Oregon Will Pursue State Plan Despite Impending Safe Harbor Repeal
Oregon Treasurer Tobias Read has expressed determination
to continue pursuing OregonSaves, the state-run auto-IRA program for private sector workers, regardless of the U.S. Senate’s May 3 passage
of H.J. Res. 66
, a measure that — if President Trump signs the measure, which he is expected to do — will cancel the safe harbor the Obama administration put in place in 2016 exempting states’ auto-IRA programs from ERISA.
Likely Federal Rollback
H.J. Res. 66 was pursued under the Congressional Review Act (CRA), which allows Congress to consider and pass legislation to overturn any significant regulation if the president ultimately signs the legislation. The DOL's state plan rule — which was finalized in August 2016 and became effective in October 2016 — fell within the time limit allowing its repeal through the CRA.
But even if President Trump signs H.J. Res. 66 into law, OregonSaves still will exist. While the elimination of the safe harbor’s provisions removes certain guideline protections for these programs, it does not forbid states from pursuing them, as long as they stay within ERISA’s boundaries.
In April, the Oregon Retirement Savings Board approved the final rules
that will govern the operation of the program. Under the program — which will enter a test phase on July 1 — starting Nov. 15, 2017, Oregon employers with 100 or more employees must begin to register with the program, either certifying that they already offer their workers access to a qualified retirement plan or automatically enrolling them into OregonSaves.
The program will then be further phased in based upon employer size so that by May 15, 2020, all employers that either employ one or more individuals 18 years or older for 18 separate weeks during the year, or whose quarterly payroll is $1,000 or more, will have to register with the program. Employers that do not obtain a certificate of exemption must automatically enroll all of their employees into OregonSaves within 60 days of when the employer registers for the program.
Full Steam Ahead
As soon as the Senate adopted H.J. Res. 66, Read — who also is the chair of the Oregon Retirement Savings board, which is guiding the development of OregonSaves — issued a statement quelling any question about how his state would proceed.
Said Read in a press release, “In Oregon, OregonSaves will continue to move forward with our pilot program that is launching on July 1 this year. The need to address the oncoming retirement crisis is too great. This action will not halt our commitment to working Oregonians.”
Read also has invited
Vice President Michael Pence and members of the Senate to visit Oregon to learn about the program firsthand. “Here in Oregon, businesses and workers are lining up to facilitate and participate in OregonSaves,” he said in the letter he sent
on May 2. He also said that so far 40 Oregon businesses have signed up so far to participate in the pilot launch.