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On April 18, the Oregon Retirement Savings Board adopted final rules to implement the Oregon Retirement Savings Program (known as "OregonSaves") codified at 170-090-0001 et seq. OregonSaves establishes a state-sponsored payroll deduction retirement savings plan requiring Oregon employers that do not offer retirement plans to their employees to make payroll deductions from their workers' wages into the state's program.
Despite these final rules, OregonSaves' future still remains uncertain due to the Trump administration's likely rollback of state savings arrangements.
OregonSaves is intended to be construed in a manner consistent with the applicable guidance provided by the U.S. Department of Labor ("DOL") during the Obama administration relating to payroll deduction IRA programs that are not pension plans under ERISA, including but not limited to, 29 CFR§ 2509.99-1 and 29 CFR § 2510.3-2(d).
However, the U.S. Senate recently passed H.J. Res 66, blocking the DOL's rule allowing for these state-level automatic enrollment savings programs. President Trump is expected to sign H.J. Res 66, meaning that any state savings programs would be required to comply with ERISA provisions. Thus, their future enforceability is uncertain.
If the plan in Oregon remains, it will begin rolling out on July 1, with a pilot group of employers.
Employers must either register with the program or file a certificate of exemption by the following deadlines:
Within 60 days after an employer's registration deadline, it must enroll its participating employees by providing the following information:
Employees who do not opt out or specify a particular contribution rate will be enrolled using a Standard Election of 5 percent of their compensation, with auto-escalation at the rate of an additional 1 percent of their compensation each year, until a maximum of 10 percent is reached.
Oregon employers play a limited role under OregonSaves, consisting of:
Below are recommendations for employers to follow to demonstrate neutrality with respect to an IRA sponsor, consistent with the DOL's guidance:
Employers will want to keep apprised of the Trump administration's likely rollback of the mandatory savings program statutes.
Cody Emily Schvaneveldt is an attorney with Littler in Portland, Ore. © Littler. All rights reserved. Reposted with permission.
Related SHRM Article:
Senate Halts Rule on State-Run IRAs for Small Businesses,
SHRM Online Benefits, May 2017
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