OregonSaves: Understanding Oregon’s state-mandated retirement savings program

What is OregonSaves?

Launched as a pilot program in 2017, OregonSaves became the nation’s first state-mandated retirement savings program. Designed for Oregonians that did not have access to a workplace-based retirement plan, OregonSaves quickly became the model retirement program for numerous states. Today, nearly 118,000 Oregon workers are enrolled in OregonSaves, with the program now available to businesses with a minimum of one employee.

OregonSaves automatically enrolls employees in the program. Workers have the option to opt-out of participating within 30 days of being added to the program. Upon setup, a default amount of 5% is withheld from an employee’s pay, and workers have the option to change the withheld amount at any time after being enrolled.

Who is eligible for OregonSaves?

Anyone 18 years of age or older who is currently employed in Oregon and has earned income is eligible to participate in OregonSaves. This includes the following:

• Full time employees
• Part-time employees
• Seasonal employees who have worked at least 60 days
• Self-employed individuals
• Employees that currently do not qualify for an employer-based plan

Once an employee starts actively participating in OregonSaves, the retirement account is theirs. This means that the employee can change jobs or even more out of state and continue to contribute to the account if they desire.

What type of retirement savings program is OregonSaves?

The retirement account offered by OregonSaves is a Roth Individual Retirement Account or Roth IRA. Program participants are required to meet eligibility requirements for opening a Roth IRA, which include:

• If single, your Modified Adjusted Gross Income must be under $153,000 for 2023
• If married, your Modified Adjusted Gross Income must be under $228,000 for 2023
• If under the age of 50, you must not exceed annual contributions of $6,500 for 2023
• If over 50, you must not exceed annual contributions of $7,500 for 2023

If an employee does not meet Roth IRA requirements or wishes to contribute more, they have the option to set up their account as a traditional IRA, which does not have an annual earnings limit.

Setting up OregonSaves

All Oregon businesses are legally mandated to register their business online with OregonSaves. The registration process requires you to complete the following:

• Basic company contact information such as company name, DBA, application, business address, mailing address, and telephone number
• Information about your current payroll system. You’ll also have to include pay frequency and your current pay schedule
• How employee contributions will be funded. OregonSaves requires businesses to remit all employee contributions for each pay period. Employers can choose from three options:
  • Bank Account via ACH — with the designated amount pulled automatically from your bank account
  • Paper check
  • ACH Push — though not commonly used, you’ll manually direct the ACH transfer when it’s due

• Payment setup — this is required if you’re using the Bank Account via ACH payment option

• A brief review of payment instructions if using a paper check or ACH Push. The instructions provide a remittance address if mailing a check ,as well as banking information if you’re initiating the ACH transfer from your end.
• Entering employee data. To be eligible for the OregonSaves program, you must provide information for at least one employee, with all employees required to have a valid Social Security number or ITIN number to participate. Other information required includes the employee’s birthday and physical address. You can add all of your employees at once and upload it as a Microsoft Excel file, with instructions available on OregonSaves.com on how to create and upload the file

When the above information is complete, you will receive an Onboarding Complete message. Once onboarding is complete, you’ll have access to the Employer Dashboard, where you can manage current employees, add new employees, and manage and submit employee contributions.

Who is exempt from OregonSaves?

Any employer who currently offers one of the following qualified, employer-sponsored retirement plans is not required to participate in OregonSaves:

• 401(k) – or other 401(a) plan
• 403(a) – qualified annuity plan
• 403(b) – tax-sheltered annuity plan
• 408(k) – Simplified Employee Pension plan
• 408(p) – SIMPLE IRA plan
• 457(b) – governmental deferred compensation plan

If your business is exempt, you’ll have to certify your exemption online — the exemption certificate is valid for three years. This is completed by entering a unique access code provided by the State of Oregon and your employer identification number on the OregonSaves website. During the exemption process, you are required to indicate the reason for the exemption.

What are the fees for participating in OregonSaves?

For employers

Since Oregon businesses merely serve as program facilitators, there are no assessed program fees. In addition, Oregon employers are prohibited from contributing any employer-matching funds to an employee’s savings plan.

For employees

Employees that participate in OregonSaves are required to pay an ongoing fee that equates to $.50 for every $100 saved. There is also an administrative fee of $4 that is assessed each quarter. However, there are no fees for withdrawals unless the withdrawal is before ythe employee reaches the age of 59 1/2.

How do participants opt out of the program?

OregonSaves program participants can opt out of the program at any time by completing the opt-out form available from the OregonSaves website. If employees choose to opt out within the first 30 days after enrollment, no payroll deductions will be made and the account won’t be activated.

Are there penalties assessed for noncompliance?

In Oregon, any business with employees that does not currently offer an employer-sponsored retirement plan is required to register their business with OregonSaves. If a business opts not to register with OregonSaves, the business can be fined up to $100 per affected employee, with a maximum fine of $5,000 assessed annually.

More OregonSaves resources for Oregon employers

For more information on OregonSaves, check out the following resources:

• OregonSaves Program Description
• OregonSaves Employer FAQs
• OregonSaves Employee FAQs
• OregonSaves Opt-Out Form
• Registering Your Company for OregonSaves
• OregonSaves announcement