OregonSaves is a retirement savings program sponsored by the state of Oregon, facilitated by employers, and funded by employee investments via payroll deductions. OregonSaves is a Roth IRA with automated enrollment; however, employee participation is completely voluntary. Money in employees’ accounts is 100% vested immediately and portable if they change jobs..
- 5% of employees’ gross pay is withheld and contributed to a Roth IRA
- Roth IRA contributions are made with after-tax dollars (pre-tax contributions are not available)
- Automatic annual 1% increase until savings rate reaches 10%
- Employees’ first $1,000 will be invested in the OregonSaves Capital Preservation Fund
- Savings over $1,000 will be invested in an OregonSaves Target Retirement Fund based on the employee’s age
Employees may opt out of these investment options and choose other State Street funds offered through the OregonSaves website. In addition, employees may change their automatic contribution rate or opt out of the program at any time. IRA contributions limits will apply.
How do businesses register for OregonSaves?
The employer is responsible for registering the business, as well as submitting employee contributions. Employees can create an account linked to their employer to manage their investments. Employers and employees can register at www.oregonsaves.com. The program rolled out in phases, starting with larger employers.
- Employers with 5 or more employees should have already registered prior to 2020
- Employers with 4 or fewer employees must register by January 15, 2021
For new businesses
Any business with employees in Oregon that does not offer an employer-sponsored retirement plan will be required to facilitate the State’s program for its employees. Employers have 60 days from the date of hire to enroll a new employee in OregonSaves or accept their election to opt out of the program.
Do businesses have to use the state-sponsored program?
No. Registering for the OregonSaves program is just one way to fulfill the requirement. Businesses can also establish their own employee retirement plan, such as a 401(k), SEP IRA, or SIMPLE IRA, to satisfy this requirement. You should consider all available options before making a decision.
Benefits of starting your own retirement plan (outside of OregonSaves):
- Larger variety of investment options
- Higher contribution limits with a potential tax deduction for company contributions
- A way to attract and retain quality employees
Considerations for starting your own retirement plan (outside of OregonSaves):
- Potentially higher fees and expenses
- May be required to make a company contribution each year
- Increased employer involvement
Contact a Stifel Financial Advisor to discuss the OregonSaves requirements or to establish a retirement plan for your company.
Stifel does not provide legal or tax advice. You should consult with your legal and tax advisors regarding your particular situation.