What is OregonSaves? Everything You Need to Know

State-run IRAs are helping employees close the retirement gap. Learn about OregonSaves, a state-run retirement plan.

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In a previous article about state-mandated retirement plans, we discussed America’s burgeoning retirement crisis, which is no exaggeration. As noted in an article published by the LA Times, “The retirement crisis is real and frightening.”

This dire predicament stems (at least partly) from stagnant wage growth — which makes it harder for workers to save for retirement — plus the need for more retirement plans sponsored by small employers.

To help thwart the brewing crisis, a growing number of states are implementing their own retirement programs for private-sector employees. OregonSaves is one such program.

What is OregonSaves?

OregonSaves is a Roth IRA retirement savings initiative sponsored by the state of Oregon. The program is available to Oregon-based private sector employers who do not offer a company-sponsored retirement plan. OregonSaves is also accessible to self-employed residents. Self-employed people can sign up for the program directly through the OregonSaves website.

From an employer-employee perspective, OregonSaves operates as an automatic-enrollment payroll-deduction IRA, also called “auto-IRA.”

Note that OregonSaves began July 1, 2017, as a pilot program, and was officially rolled out Oct. 15, 2017. Further, Oregon is the first state to launch a state-run auto-IRA program for private-sector employees. Many states have since followed Oregon’s lead — including Illinois, California, and Maryland — by developing similar auto-IRA programs.

How does OregonSaves work for employers?

Oregon employers who do not offer a company-sponsored retirement plan, such as a 401(k) or SIMPLE IRA, must enroll their employees in OregonSaves by the state-mandated deadline (see chart below).


If your deadline has passed, you may still be able to enroll by contacting the OregonSaves Client Service team.

Per the OregonSaves website, the program will notify employers when it’s time to register their business. To begin registration, employers must have either their Federal Employer Identification (EIN) or Tax Identification Number (TIN) plus the access code supplied in the notification. If you’re already providing a company-sponsored retirement plan, but still received a notification, you must certify your exemption from the program.

If you’re not exempt from OregonSaves:

  • Enroll your current employees within 60 days after the registration deadline, and new employees within 60 days of their hire date. You do not need to enroll new hires who work fewer than 60 days
  • Make payroll deductions from participating employees’ wages
  • Remit payroll deductions to the OregonSaves program
  • Maintain related administrative records

If you do not want to participate in OregonSaves, you must set up a qualified company-sponsored retirement plan by the OregonSaves registration deadline.

Is OregonSaves mandatory?

OregonSaves is mandatory only for employers that do not offer a qualified retirement plan. The program is completely voluntary for employees.

After you enroll your employees in the program, the state will inform your employees about their automatic enrollment. Thereafter, your employees have 30 days to opt out of the program. If they do not opt out, their account will be activated and they will be subject to automatic after-tax payroll deductions, which will be deposited into their Roth IRA account. If they choose to opt out after their payroll deductions have started, you must cease the deductions “as soon as administratively possible.”

How to opt out of OregonSaves

Employees can opt out at any time by:

  1. Notifying their employer
  2. Calling the program’s Client Service team
  3. Visiting saver.oregonsaves.com
  4. Mailing a completed Employee Opt Out Form to the address included on the form

They can also opt back in whenever they want.

Key features of OregonSaves

  • The default contribution is 5% of gross pay
  • Employees can choose to contribute more or less than 5% of their gross pay, up to the maximum allowed for a Roth IRA
  • Employees’ contributions will automatically increase by 1% per year, until the savings rate reaches the limit of 10%
  • Employees’ initial $1,000 in savings will be invested in the OregonSaves Capital Preservation Fund
  • Employees’ savings over $1,000 will be invested (based on age) in the OregonSaves Target Retirement Fund
  • OregonSaves does not have a vesting period; contributions and earnings are 100% vested at all times
  • Employers do not have to make matching contributions

Who pays for OregonSaves?

Funded entirely by employee savings, OregonSaves is free for employers. Specifically, a 1% fee is levied per year on employees’ assets being managed under the program. So, each employee can expect to pay around $1 in fees for every $100 in their Roth IRA. This fee covers all expenses associated with plan administration, investment operations, and retaining a trustee/custodian.

Does OregonSaves have W-2 requirements?

There are no Form W-2 requirements for state-run auto-IRA payroll deductions. This means employee contributions should not be included in employees’ W-2s. However, the IRA trustee must file Form 5498 (to report employee contributions) with the IRS and send a copy annually to employees by May 31. Employees do not need to file Form 5498 with their tax return. The copy is simply for their records. As the employer, you must keep all records pertaining to OregonSaves for at least 3 years.

OregonSaves penalties

On May 22, 2019, Oregon Gov. Kate Brown signed SB164 into law. SB 164 establishes civil penalties against employers who fail to obey the rules of OregonSaves or fail to provide their employees with access to a retirement plan by the OregonSaves registration deadline. The fine is $100 per affected employee, up to a maximum of $5,000 per calendar year. SB 164 takes effect Jan. 1, 2020.

Remember, you can select either OregonSaves or a private-market plan as your small-business retirement savings vehicle. So long as the plan is properly designed, implemented, and maintained, it will be in compliance.

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