Launched in 2017, OregonSaves was the first state-based retirement savings program in the country. Now, it has more than $100 million in assets. Even the smallest businesses are required to facilitate OregonSaves if they don’t offer an employer-sponsored retirement plan. In fact, the deadline for employers with four or fewer employees is targeted for 2022. If you’re wondering whether OregonSaves is the best choice for your employees, read on for answers to frequently asked questions.

1. Do I have to offer my employees OregonSaves?

No. Oregon laws require businesses to offer retirement benefits, but you don’t have to elect OregonSaves. If you provide a 401(k) plan (or another type of employer-sponsored retirement program), you may request an exemption.

2. What is OregonSaves?

OregonSaves is a Payroll Deduction IRA program—also known as an “Auto IRA” plan. Under an Auto IRA plan, you must automatically enroll your employees into the program. Specifically, the Oregon plan requires employers to automatically enroll employees at a 5% deferral rate with automatic, annual 1% increases until their savings rate reaches 10%. All contributions are invested into a Roth IRA.

As an eligible employer, you must facilitate the program, set up the payroll deduction process, and send the contributions to OregonSaves. The first $1,000 of an employee’s contributions will be invested in the OregonSaves Capital Preservation Fund, and savings over $1,000 will be invested in an OregonSaves Target Retirement Fund based on age. Employees retain control over their Roth IRA and can customize their account by selecting their own contribution rate and investments—or by opting out altogether. (They can also opt out of the annual increases.)

3. Why should I consider OregonSaves?

OregonSaves is a simple, straightforward way to help your employees save for retirement. Brought to you by Oregon State Treasury, the program is overseen by the Oregon Retirement Savings Board and administered by a program service provider. As an employer, your role is limited and there are no fees to provide OregonSaves to your employees.

4. Are there any downsides to OregonSaves?

Yes, there are factors that may may make OregonSaves less appealing than other retirement plans. Here are some important considerations:

5. Why should I consider a 401(k) plan instead of OregonSaves?

For many employers —even very small businesses—a 401(k) plan may be a more attractive option for a variety of reasons. As an employer, you have greater flexibility and control over your plan service provider, investments, and features so you can tailor the plan that best meets your company’s needs and objectives. Plus, you can benefit from:

With a 401(k) plan, your employees may also likely have greater:

6. What action should I take now?

If you decide that OregonSaves is most appropriate for your company, visit the website to register.

If you decide to explore your retirement plan alternatives, talk to Betterment. We can help you get your plan up and running fast—and make ongoing plan administration a breeze. Plus, our fees are well below industry average. That can mean more value for your company—and more savings for your employees. Get started now.

Betterment is not a tax advisor, and the information contained in this article is for informational purposes only. 

Want a better 401(k)?

Get started

Original source: