OregonSaves Retirement Plan

Explore the OregonSaves Retirement Plan: its features, benefits, and how it's revolutionizing retirement savings for Oregon residents. Read our insights and get ready to futureproof your retirement strategy today.
Author: Penelope Team
OregonSaves Retirement Plan

OregonSaves is a state-sponsored retirement savings plan that makes it easy for Oregon workers to save for retirement. The program is open to all Oregon workers who are not offered a retirement plan by their employer.

How does the OregonSaves retirement plan work?

The OregonSaves plan, managed by the state of Oregon, is a Roth IRA funded through payroll deductions. Once an employer signs up for the plan, all W-2 employees, including part-time workers, are eligible to participate. 

Employees are automatically enrolled at a default of 5%, meaning that unless employees choose to opt out, they will automatically contribute 5% of their after-tax income to the plan.

Is OregonSaves legally mandatory?

Yes, all employers, no matter how many employees they have (even 1) must facilitate OregonSaves, if they don't already offer a qualified, employer-sponsored retirement plan. Read more about other state-mandated retirement plans.

What are the OregonSaves registration deadlines?

  • Employers with 20 or more employees: December 15, 2018
  • Employers with 10-19 employees: May 15, 2019
  • Employers with 5-9 employees: November 15, 2019
  • Employers with 3-4 employees: March 1, 2023
  • Employers with 1-2 employees: July 31, 2023

What are the downsides of Oregon Saves?

  • OregonSaves is a great retirement plan for many Oregon-based employers, but there are some downsides to consider:
  • OregonSaves is a Roth IRA retirement plan, which has income limits. If you make over a certain amount each year, you will not qualify for the plan. You can visit the IRS website to determine if you qualify. While OregonSaves does offer a Traditional IRA, another option is an employer-sponsored 401(k) plan, which has no income limits. 
  • OregonSaves is not subject to the same worker protections that other tax-qualified retirement savings plans are under ERISA, a federal law that requires fiduciary oversight of retirement plans.
  • Employees don’t receive a tax benefit for their savings in the year they make contributions. OregonSaves only allows after-tax (Roth) contributions. Investment earnings within a Roth IRA are tax-deferred until withdrawn and may eventually be tax-free.
  • Since OregonSaves is an IRA plan, contribution limits are much lower than you get with a 401(k). Even if employees max out their contribution to OregonSaves, they could do better with another retirement plan.
  • OregonSaves doesn’t offer employer matching and/or profit sharing contributions.
  • There are a relatively limited selection of investments, which may not be appropriate for all investors. Typical 401(k) plans offer a much broader range of investment options and often additional resources such as managed accounts and personalized advice.
  • There is no cost to employers to offer OregonSaves; however, employees do pay approximately $1 per year in fees for every $100 in their account, depending on their investments. 

What are the benefits of OregonSaves?

  • OregonSaves makes it easy to save, with automatic payroll contributions to a Roth IRA.
  • The default savings rate is 5% of gross pay and employees are automatically enrolled, so they don’t need to worry about the hassle of signing up.
  • Employees can change the rate they invest at any time.
  • Participation is voluntary. If no action is taken, employees will be auto enrolled.
  • Employees can opt out or back into the program at any time
  • Employee accounts are portable and remain with the worker, even if they change jobs.

Do you still need to offer OregonSaves if your company already offers a 401(k) plan?

No, you do not need to offer OregonSaves if your company already offers a 401(k) plan. OregonSaves is a state-sponsored retirement savings program that is designed to help workers who are not offered a retirement plan by their employer. If your company already offers a 401(k) plan, your employees are already eligible to save for retirement.

You will need to file a Certificate of Exemption. This shows that you offer a qualified retirement plan — 401(k) or 403(k) — to all your employees within 90 days of hiring. As soon as it’s approved your Certificate of Exemption will be valid for three years.

Get a better alternative for OregonSaves Plan

Would you like to offer your employees affordable and straightforward 401(k) retirement plans? Find Out More.

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