. And we are on a great path.

Tell us more.

We get asked all the time, are you on track? And I say, well, there wasn't any track. It’s a new space! We evaluated scenarios and we're managing to those scenarios very well. The goal was to provide retirement savings access in a way that really works for folks. And we’re seeing that it does.

We have a good relationship with our legislature who loaned us the startup capital. We're trying to balance that desire to be everything to everyone right away with the desire and need to be responsible to our customers, to our savers, to make sure the program is economical and meets their needs. So I feel really good about where we're headed. I can’t wait to have this conversation in a couple more years we'll have bigger numbers – more savers, with bigger retirement account balances.

Absolutely. So you mentioned something important. We’ve talked to states as they are preparing to pass legislation to consider coming to the table with a little bit more financial ammunition, meaning, include an appropriate fiscal note in your bill. Talk to us about that and about best practices you share with other Treasurers.

I do think adequate start up funding is important. And I'll talk about the question of partnerships really quickly. We went back to the legislature to give ourselves the authority to enter into partnerships with other states. So I definitely encourage other states to make that part of their legislation initially.

We had conversations about enforcement, which we put into a subsequent piece of legislation.

I think your note about cost and fiscals is a good one. But it is also a question of politics in a lot of cases. I’ll liken it to this: when is the right time to start saving? Well it was yesterday!

So to legislators, get what you can get and get started.  Yes, more is better. But I feel really strongly that you shouldn't limit yourself. You should get going.

Here’s another one. In a recent conversation with one legislator, they described amendments that would exclude people below a certain income level. And I said, I think that's crazy. I don't think we should be doing that. I have confidence in the ability of people to make their own decisions. We shouldn't be making that decision for them, and it cuts against the argument -- the whole idea -- that everyone should have access.

So we've got to recognize the unique politics of each state and locale. But the fundamental reason to do this remains; it's a good investment, it is to give people the chance to build the financial future they want, and it relieves future state expenses. So that part is consistent everywhere.

And we hear you saying, keep it simple. What haven’t we asked?

I think I would restate what I just said, which is just get started. Don't let the perfect be the enemy of the good. Like retirement itself, taking this on can seem intimidating and like something you'll get to later on, but get started. There are lots of people, lots of states here to help and everybody wants everyone else to be successful in this. This is not a competitive environment. This is where, as we often say in other aspects of politics, “R&D” stands for “rob and duplicate”.

It’s a very collaborative space, which is one of the things we've always liked about it. All right. Fun question! Do you have a favorite pandemic silver lining?

Yes, my extended family has been, since pretty early on, doing a weekly zoom call that never happened before that and I think it might stick. I know I'm not alone in that, but a few of those ways of connecting with people that have started, will hopefully stick.

🏔 🏔 🏔

That's awesome. Thank you Treasurer Tobias Read! If you’d like to connect directly with Treasurer Read and his office you can reach him at (503) 378-4000 or Oregon.treasurer@ost.state.or.us. You can follow the work of the Oregon State Treasury on Twitter here: @OregonTreasury. And you can follow and engage with OregonSaves, @ORSaves and at its Board site.

This piece was featured in the December 31, 2020 edition of Retirement Security Matters. For more fresh thinking on retirement savings innovation, check out the newsletter here.