Oregon Mandates a Retirement Plan
FOR ALL EMPLOYERS
In 2015, Oregon’s state legislature wanted to address Oregonians’ lack of retirement saving. Due to an alarming amount of individuals with no retirement savings, Oregon forged ahead as the first state to create a mandated retirement plan. The plan was crafted with the overall goal of giving Oregonians an easier way to save for retirement.
The legislature passed the Oregon Retirement Security Bill, HB 2960 which laid out guidelines for the Oregon State Treasury to come up with additional plan options and to report back to the legislature to implement. Beyond the guidelines, the Oregon Savings Board had considerable latitude to devise and implement a plan. The board has already devised many of its Oregon Administrative Rules; set up a relationship with a third party administrator; and picked a line of Roth IRA funds from State Street. All that was left was a friendly name for this retirement plan and “OregonSaves” was born.
There was one bump along this journey, one key retirement plan component was initially given a green light by the United States Department of Labor—a provision that would shield employers from ERISA requirements. However, that ruling was rescinded in 2017 causing some consternation. But the Oregon state plan is still moving forward, as are other plans in a handful of other states.
If your employer uses the OregonSaves plan, the mandate allows employee auto-enrollment. This retirement savings plan use is voluntary but employees will be auto-enrolled unless they opt out. The idea is that the extra step to opt out will mean higher participation rates.
Oregon law gives employers two choices, either sponsor a retirement plan, or implement OregonSaves. Whichever compliant plan you choose needs to be registered by your company size date with OregonSaves.
Please note that if you use Cardinal’s 401(k) we will be registering for you.
Cardinal can help!
In keeping with our role as a resource for employers, we have put together some information for you. Learn more about the new mandatory retirement plan requirements.