OregonSaves Exemption Deadline Fast ApproachingPublications - Client Alert | October 26, 2017
Large Oregon employers that offer a qualified retirement plan to their employees should be aware of an upcoming deadline for compliance with Oregon’s state-run retirement program, OregonSaves. The deadline for employers with 100 or more covered employees to file for a certificate of exemption is November 15, 2017. By timely seeking a certificate of exemption, employers will avoid having to comply with nearly every requirement of the program.
OregonSaves allows eligible individuals who work in Oregon to contribute to a retirement account in their name via payroll deduction. All contributions are made on an after-tax basis and deposited into a Roth IRA. Employers must offer their employees the option to contribute to an OregonSaves account unless they offer a qualified retirement plan to their employees.
If an employer does not offer a qualified retirement plan to its employees or does not timely file for a certificate of exemption, it will be subject to OregonSaves’ mandates. These include requirements to:
Timely enroll all eligible employees in the program;
Deduct retirement plan contributions from employees’ paychecks and timely transmit them to the program administrator;
Automatically escalate employees’ deferrals on an annual basis (1% per year, up to 10%);
Keep employee elections on file for at least three years; and
Provide employees with notices regarding the program.
Employees may be automatically enrolled in OregonSaves, but can opt out or elect to contribute to their account in any amount from 1%-100% of their eligible compensation, up to Internal Revenue Service limits. They may also decide whether to automatically escalate their contributions each year. The program offers various investment options and is financed by a program administration fee deducted from employee accounts; no employer contributions are allowed.
Certificate of Exemption
For an employer to avoid application of most of the law’s requirements, it must register with OregonSaves and then file for a certificate of exemption. Filing deadlines are based on an employer’s number of covered employees.
Number of Covered Employees Filing Deadline
100 or more November 15, 2017
50-99 May 15, 2018
20-49 December 15, 2018
10-19 May 15, 2019
5-9 November 15, 2019
4 or fewer May 15, 2020
The ERISA Industry Committee filed a lawsuit against the Oregon Retirement Savings Board earlier this month, alleging that OregonSaves’ registration and certificate of exemption filing requirements violate the Employee Retirement Income Security Act (ERISA). Pending the outcome of that suit, we recommend complying with OregonSaves and seeking a certificate of exemption by the applicable deadline.
If you have any questions about Oregon’s state-run retirement program, or would like assistance complying with OregonSaves’ requirements, please contact a member of our Employee Benefits Practice Group.