OregonSaves: New Path or Dead End?
Oregon is rolling out its state-run retirement plan for the private sector. Based on publications recently issued by Oregon, the purpose of this program is to encourage and facilitate retirement savings for workers without access to an employer-sponsored retirement savings plan. This program, referred to as the Oregon Retirement Savings Plan or OregonSaves, requires employers with employees in Oregon to comply with the recently published rules. These rules create new compliance obligations for employers to include enrolling participating employees, implementing elections into the employer’s payroll system, remitting contributions to the plan administrator, retaining records and providing certain communications about the program and accounts to the participants. Employers subject to the law that do not currently offer a qualified retirement plan to its employees must register by the applicable deadline as follows:
|Number of Employees||Registration Date|
|100 & Over||November 15, 2017|
|50-99||May 15, 2018|
|20-49||December 15, 2018|
|10-19||May 15, 2019|
|5-9||November 15, 2019|
|Under 5||May 15, 2020|
Employers that already offer a qualified retirement plan to their employees are not off the hook entirely. Under Oregon law, an employer must certify (prior to the applicable date above) that it offers an employer-sponsored retirement plan to obtain an exemption from participating in OregonSaves. Under Oregon law, employers must renew the exemption every three years. Employers that fail to file for and obtain a valid exemption are subject to the rules established under Oregon law. An employer that fails to comply with these new rules may be in violation of Oregon’s wage and hour requirements. Oregon may impose penalties for such deduction violations.
However, on October 12, 2017 the ERISA Industry Committee (ERIC) filed a lawsuit in the U.S. District Court for Oregon seeking a declaration and injunction on the basis that the certification process under OregonSaves is preempted by ERISA. In its complaint, ERIC seeks relief from the compliance requirements under Oregon law, even for employers that are eligible for an exemption from OregonSaves. If the Court grants the relief sought by ERIC, the outcome could impact ongoing efforts to impose state law compliance requirements on private employers through state-run retirement plans in California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, Vermont, and Washington.
We will continue to monitor this developing area of law and the potential compliance requirements for private employers through state-run retirement plans.