Oregon is set to be the first state to roll out a mandatory retirement plan, but the program now faces a legal challenge. The ERISA Industry Committee, or ERIC filed a lawsuit Thursday against the Oregon Retirement Savings Board in a U.S. district court in Oregon, arguing that the plan’s reporting requirement obstructs federal law.
The program, OregonSaves, requires employers who already have retirement plans to file paperwork every three years to qualify for exemption from the state law. ERIC, an advocacy group for large employers on employee benefit public policies, says that ERISA, a federal law, governs reporting on plan activities.
“Oregon is reaching beyond what the federal law allows by imposing a compliance burden on employers who voluntarily provide a retirement plan to their employees,” ERIC President and CEO Annette Guarisco Fildes said.
“This approach not only violates federal law but is counterproductive as it will add unnecessary costs and burdens on employers who are doing exactly what policymakers across the country want them to do—helping their employees save for retirement with an employer-sponsored retirement plan.”
In a comment letter to the Oregon Retirement Savings Board before the plan became law, ERIC urged the board to exempt ERISA-qualified retirement plans from any requirements and that no reporting requirement will be imposed.
Five states have enacted legislation to create state-run retirement plans for employees who don’t have access to workplace plans, including Illinois, California, Oregon, Connecticut and Maryland. Oregon is currently in its second pilot. It has 52 employers, 2,300 eligible employees and $46,000 as of Oct. 6.
Some 2,000 Oregon employers with 100 or more employees will be notified this month of the state’s new mandatory retirement plan, and have until mid-November to register. Contributions start Jan. 1, 2018.
