OregonSaves: An Employer’s Guide
What is OregonSaves?
OregonSaves is a state-run program, established in 2017, designed to give all Oregonians access to a retirement saves plan. Research shows that people are 15 times more likely to save for retirement if they have the option to have funds withheld from their paycheck automatically. OregonSaves has partnered with Vestwell to administer this plan and allow employers to offer this benefit to their employees.
Mandatory Action for Employers
All Oregon employers are required to register by July 31, 2023.
You must either:
Register and offer this plan to your employees
OR
You may certify an exemption if you offer another qualified retirement plan such as a SIMPLE or 401k.
Start the process here: Oregon Saves Employer
Or Call the Employer Assistance Hotline at (844) 661-1256
Is this the right plan for My business? Here are some details to consider:
The plan is a ROTH IRA, which means deferrals are post-tax contributions. So wages deferred are taxable in the year earned, but not taxable when you distribute the funds later (including the growth).
Employers are not required or allowed to make matching or profit-sharing contributions. Only employee funds are contributed.
You must setup your account and decide how you want the funds invested so that you get the maximum growth. There are several mutual funds to choose from, including Target Date Funds, Growth Funds and a Capital Preservation Fund.
When a business signs up, the default is for each employee to be automatically enrolled and have a 5% deferral rate. They must opt-out if they do not want to participate. The deferral rates are scheduled to increase each year automatically, unless you opt-out. This means employees need to pay attention and control the settings on their accounts. Employees can opt-in or out as frequently as they want, but must coordinate with employers to make sure payroll is processed correctly.
Finally, there is no tricky vesting schedule. The money deferred from the employees pay belongs to them immediately. He/she can take the account with them to another employer or another investment advisor.
Fees for the account are paid by the employee, not the employer
What are my employer responsibilities to maintain the plan:
As an employer, there are no fees.
Your responsibility is to administer the plan. You will need to make sure employees are enrolled and your payroll processing is setup correctly, along with ensuring that employee contributions are made in a timely manner. Many payroll companies handle the remittance of contributions; but make sure. Failure to submit the funds on behalf of your employees can result in large penalties.