March 28, 2018

Settlement provides for some large employers to prove employees are covered without filing with state.

An employee-benefits trade group has settled a lawsuit against OregonSaves, the nation’s first state-sponsored retirement-savings plan, in an agreement that could make big companies less likely to oppose such plans.

The settlement provides a way for some large employers to prove that their employees are already covered under a retirement-savings plan without having to file with the state. The group that brought the suit says it hopes that, with many other states moving to enact retirement-savings plans of their own, the settlement may serve as a model.

Oregon in July started requiring employers that don’t offer a retirement plan of their own to give employees access to a state-run plan. Under this, employees are automatically enrolled in individual retirement accounts invested in mutual funds. (The employees are free to opt out.)

On March 19, Washington state launched a state-run marketplace to help small businesses shop for a retirement-savings plan if they choose to offer one. Seven other states, including California and Illinois, as well as the city of Seattle, are designing retirement savings programs of their own.

In October, the nonprofit ERISA Industry Committee filed a lawsuit against the Oregon Retirement Savings Board, which oversees OregonSaves, in U.S. District Court for the District of Oregon, seeking to do away with a requirement that employers periodically certify that their employees are already covered by a retirement plan—or enroll them in the state’s plan.

The complete article can be accessed here.