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Tobias Read of Beaverton describes savings plans for advanced education, retirement and people with disabilities during a talk at Washington County Public Affairs Forum.

PMG PHOTO BY PETER WONG - State Treasurer Tobias Read speaks Monday, Oct. 14, at the Washington County Public Affairs Forum in Hillsboro.State Treasurer Tobias Read says three programs run by his office can help more Oregonians save for advanced education and for retirement, and enable those with disabilities to build savings.

Read, who was a state representative from Beaverton for 10 years before his election as treasurer in 2016, spoke Monday, Oct. 14, at the Washington County Public Affairs Forum.

"All of these programs are united by our mission to improve the financial condition of Oregon and Oregonians," he said.

"The more we give people opportunities to save and invest for themselves, the better off they will be and our state will be. It's a matter of longterm prosperity and thinking as to where we are headed as a state."

While still in the Oregon House in 2015, he was the chief sponsor of legislation that led to Oregon Saves, a program he now oversees as state treasurer. Oregon Saves enables the estimated half of all Oregon workers without access to a savings plan at work to start individual retirement accounts.

Read's predecessor — Ted Wheeler, now the mayor of Portland — was among officials in several states to initiate moves toward such programs after national studies disclosed that many workers have saved little or nothing as they approach retirement. Financial industry lobbyists argued that plenty of plans were available, but officials said voluntary plans have drawn little participation.

Oregon was the first state to put its program into effect in 2017. Workers have accumulated $31 million in savings so far; they can opt out of the small automatic payroll deductions, but most have not.

"We all have a stake in this," Read said. "If our neighbors do not have their own assets or savings, they are going to need help with transportation, housing or health care, all the basic necessities of life. I do not have to tell you those will put an additional strain on our already-stretched state and local budgets."

Read also talked about changes to the Oregon College Savings Plan, which is about two decades old, that will encourage more participation by low- and moderate-income families. A greater share of plan participants are higher-income families in metro areas.

The 2019 Legislature refigured a tax credit, which is subtracted directly from taxes owed, for contributions made to an education savings account. The tax credit is refundable for households that owe no state taxes. Read said money from such accounts can be spent on any form of post-secondary education, not just a four-year college, and is not limited to institutions accredited in Oregon.

"What it means is that if you make a contribution to a college savings account, you are going to have a smaller tax bill or a larger tax refund," he said. "We are the first state to take this approach. It is one of the ways we are trying to create a culture of saving."

In 2018, the state treasury started Baby Grad, under which the state contributes $25 to an account set up for a child's future education if the account is created before the child's first birthday. As of Aug. 1, the treasury started Kinder Grad based on the same principle. The account can be set up by anyone, not just the child's parents, and requires only a Social Security number.

"They are likely to continue saving" if there is an account earning interest over 18 years, Read said. "With someone believing in them, they are more likely to finish college.

"If we are not investing in kids' futures today, we are sacrificing their potential of a lifetime of financial security."

A third program, Oregon ABLE (Achieving a Better Life Experience), was made possible after a 2014 federal law cleared the way for people with disabilities to set up savings accounts. Read said they were often unable to do so prior to that law, because they would have lost many state and federal benefits when their assets exceeded a limit of $2,000.

Read said their ABLE accounts now account for about $12 million in savings.

Read, 44, a Democrat, said he plans to seek a second term in 2020, but would not speculate about his future after then. The treasurer, along with the governor and secretary of state, is limited to two consecutive terms.

The treasurer is responsible for state banking functions, issuance of state bonds and investment of state and local funds, the largest of which is the $80 billion Public Employees Retirement System fund. The treasurer is one of five members of the Oregon Investment Council, which oversees the managers responsible for returns.

Oregon is one of the nation's largest public investors, and Read said the state's investment earnings in a wide variety of programs have consistently led its national peers.

Asked later about the possibility of "social impact" bonds, whose investors would receive returns in the form of savings from avoided problems such as homelessness, Read said his office is prepared to research them further. But he said the decision is ultimately up to the Oregon Legislature, which decides in each two-year budget what the state's bonding capacity should be.

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