OregonSaves Requires Small Employers to Offer Retirement Savings by July 31

OregonSaves is a state-mandated retirement savings program aimed at helping Oregonians save for their future. As part of this initiative the state of Oregon has mandated that small employers (one to three employees) are required to offer their employees access to OregonSaves by July 31, 2023. The deadline for larger employers (three plus employees) in the state has already passed.

Requirement for Small Employers

To ensure widespread access to retirement savings options, the state of Oregon has mandated that small employers participate in OregonSaves by offering their employees access to the program.

The requirement aims to level the playing field for employees of small businesses, who may otherwise lack access to retirement savings benefits.

Obligations for Small Employers

Small employers have several obligations under the OregonSaves program. These include:

1. Employee Notification: Employers must inform their employees about OregonSaves and provide them with information on how to enroll or opt-out of the program.
2. Payroll Deductions: Employers are responsible for setting up payroll deductions to allow employees to contribute a portion of their wages to their individual OregonSaves accounts.
3. Data Reporting: Employers are required to provide information about their employees and their contributions to the program to the state on an ongoing basis.
4. Compliance: Employers must comply with the program’s rules and regulations, including any updates or changes issued by the state.

What if your business already offers another retirement plan?

Employers who sponsor a 401(k) or other qualified retirement plan are not required to participate in OregonSaves, but must certify their exemption online. Exemption certificates are valid for three years from the filing date.

What are the benefits of OregonSaves?

There are no administrative fees charged to employers and plans are funded entirely by employees. For the employee it is also beneficial as all of their contributions are 100% vested, meaning they can take their retirement savings with them if they change jobs.

What are the drawbacks to the OregonSaves program?

While OregonSaves may provide retirement benefits to those who didn’t have them before, it doesn’t allow the individual employee to maximize their retirement savings opportunities. In part because employers cannot match employee contributions and the annual contribution limit of OregonSaves is less than other types of retirement plans. Additionally, individual participants must also pay approximately 0.5% of their account balance in yearly administrative fees.

What Options exist if I want to offer a different retirement plan option for employee?

There exist multiple retirement plan options besides OregonSaves including, but not limited to, 401(k), SEP-IRA, etc.  Our blog post Guidance for Business Owners Selecting a Retirement Plan is a great resource and guide to these options.