In May 2017, we issued a blog post outlining the development of the State of Oregon's OregonSaves program, which is billed as a Mandatory State Retirement Savings Program for employers. Just over a year later, the program is now open to employers of all sizes who have employees in Oregon and don’t currently offer an employer-sponsored retirement plan.
Just the other day, we received a notification from the program allowing us to opt out and receive our certificate of exemption. We thought we'd take that as a signal to republish an edited version of this post, since the program is still being rolled out and some of you might have missed the news last year. Here it is.
The State of Oregon is developing an Oregon Retirement Savings Program called OregonSaves. This is for employers who do not offer one to employees currently. Employees will need to be automatically enrolled in the program unless they opt out. Following are the remaining deadlines that have been established:
Employers must either register with the program or file a certificate of exemption by the following deadlines:
- December 15, 2018, for employers with at least 20 but no more than 49 employees
- May 15, 2019, for employers with at least 10 but no more than 19 employees
- November 15, 2019, for employers with at least 5 but no more than 9 employees
- May 15, 2020, for employers with 4 or fewer employees
Within 60 days after an employer's registration deadline, it must enroll its participating employees by providing the following information:
- Full legal name
- Social security number or taxpayer ID number
- Date of birth
- Mailing address
- Employee's designated e-mail address
If your company qualifies for an exemption because you offer an employer-sponsored retirement plan, you must receive a certificate of exemption by registering your company on the OregonSaves website.
Employees who do not opt out or specify a particular contribution rate will be enrolled using a Standard Election of 5% of their compensation to be channeled to a Roth IRA, with auto-escalation at the rate of an additional 1% of their compensation each year, until a maximum of 10% is reached. The first $1,000 is invested in a Capital Preservation Fund, to help protect the initial investment, and then amounts above that will be invested in Target Retirement Funds based on age. Employees do have the option to opt out of the savings plan either online or by completing the paper form.
For more direct information about the OregonSaves program, you can visit their website or call their Client Service team from 8:00am to 8:00pm PT, Monday through Friday. The number is (844) 661-1256 for employer assistance and (844) 661-6777 for employee assistance.
And to complicate matters, there is legislation that the current administration is expected to sign which will likely roll back state savings arrangements which were passed during the Obama administration. However, it is currently Oregon’s intent to try to move forward with a State-run retirement plan even if the President does sign the expected legislation to roll back the federal plan.
Washington and other states would need to implement the plan if the federal program does not get rolled back. Washington is not one of the five states (California, Connecticut, Illinois, Maryland, and Oregon) that have passed state plans at this point if the federal program does get rolled back. The current Oregon program also states that if employers have employees in multiple states, they only need to facilitate the program for the employees with income in Oregon.