Oregon has enacted legislation (Senate Bills 164 and 165) enforcing its state-run retirement program. The laws take effect Jan. 1, 2020.
Background:
In 2017, Oregon created OregonSaves, a state-based payroll withholding savings program using Roth (post-tax) individual retirement accounts (IRAs). All employers must register with the program or certify that they are exempt (because they already offer a qualifying employer-sponsored retirement plan).
Under current law, covered employers must:
- Register for OregonSaves by the required deadline (based on employer size):
- Enroll current employees in OregonSaves within 60 days of the deadline, and enroll new hires within 60 days of their start date;
- Deduct employee contributions and remit them to OregonSaves; and
- Keep records of the above actions.
Currently, Oregon employers can prove they are exempt from OregonSaves by:
Senate Bill 164:
Senate Bill 164 establishes the following enforcement process for the OregonSaves program:
- An employee may file a complaint with the Oregon Commissioner of the Bureau of Labor and Industries. The employee may not file the complaint earlier than two years following the date by which an employer is required to register with the plan.
- If the employer fails to comply after three attempts by the Oregon Retirement Savings Board (ORSB) to bring the employer into compliance, the ORSB may request an investigation from the Commissioner.
- If an employer is found to have engaged in an unlawful practice under the Act, the Commissioner may impose civil penalties up to $100 per employee who is eligible to participate in OregonSaves, not to exceed a total of $5000 in a year.
Senate Bill 165:
Effective January 1, 2020, employers must indicate on their annual state tax withholding return whether they offer a qualified retirement plan.
Compliance Recommendations
Oregon employers should review their retirement programs as well as their policies and procedures to ensure compliance under Senate Bills 164 and 165.
Please contact your dedicated service professional with any questions.