The state of Oregon launched OregonSaves in July 2017, providing a simple way to help employees at small businesses save for retirement.
Through OregonSaves, your employees can contribute to a Roth IRA, helping them achieve a brighter financial future once they hit retirement age. Since the retirement account is a Roth IRA, employees who earn more than the designated IRS income limits may not be able to participate in the program.
Do you already offer an employer-sponsored retirement plan? If not, you’ll be required to offer OregonSaves to your employees by May 15, 2020, or earlier, depending on the size of your company.
Employers with five or more employees should have already registered for OregonSaves, and those with four or fewer employees will need to register by May 15, 2020.
Keep in mind that OregonSaves isn’t necessarily the best way to save for retirement. The maximum amount your employees can contribute per year is $6,000, and OregonSaves will not allow you to make an employer match.
So if your employees want to be able to contribute more or you want to match their IRA contributions, you may want to consider offering a traditional employer-sponsored plan.
What are my requirements as an employer?
If you already offer a retirement plan, you don’t need to register for OregonSaves. However, you will need to certify your exemption, which can be done online through the OregonSaves website.
Before registering, you’ll need to know the following information about your business:
- Your federal employer identification number (EIN) or tax identification number
- Your OregonSaves access code, which you’ll receive via email or physical mail sent to your business address (Didn’t receive an access code? Call 844-661-1256)
You’ll also need to know the following about each individual employee:
- Social Security number or individual tax identification number
- First and last name
- Home address
- Phone number
- Email address
Here are the steps to register for OregonSaves:
- Begin the registration process through OregonSaves’ online form.
- Add delegates or payroll representatives, which are employees that will maintain your OregonSaves account. If you will be directly managing your OregonSaves account, you can skip this section.
- Set up a payroll list, which will notify and enroll your employees in OregonSaves. You’ll need to choose a starting payroll date, which must be at least 30 days in the future.
- Add employees to the payroll list. You must add all eligible employees to at least one payroll list, although you are welcome to make several payroll lists to make organization easier, or if you have multiple pay dates and payroll schedules.
- Add your bank account information for the account you’ll use to submit employee contributions, unless you plan to wire funds or mail a check. Your bank must be located in the United States.
- Wait 30 days so your employees can choose to opt out of the program or change their contribution levels, if desired. During this time, you should work with your payroll company to ensure you are ready to make the proper deduction from your employees’ paychecks.
- Send your first employee contributions through your registered bank account, ACH payment, wire, or mailed check. This must be done within seven days of the payroll deductions. Otherwise, you may receive a fine.
- Keep your account up-to-date by processing employee contributions, adding or removing employees, and keeping your payroll software updated regarding the proper contribution amounts.
How much does OregonSaves cost?
OregonSaves is free for you, the employer. Your employees will pay a small cost—about one percent of their assets every year, which covers the program’s administration.
What is the difference between OregonSaves and a traditional retirement savings program?
|Type of plan||Roth IRA||401(k)|
|Can you match your employees’ contributions?||No||Yes|
|2020 contribution limit||$6,000||$19,500, plus employer contributions|
|Pricing||Approximately 1%||Varies depending on plan size and provider|
|Do you have to pay to administer the plan?||No||Often, yes|
|Are employees automatically enrolled upon joining your company?||Yes||Yes|
Why choose a traditional retirement plan over OregonSaves?
While OregonSaves can be a convenient option for employers who wouldn’t otherwise offer a retirement plan, it’s important to also consider the benefits of a traditional model for your employees.
As indicated above, a standard 401(k) allows your team to save much more per year, and it gives you the ability to match employee contributions, which increases the amount your team can save. This flexibility can make your retirement savings benefit more valuable to prospective candidates and current employees, helping with both hiring and retention.
What if my employees have questions about OregonSaves?
If your team has any questions, refer them to the OregonSaves website or have them call (844) 661-6777.
Keep in mind that you aren’t responsible for giving your employees investment advice or encouraging them to enroll in (or not enroll in) the program.