By: Joseph P. Yonadi, Jr. and Nancy R. Chawla
The ERISA Industry Committee (ERIC) has filed a lawsuit challenging the enforceability of the OregonSaves Retirement Program (OregonSaves). The ERISA Industry Committee v. Read, No. 3:17-cv-1605 (D. Or. Oct. 12, 2017).
Background: OregonSaves, a state-run retirement program, was established to help private-sector employees save more money. It mandates employers who do not sponsor a retirement program to participate in the program. Employers who sponsor a retirement program must file a “certificate of exemption” with the state in order to opt-out of the program.
OregonSaves went into effect on July 1, 2017. By November 15, 2017, employers with at least 100 employees, who do not sponsor a retirement program must begin participating in OregonSaves to remain in compliance with the Oregon law and regulations. See our previous OregonSaves blog post for additional information here.
The Lawsuit: On October 12, 2017, ERIC filed a lawsuit against Tobias Read, Oregon State Treasurer and Chair of the OregonSaves Retirement Savings Board. ERIC, a nonprofit trade association, represents large employers with at least 10,000 employees.
According to ERIC, the Employee Retirement Income Security Act of 1974 (ERISA) governs reporting of plan activities, thus, expressly preempting the “Oregon law and regulations requiring sponsoring ERISA-governed retirement plans to report to the State of Oregon on ERISA plan activities.”
ERIC seeks declaratory and injunctive relief. That is, it wants the Court to declare the OregonSaves statute is preempted by ERISA, and to enjoin the state of Oregon from enforcing the law.
Looking Forward: The lawsuit challenges a narrow issue: whether employers who already sponsor ERISA plans are required to report plan activities to the State of Oregon. The resolution of this issue will determine the action(s), if any, such employers will need to take in the future. Unless the OregonSaves law and regulations are stayed, they remain enforceable come November 15, 2017. ERISA plan sponsors should take actions accordingly.
On the other hand, the lawsuit does not challenge the enforceability of OregonSaves law and regulations against employers who do not sponsor a retirement plan. Thus, these employers should continue to prepare to participate in the OregonSaves Retirement Program.
We will continue to update you with any major developments in the Read case. However, employers operating within Oregon should seek counsel as to their obligations under the OregonSaves Retirement Program.