E-Newsletter Volume 7, No. #19

Over the last couple of months, I have devoted a fair amount of time in this column to the budget, PERS negotiations and issues regarding our state’s financial security. This week I would like to devote this space to a discussion of your financial security, particularly opportunities regarding individual retirements.  Last week, State Treasurer Ted Wheeler convened a forum of nationally recognized experts in the field of retirement security, especially with regard to those workers who have no retirement option through their employers.  It is a discussion that is long overdue, and HB 3436 has been introduced to get the ball rolling. 

Historically, Americans do not have a very good track record when it comes to saving a consistent percentage of their incomes and Oregonians are no exception.  Most Western European nations average savings rates in the 10-12% range, whereas our rates hover around 4%.  Participants at the forum indicated that the average worker should have accumulated about $500,000 in order to retire comfortably.  Unfortunately, 80% do not even have one year’s income in savings.  Many will be relying on Social Security as their sole source of income.  This means that roughly 1/3 of middle class Oregonians will be retiring at or near the poverty level.  It is incumbent upon us to look for ways to try to mitigate that prospect.

We know that if given a chance, Oregonians will take advantage of the opportunity to invest in a safe, accessible investment plan.  The success of the Oregon College Savings Plan is a clear example of how much Oregonians will embrace a well-designed system.  With this model in mind, HB 3436 establishes the Oregon Retirement Savings Investment Board and tasks it with developing a retirement plan for employees in the private sector who lack any other options.  Here are some features of the proposal:

• An automatic IRA account would be created for all Oregon workers
• Workers would be enrolled through their work, although they can opt out
• Enrollment would be voluntary
• It would not cost employers anything (no withholding costs)

Oregon is not alone in considering legislation like this, especially given recent experiences with both the stock market and the banking industry.  California enacted legislation in 2012, and eleven other states have considered it in recent years as a way to invest without the considerable expense and market risks to which individual savers are exposed.  If HB 3436 passes, Oregon workers will have another tool in the toolbox to help them secure a stable and adequate retirement.  The bill is currently in the Ways and Means Committee and if it gets to the House floor, I look forward to supporting it.

Yesterday I testified before the House Judiciary Committee in support of amendments to HB 2581.  The amended version of the bill is intended to assist the family of Jennifer Warren, a resident of St. Helens and a constituent, who was brutally stabbed to death in the course and scope of her employment.  Jennifer was murdered while delivering medications to a man who was under court mandated supervision by our state’s Psychiatric Security Review Board.

Because Jennifer was murdered “on the job,” current state statute provides immunity from liability caused by injury or death and places the incident under workers compensation law.  Under those statutes, the family of Jennifer Warren was paid $16,000, most of which was consumed by funeral expenses. This was not an accidental death – this was a wrongful death perpetrated by a person under state supervision.  The situation begs for a remedy as proposed in HB 2581, so that the Warren family, and any other victims similarly affected, can be justly compensated. 

The committee, though sympathetic to the situation, is prudently cautious when exposing third parties to lawsuits.  The Workers Compensation Division is equally concerned about the process.  The consequence is that the Judiciary Committee will study this situation during the Interim and attempt to devise a solution.  I am satisfied that, having brought this issue to the forefront, we will see some appropriate legislation next session, perhaps focused on the limited instances where a wrongful death is involved.

 Thanks for taking the time to read my newsletter…have a great weekend!