Most state governments plan to launch state-sponsored retirement saving programs. They are doing this in response to the retirement crisis. Currently, Oregon and Illinois are the leading states. They launched a retirement savings plan in July 2017 and June 2017, respectively. Therefore, employees in Oregon have a new and easy way to save for their retirement at work.
According to the Oregon Treasury, one million employees are likely to benefit from the OregonSaves program. State officials reveal estimates that 64,000 Oregon-based businesses will have workers eligible for the OregonSaves retirement savings plan. Such focus on the small and medium-sized enterprises makes sense. At the national level, few small businesses sponsor any form of retirement plan for their workers. The small businesses account for 64% of the new private sector employment opportunities.
Here is How OregonSaves Works
If your employer is enrolled in OregonSaves, you will get enrolled automatically. This is unless you decide to opt out within 30 days of receipt of the retirement plan materials from your employer. If you are self-employed, you should enroll in the OregonSaves program on your own. By default, your employer will deduct 5% of each of your paychecks. They will contribute the deducted amount to the ROTH IRA in your identity.
Beginning with your first paycheck deduction, you are allowed to change your level of contribution. You can do this in 1% increments and a maximum of 10% yearly. Note that you can only make one change in contribution per month.
Yes, OregonSaves is legally mandatory for employers. All Oregon-based businesses must enroll their workers or file a Certificate of Exemption. This is regardless of whether the employer has employed one worker or hundreds of workers. However, the state of Oregon assigns no fiduciary risk to business owners and employers. Besides, the state does not force the employers to match any specific funds or guarantee any specific investment performance.
The Oregon State Treasury will be monitoring the registration process. It will also reach out to offer technical assistance to employers who have difficulty in completing the registration process or challenges in meeting the registration deadlines.
Which Employees Qualify for OregonSaves?
Any employee in Oregon age 18 years or older who does not have access to any employer-sponsored retirement savings plan is eligible for OregonSaves. Besides, part-time workers and self-employed individuals also qualify to participate the OregonSaves program.
What if Your Company Offers a 401(k)?
If your company already offers a qualified retirement savings plan such as 401(k) to all of your workers, then you no longer need to enroll with OregonSaves. However, you should certify the Oregon State laws regarding the retirement savings plans. You should also complete a certification process to be given a Certificate of Exemption.
Being a new retirement savings plan, OregonSaves might seem a difficult issue to most employers. This is where HKM Employment Attorneys comes in. Employers can schedule a consultation with HKM regarding OregonSaves. Contact us today.