By Michael White, Trüpp.
What is it?
OregonSaves is a Roth IRA (deductions are not pre-tax) savings program that is required for employers that do not currently offer a qualifying retirement program. Employees are auto-enrolled by their employer in the plan, but are given a 30-day window in which to opt out of the plan. The state Treasury Department is the fiduciary and the plan is administered by Ascensus.
What do employees need to know?
- Employees can opt out of the program at any time, including before the first deductions are made.
- Auto-enrollment is set at 5%, but employees have the option to adjust the deduction higher or lower.
- Employees can choose to withdraw their contributions without a penalty since the deductions were made post-tax. The principal will be tax free, but any earnings are subject to IRS rules and may be taxed.
- This is a portable benefit, meaning your Roth IRA will follow you if you leave or change employers.
- Currently, non-payroll contributions are not allowed, but at some point, this may be an option.
What do employers need to know?
- Employers have a target date to register, based on the size of the company. The schedule can be found here.
- Once employers register, they will receive information from Ascensus regarding when they need to start making payroll deductions. The first wave of employers, these with 100+ employees, are required to register by November 15; they must start making contributions January 1, 2018.
- Employers that already offer a qualifying retirement plan must certify with the state every three years.
- OregonSaves cannot be offered to employees in addition to a company-sponsored retirement plan, and employers are not allowed to stop offering an established plan to participate in OregonSaves.