Case of the Week: California and Oregon State-sponsored Retirement Plans

The ERISA consultants at the Retirement Learning Center Resource 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 plans. 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. The advisor asked:

“I have several clients who are California employers. Can you provide an update on the registration requirements for the CalSavers Retirement Savings Program? Are there any deadlines approaching?”

As we reported in a prior Case of the Week, State-sponsored Retirement Plans for Private-sector Workers, to date 12 states 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          Sept. 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 [email protected] 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 Dec. 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.” Oregon 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 [email protected] for assistance.

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

Any information provided is for informational purposes only. It cannot be used for the purposes of avoiding penalties and taxes. Consumers should consult with their tax advisor or attorney regarding their specific situation. 

©2020, Retirement Learning Center, LLC. Used with permission.