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California and Oregon State-Sponsored Retirement Plans

“I have several clients who are employers based in California and Oregon. Can you provide an update on the registration requirements for the CalSavers and the OregonSaves retirement savings programs? Are there any deadlines approaching?”

ERISA consultants at the Retirement Learning Center (RLC) Resource Desk regularly receive calls from financial advisors on a broad array of technical topics related to IRAs, qualified retirement plans and other types of retirement savings and income plans, including nonqualified plans, stock options, and Social Security and Medicare.  We bring Case of the Week to you to highlight the most relevant topics affecting your business.

A recent call with a financial advisor from California is representative of a common inquiry related to state-sponsored retirement plans for private-sector workers.

As we reported in a prior Case of the Week:  State-sponsored retirement plans for private-sector workers, to date 12 states and one city have enacted laws that, generally, require certain employers without their own retirement plans to make the state-sponsored plan available to their employees. Each state has different rules so it is imperative to confer with state authorities and reference state websites for guidance. Note that some of the states’ plans have an employer registration requirement that is time sensitive. California and Oregon are examples of two such states.

California
CalSavers
 is a retirement savings program for private sector workers in California whose employers do not offer a retirement plan. Employers with five or more employees must participate in CalSavers if they do not already have a workplace retirement plan. Employers that do sponsor their own retirement plan must register their exemption from the state mandate. The following deadlines to register or claim an exemption are based on the size of the business.

Size of Business                 Deadline

Over 100 employees           September 30, 2020 (but see potential for year-end extension)[1]

Over 50 employees             June 30, 2021

5 or more employees          June 30, 2022

To register, visit www.CalSavers.com, call CalSavers Client Services at 855-650-6916 or email them at Clientservices@calsavers.com to certify an exemption. For businesses that missed the deadline and need to get caught up, please engage with the CalSavers support team immediately as they want to help. There is unofficial word that the deadline for registering as a California exempt employer has been extended to December 29, 2020. 

Oregon

Oregon has a similar employer registration requirement for its state-sponsored retirement program covering private sector workers− OregonSaves. Businesses with employees that do not offer a qualified retirement plan and are currently issuing payroll are required to implement the OregonSaves program. Most of the deadlines for registration/exemption have passed[2], but the state has indicated that its expectation at this time, given the impact of Covid-19, is for business owners to facilitate the program “as soon as you are reasonably able to do so.” Oregonian employers that sponsor a qualified retirement plan don’t have to participate in the program but must certify their exemption and renew it every three years.

Businesses can register or certify their exemption online at www.oregonsaves.com. Alternatively, they can contact the OregonSaves Client Service Team by phone at (844) 661-1256 or by email at clientservices@oregonsaves.com for assistance.

For information on state-sponsored retirement savings plans, please refer to the table below.

State/City Plan Name
1.    California California Secure Choice Retirement Savings Program
2.    Colorado Colorado Secure Savings Program
3.    Connecticut Connecticut Retirement Security Program
4.    Illinois Illinois Secure Choice Savings Program
5.    Maryland Maryland Small Business Retirement Savings Program
6.    Massachusetts Massachusetts Defined Contribution CORE Plan

 

7.    New Jersey New Jersey Small Business Retirement Marketplace

 

8.    New Mexico The New Mexico Work and Save Act

 

9.    New York New York State Secure Choice Savings Program
10. Oregon OregonSaves

 

11. Vermont Vermont Green Mountain Secure Retirement Plan

 

12. Washington Washington’s Small Business Retirement Marketplace

 

13. Seattle, WA Seattle Retirement Savings Plan

 

 

[1] Employers who missed this deadline should contact CalSavers and register as soon as possible to avoid penalties. There is unofficial word that the deadline for registering as a California exempt employer has been extended to December 29, 2020.

[2] Oregonian businesses with four or fewer employees have until January 15, 2021, to register or record their exemption.

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State-sponsored retirement plans for private-sector workers

“Which states, if any, have enacted or proposed legislation that would enable them to offer retirement savings programs to private-sector workers?”

ERISA consultants at the Retirement Learning Center (RLC) Resource Desk regularly receive calls from financial advisors on a broad array of technical topics related to IRAs, qualified retirement plans and other types of retirement savings and income plans, including nonqualified plans, stock options, and Social Security and Medicare.  We bring Case of the Week to you to highlight the most relevant topics affecting your business.

A recent call with a financial advisor from Illinois is representative of a common inquiry related to states and retirement plans.

Highlights of the Discussion

As of October 6, 2020, 12 states have succeeded in enacting laws creating retirement savings programs for private-sector workers. [1] One city—Seattle, WA—has also enacted an auto IRA program.[2] The following represents a high-level overview of the various plans.

State/City Plan Name Type of Plan
1.     California California Secure Choice Retirement Savings Program Automatic Roth IRA
2.     Colorado Colorado Secure Savings Program Automatic Traditional IRA
3.     Connecticut Connecticut Retirement Security Program Automatic Traditional or Roth IRA
4.     Illinois Illinois Secure Choice Savings Program Automatic Roth IRA
5.     Maryland Maryland Small Business Retirement Savings Program Automatic Traditional IRA
6.     Massachusetts Massachusetts Defined Contribution CORE Plan

 

A multiple employer plan that is a pre-tax and post-tax 401(k) savings plan developed for employees of eligible small nonprofit organizations.
7.     New Jersey New Jersey Small Business Retirement Marketplace

 

A marketplace for diverse retirement plans, including, at least, life insurance plans, Savings Incentive Match Plans for Employees (SIMPLE) IRAs and payroll-deduction IRAs.
8.     New Mexico The New Mexico Work and Save Act

 

Voluntary Payroll Deduction Roth IRA
9.     New York New York State Secure Choice Savings Program Voluntary Payroll Deduction Roth IRA
10.  Oregon OregonSaves

 

Automatic Roth IRA
11.  Vermont Vermont Green Mountain Secure Retirement Plan

 

A multiple employer plan that is a tax-deferred, pre-tax 401(k) savings plan with optional future employer contributions
12.  Washington Washington’s Small Business Retirement Marketplace

 

A marketplace where qualified financial services firms offer low-cost retirement savings plans to businesses and individuals
13.  Seattle, WA Seattle Retirement Savings Plan

 

Automatic Traditional or Roth IRA

Additionally, another 21 states have introduced legislation on this topic that is still under consideration. Those states include: Arizona, Georgia, Iowa, Indiana, Kentucky, Louisiana, Maine, Michigan, Minnesota, New Hampshire, Nebraska,  North Carolina, North Dakota, Ohio, Pennsylvania, Rhode Island, South Carolina, Utah, Virginia, West Virginia and Wisconsin.

For additional information, please see State-Administered IRA Programs: Overview and Considerations for Congress from the Congressional Research Service.

Conclusion

Concerned with the retirement security of their workers, some state legislatures have enacted laws that create state-sponsored retirement savings plans for private-sector workers. Many other states are considering similar action. The industry can expect more activity in this area in the coming months.

 

[1] AARP Public Policy Institute, State Retirement Savings Resource Center, October 2020

[2] Chapter 14.36, Seattle Retirement Savings Program

 

 

© Copyright 2021 Retirement Learning Center, all rights reserved