OregonSaves Boosts State Retirement Program with $5 Million Injection from American Rescue Plan

The Oregon Retirement Savings Board, in collaboration with State Treasurer Tobias Read, has announced the allocation of $5 million from the American Rescue Plan Act (ARPA) to support Oregon's Department of Early Learning and Care (DELC) in funding retirement accounts for over 900 childcare service providers in the state.

These funds were secured through negotiations facilitated by the American Federation of State, County and Municipal Employees (AFSCME) union and their Child Care Providers Together (CCPT) group, with advocacy from former Oregon Governor Kate Brown. The allocation reflects a concerted effort to address the financial needs of essential workers in the childcare sector.

Following a thorough evaluation process by a joint labor-management committee, OregonSaves emerged as the preferred program provider for this initiative. The decision was based on OregonSaves' demonstrated commitment to promoting the financial well-being of workers statewide, making it a fitting choice for administering the ARPA funds on behalf of this vital group.

“We are proud to have played a key role in bringing this retirement benefit to Oregon’s critical childcare service providers, ensuring a strong start on their path to retirement security,” said Oregon State Treasurer Tobias Read. "This strategic investment in the financial future of childcare workers reflects Oregon's commitment to fostering economic security for all of its residents, a commitment shared by Oregon State Treasury and OregonSaves.”

In the autumn of 2023, eligible childcare workers were invited to join OregonSaves, offering them the chance to establish accounts and access a portion of the $5 million ARPA allocation earmarked for certified family childcare providers. Those who signed up before the December cutoff date received an initial disbursement of $4 million, equating to approximately $4,400 per participant, aimed at bolstering their financial stability. The remainder of the funds is slated for distribution in March, ensuring that all eligible OregonSaves accounts are funded and that deserving workers receive their entitled benefits.

The involvement of DELC, responsible for licensing childcare providers, proved instrumental in supporting this endeavor. Collaborating closely with AFSCME, whose proactive outreach efforts ensured union members were well-versed in their retirement options, exemplified the importance of partnership in championing the welfare of childcare workers.

"Before our union negotiated a retirement benefit with the state, I didn't have any savings or ability to plan for retirement" said Gracia Ramirez, a Certified Family Child Care provider and member of AFSCME Child Care Providers Together. "This is an important benefit for childcare providers like myself who work long hours and devote our lives to young children and families in our community. To have an initial investment to begin saving for our retirement is something I can honestly say I didn't think was a possibility" continued Ramirez.

"Providing retirement security is a crucial step toward making this a more sustainable career option for Oregon's dedicated childcare providers," said Joe Baessler, Executive Director, Oregon AFSCME. "We will continue to work together with the State and Legislature to ensure providers across the state have the resources and support necessary to not only provide top notch care but to support their own families," continued Baessler.

Expanding its reach, OregonSaves extends its successful model to encompass the Oregon Personal Support Workers in late 2020, showcasing the program's dedication to broadening access to retirement savings across diverse employment sectors. A recent study conducted by Kean University and the University of Wisconsin - Madison - Center for Financial Security underscores the significant influence of OregonSaves in bolstering retirement savings among previously underserved private workers, particularly within low-income communities.

Pioneering the concept, OregonSaves remains at the forefront of a nationwide movement, setting a precedent for 18 states that have since adopted similar initiatives. The momentum continues to grow, with 25 states introducing legislation related to state retirement programs during the 2023 legislative sessions, highlighting the enduring impact and relevance of Oregon's pioneering effort.

With the inclusion of childcare providers, OregonSaves expands its participant base to over 124,000 workers, collectively setting aside $251 million towards retirement. As this figure continues to rise, both participating individuals and the state stand to benefit from the long-term positive outcomes facilitated by OregonSaves.

Source: State of Oregon