Ascensus, one of the nation’s largest independent retirement plan and college savings plan providers, has been selected to administer the Oregon Retirement Savings Plan, the first state-sponsored retirement plan in the nation, the Oregon Retirement Savings Board announced Friday.
The retirement plan, which will be phased in, will launch in July and will be implemented among businesses that volunteer for the program. Ascensus, based in Dresher, Pa., has $139 billion in assets under administration.
The new retirement plan was created by the Oregon because more than half of the state's workforce does not have retirement savings plans available at work, such as a 401(k), the board said. Studies show that people are 15 times more likely to save for retirement if they are offered a payroll deduction plan.
Workers who are eligible will automatically have a portion, initially 5 percent, of their paychecks deposited into their own secure retirement accounts, unless they opt out. The plan will be available to those Oregonians who lack a savings option at work.
“The Oregon Retirement Savings Plan will help build a stronger financial future for hundreds of thousands of Oregon workers,” said State Treasurer Ted Wheeler, the chairman of the Oregon Retirement Savings Board. “The administrator will be a key partner to ensure the plan works well for everyone, and the board was impressed by the expertise and services that Ascensus will provide.”
Ascensus will absorb early startup costs and be repaid over the life of the contract. The company will collect an annual fee from retirement accounts to cover the cost of administration, recordkeeping and marketing.
Ascensus administers more than 46,000 retirement plans and more than 3.8 million 529 college savings accounts. It also administers more than 1.5 million IRAs and health savings accounts.
The Oregon Retirement Savings Board is soliciting all sizes of businesses that want to be part of the initial pilot group of participants. Employers will not have any fiduciary responsibilities and little administrative work for the plan, according to the board. The plan will not have matching funds and there will be no guarantee of performance by the state or employers.