On March 28, 2018, the ERISA Industry Committee (ERIC) settled its lawsuit against the Oregon Retirement Savings Board (ORSB). The lawsuit, filed in 2017, and now dismissed by ERIC claimed that the process for exempting large employers from OregonSaves violated the Employee Retirement Income Security Act of 1974 (ERISA).
Cohen Milstein acted as Outside Counsel to the OSRB, defending OregonSaves from ERISA challenges.
In July 2017, Oregon became the first state in the nation to implement a defined contribution savings program for private sector employees who either work for companies that don’t offer a retirement plan or aren’t eligible to participate in their employer’s retirement plan, called OregonSaves.
OregonSaves, which completed a pilot phase in 2017 and began rolling out statewide in January 2018, will ultimately provide an option to save to the estimated 1 million Oregon workers who don’t have access to an employer-directed plan. In just a few months, the first 8,734 workers registered in the initial waves of OregonSaves have collectively set aside almost $2 million and average about $100 in savings per month. Most of these workers had not saved for their retirement before.
In October 2017, ERIC, a national group representing employers with 10,000 or more employees, that sponsor health, retirement, and compensation benefit plans governed by ERISA, filed a lawsuit against Treasurer, Tobias Read, a member of the OSRB, arguing that the OregonSaves process for exempting employers is preempted by ERISA.
Cohen Milstein helped negotiate the settlement between the ORSB and ERIC, which resulted in the following joint negotiated statement:
“As a result of a settlement with Oregon, ERIC dismissed its lawsuit against the Oregon Retirement Savings Board. Under the terms of the settlement, ERIC members may inform the State, if it asks, that they are ERIC members, and the State will verify their membership with ERIC to confirm their exemption from OregonSaves. In the meantime, ERIC will continue to work with the appropriate federal regulatory agencies to seek changes to existing reporting forms required under ERISA that can provide Oregon and other states the information they desire.”
In resolving their dispute, ERIC gave OregonSaves a strong statement of support, noting that “ERIC’s injunction request was only against this employer reporting requirement, and not the OregonSaves program.” The release acknowledged the important void that the program fills for individuals who don’t have access to an employer-provided retirement plan.