By: Joseph P. Yonadi, Jr. and Nancy R. Chawla
OregonSaves Retirement Program
On July 1, 2017, OregonSaves Retirement Program (“OregonSaves”) went into effect. OregonsSaves is sponsored by the State of Oregon, and is a state-run automatic Roth Individual Retirement Account (“IRA”) for private-sector employees.
OregonSaves will operate such that employers who do not sponsor a qualified retirement plan will be required to automatically enroll employees into the OregonSaves program, and employees will be required to contribute 5% of their compensation to a Roth IRA account. However, employees will be able to opt-out, or choose a different savings rate. After the employer completes the initial employee registration to set up its employees’ Roth IRA accounts, its ongoing obligations are limited to providing OregonSaves update information to its employees, and to make ongoing payroll deductions. Employers are not required to make contributions under OregonSaves.
All employers in the State of Oregon will have to take an action, whether to enroll employees or file a Certificate of Exemption. The following schedule has been established for employers to register with OregonSaves.
Employers that are not exempted from the OregonSaves program will have to take the following steps:
1. Register for the program when notified by the State;
2. Provide basic information about their employees to allow the State to set up employee accounts;
3. Pass along information about OregonSaves from the State to employees;
4. Make payroll deductions for participating employees; and
5. Keep track of what was paid.
Oregon is not alone in establishing a state-run retirement plan. To date, eight other states have approved legislations that establish state-run retirement plans for private sector employees: California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, Vermont, and Washington.
Next Steps for Employers
It remains to be seen whether these programs are challenged as preempted by ERISA.
For now, employers with employees in the State of Oregon will need to comply with the requirements of the OregonSaves program. Employers who already sponsor a retirement plan, such as a 401(k) plan, will need to file a Certificate of Exemption. Those employers who do not sponsor a retirement plan will need to register for the program per the registration schedule set forth above. Further, such employers will have to set up internal systems for payroll deductions. Employers who are required to enroll their employees into OregonSaves program should seek a counsel’s assistance to ensure compliance with the requirements of the state law. For additional information regarding OregonSaves please go to: https://employer.oregonsaves.com/.
 A Certificate of Exemption is valid for three (3) years from the date the Employer files the Certificate.