(updated with correction)
The increasing number of non-traditional workers presents a challenge to employers, government and society as a whole to prepare these workers for adequate savings, several speakers said Tuesday to attendees at Pensions & Investments' Global Future of Retirement conference in New York.
"Contingent workers are probably more vulnerable to retirement insecurity," said Matthew Rutledge, research economist at the Center for Retirement Research Boston College.
These contingent workers "most likely, will be less prepared than traditional employees," Mr. Rutledge said during a panel discussion, "Ensuring a retirement future for the growing ranks of an unconventional workforce."
Research indicates the prevalence of contract-firm workers, temporary employees, on-call workers and independent contractors has climbed to about 16% in 2015 vs. 10% in 2005, said Mr. Rutledge, referring to a 2016 study by researchers at Harvard University and Princeton University.
Contingent workers are vulnerable because they have less job security, or less income stability — and that means less savings, he said.
The challenges of engaging and encouraging these workers to save are considerable, he said, starting with the need for greater research to determine what causes lower savings rates.
The Oregon State Treasury is trying to address covering workers via OregonSaves, a program that offers a retirement plan to workers whose employers don't provide retirement plans and to self-employed workers.
OregonSaves is being offered to 11 small employers — with an aggregate of 150 workers — in a pilot program this year, with a phased-in rollout next year, explained Lisa Massena, executive director of OregonSaves.
There are 600,000 employers who offer no retirement plan, and they will be able to opt out of OregonSaves. There are 200,000 self-employed people who must opt-in to the program.
"If a 401(k) and an IRA got together and had a child," OregonSaves is the offspring, she said. For the former, OregonSaves' features include, among other services, automatic enrollment, automatic escalation and professional management. For the latter, OregonSaves enables portability from one employer to the next.
For workers who stay with OregonSaves, employers automatically deduct a portion of workers' pay. The money is invested in a low-fee IRA. The program doesn't provide investment or financial advice.
