The first of the state-run retirement IRA programs for private sector workers to come online has topped the million-dollar asset threshold.
As of March 1, 362 employers had registered to facilitate OregonSaves for their employees, including 135 that have joined “early,” ahead of their scheduled wave, according to an update from the Oregon Retirement Savings Board (ORSB). Wave 1 opened in October for employers with more than 100 employees, with the second wave slated to open in April for employers with 50-99 workers.
While some employers have only one employee, others have more than 1,000. On average, employees are contributing about $47 per paycheck, according to the report.
As of Dec. 1, 2017, after five months of the pilot phase, the combined savings of 1,162 participating workers was $255,721.99. Opt-out rates for the 5% automatic enrollment program had been running high, however. As of Jan. 24, about 20% of employees had opted out of opening an IRA; the program’s first wave (11 employers) experiences an opt-out rate of 25%, and the second wave — (43 employers, with a total of about 2,500 eligible workers) experienced a 30% opt-out rate as of Dec. 4, according to the OregonSaves Annual Report to the Legislature.
Last October, the ERISA Industry Committee (ERIC) filed a lawsuit in the U.S. District Court for the District of Oregon against the ORSB, claiming that a provision of OregonSaves obstructs ERISA. The complaint requested an injunction against the reporting requirement which OregonSaves imposes on employers that already provide a retirement plan. ERIC argues that ERISA preempts the requirement.
