Oregon’s Private-Sector Retirement Plan Faces First Legal Test

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Carmen Castro-Pagan and Kristen Ricaurte Knebel

Oregon’s retirement savings plan for private-sector employees came under fire Oct. 12 when an employer industry group filed a lawsuit alleging federal law bars certain parts of it ( The ERISA Industry Comm. v. Read , D. Or., No. 3:17-cv-01605, complaint filed 10/12/17 ).

The Employee Retirement Income Security Act expressly preempts the recently enacted Oregon law and its regulations that require employers that sponsor ERISA-governed plans to report on certain plan activities, according to a lawsuit filed in federal court in Oregon by the ERISA Industry Committee.

The program, known as OregonSaves, was launched July 1. It made Oregon the first state to launch a program expanding retirement savings to private-sector workers whose employers don’t sponsor retirement plans.

Oregon went ahead with its program even though the Labor Department revoked rules that changed the definition of an employee pension benefit plan under ERISA. The rules allowed states and cities to require small businesses that don’t provide retirement plans to automatically enroll their workers in the programs. Congress put a stop to these rules with two joint resolutions earlier this year that ultimately killed the rules. President Donald Trump signed both resolutions.

Oregon wouldn’t directly comment on the lawsuit, but Tobias Read, Oregon state treasurer and chair of the OregonSaves program, told Bloomberg BNA in an email that Oregon has worked with companies in the state “to be deliberate to ensure OregonSaves is simple and works well for everybody, because the bottom line is that we want to make it easy to save.”

ERIC has 100 member companies and each has a minimum of 10,000 employees.

Oregon says more than 1 million workers in Oregon don’t have access to a workplace retirement plan. The first pilot program for OregonSaves had 100 participants who saved more than a combined $30,000 by the end of September. The second phase of the pilot program started Oct. 1.

To contact the reporters on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bna.com; Kristen Ricaurte Knebel in Washington at kknebel@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

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