Employer Law Update: Retirement Plan


Details on Penalties for not having an employee retirement plan in place

RECAP: On November 15, 2017, the OregonSaves plan  came into being mandating that all Oregon employers offer access to an employment retirement savings plan to all employees. Oregon employers are required to implement a state-run savings plan called OregonSaves if they do not offer their own employer-sponsored retirement plan.

IMPLEMENTATION DEADLINE: The deadline for compliance with this law is determined by the number of employees a company has:

Number of employees Your deadline to have plan  
20-49 Employees Dec 15,2018
10-19 Employees May 15,2019
5-9 Employees Nov 15,2019
1-4 Employees May 15, 2020

LEGAL UPDATES ON PENALTIES FOR NON-COMPLIANCE: SB 165 bill directs employers to indicate on annual state tax withholding returns whether they offer a qualified retirement plan that would allow them to be exempt from participation in OregonSaves. It also allows the Oregon Department of Revenue to share collected information with the State Treasurer. This bill applies to tax returns submitted on or after Jan. 1, 2020.

SB 164  makes it illegal for employers not to comply with the requirements of OregonSaves law.

The bill does outline the process by which an employer can obtain an exemption from offering the state plan if  the employer  offers  a qualified  retirement  plan, including 401(k)s, 403(b)s, 457(b)s, and other plans established under Internal Revenue Code Sections 401(a), 408(k), and 408(p). If your business already offers a qualified plan, such as a 401(k) to all of your employees, then you don’t need to implement the state-run OregonSaves plan. However, you are required to certify the plan you do offer with the State of Oregon and complete a  certification process to receive the Certificate of Exemption.

VIOLATION PROTOCOL: The bill requires the Oregon Bureau of Labor and Industries (BOLI) to investigate an employee complaint or an investigation request from the Oregon Retirement Savings Board and authorizes BOLI to assess a civil penalty against any employer for an unlawful employment practice if a violation was found. It then requires BOLI to inform the board of any findings regarding the employer’s non-compliance and to include these findings in its annual report (the company is then cited in a record that is made public).

THE PENALTY: If an employer is found to have been in violation—has not complied with the rules of the program or their employees still do not have access to a retirement plan in which they can participate by the above deadline, the commissioner is authorized to assess a civil penalty of up to $100 for each employee of who is eligible to participate in OregonSaves, up to $5,000 per year.

CARDINAL HAS YOUR SOLUTION! OregonSaves utilizes a Roth and traditional IRA. Cardinal offers a 401(k). If you compare the funds, fees, contribution limits, and options you can provide your employees, a 401(k) is a superior product. Cardinal has a 401(k) plan designed to drive down employee and employer costs by giving you access to a plan of a similar scale as large employers.  Being that we are Cardinal, we offer you two options, Nest Eggs and Golden Eggs. Nest Eggs is free to you if you run your payroll through Cardinal! That’s right! Our 401(k) plan is offered to you at no additional charge—enrolling your employees and obtaining the Oregon exempt certification is handled by us! It’s an easy, quickly-done, no hassle way to get compliant fast!

Our deluxe 401(k) version, called Golden Eggs, offers more bells and whistles—which turns a solid retirement plan into an impressive benefit that will help you retain and recruit great employees! Call (800) 342-4742 and ask for a Cardinal Business Solutions Manager to get the details!

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