Glasses and a pen resting on a paper headed
The looming retirement crisis is real and at least some governments—state governments—are recognizing it and attempting to act. Recently, California and Oregon have each taken steps that could lead to the establishment of state-run retirement savings programs for residents who work in companies and organizations that don't offer retirement plans.
Last week, the lower chamber of the state’s legislature passed a bill that would authorize a task force, composed of representatives from employers, the financial services industry, and government, to consider whether Oregon ought to establish such a system. Supporters of the measure say it has bipartisan backing in the state Senate, and Gov. John Kitzhaber also supports the bill.

Last September, California Gov. Jerry Brown signed similar legislation.

Oregon’s bill would give the task force until the end of 2014 to draw up a plan; the legislature would have to vote again on whether to implement it. The bill bars the task force from including in the plan any guarantees that would “cause the State of Oregon to incur any liability or obligation for the payment of savings or benefits earned by plan participants.” It also requires any plan to “be available to all working Oregonians on a voluntary basis.”

California's proposal is more targeted, and would require private-sector employers with five or more workers and who don't currently offer a retirement plan to automatically deduct a contribution from employees' paychecks into an IRA at a savings rate of three percent of pre-tax salary. It does allow employees to opt out of the automatic savings program. A handful of other states (Illinois, Rhode Island and Massachusetts) are considering or have already enacted similar plans.

These savings are intended to act as a supplement to Social Security. What's important about them is the that there's a growing recognition in state governments that too many of us are facing insecure retirements. The mechanism might be flawed: more deductions from what for too many are already paltry paychecks and relying on a 401(K) or an IRA system that has shown its vulnerabilities in this great recession. But what matters here is the acknowledgement that something has to be done, and done sooner rather than later, to boost retirement security.

The foundation of these efforts has to be a strong and stable—and more generous—Social Security program, something that is guaranteed and can be relied upon regardless of what the markets are doing. Now that more and more states are paying attention to the fact that something serious has be done, it's time for federal policymakers to take up the challenge.

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Originally posted to Joan McCarter on Fri Jul 05, 2013 at 10:57 AM PDT.

Also republished by Daily Kos.

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