Oregon Treasury Seeks to Modify State Retirement Program
The Oregon Treasury has unveiled a proposal to modify the Oregon State Retirement Program (ORSP).
The proposal would create new rules and modify existing rules for the ORSP. Specifically, the rules:
- clarify the definitions in certain joint employment relationships;
- allow for non-payroll contributions from participating employees;
- clarify timing related to contributions;
- allow for dollar-based contributions; and
- provide a delegation of authority to the executive director.
The revisions also update and add new defined terms, and adjust language to clarify existing rules.
The ORSP convened a rules advisory committee to discuss the fiscal impacts of the proposed rules; it agreed that the current structure of the program minimizes costs to small businesses.
The new rule on joint employment, the ORSP says, would only affect businesses with leased or temporary employees. It would refine the definitions in joint employment situations. These refinements were drafted with the assistance of a rule making advisory committee comprised of small business owners and owners of businesses the rules directly affect.
The proposals also adds language containing the following definitions:Employer of Record:
The business associated with the Business Identification Number (BIN) listed on an employee’s or participating employee’s W-2.Non-Payroll Contributions:
Contributions other than payroll deduction contributions, rollover contributions or transfer contributions.Payroll Deduction Contributions:
Contributions made at the election of a participant or pursuant to automatic payroll deduction contribution enrollment, in lieu of cash compensation.Temporary Basis:
Providing workers to a client for special situations such as to cover employee absences, employee leaves, professional skill shortages, seasonal workloads and special assignments and projects with the expectation that the position or positions will be terminated upon completion of the special situation. Workers also are provided on a temporary basis if they are provided as probationary new hires with a reasonable expectation of transitioning to permanent employment with the client and the client uses a pre-established probationary period in its overall employment selection program.Temporary Service Provider:
A person who provides workers, by contract and for a fee, to a client on a temporary basis.Worker Leasing Company:
A person who provides workers, by contract and for a fee, to work for a client but does not include a person who provides workers to a client on a temporary basis.
The proposal adds language stating that if an employee has not established an IRA after notice and an opportunity to opt out has been sent to the employee using the contact information on file with the program, an IRA will be established for such an employee pursuant to directives and procedures the Oregon Retirement Savings Board establishes. And if an employee has 30 days from the enrollment date to select alternate elections for contributions or opt-out of the program. Facilitating employers shall begin payroll deduction contributions for participating employees on the first payroll date after the 30-day period has expired.
The rules also state that employees may participate at an initial contribution rate different from the standard election rate; the minimum contribution rate is 1% and the maximum contribution rate is 100% of available compensation, up to the IRS annual contribution limits. The proposal adds language stating that employees also may participate at an initial contribution rate different from the standard elections, expressed as a specific whole dollar amount. The minimum contribution rate in this case would be $1.00 and maximum contribution rate is 100% of available compensation, up to the IRS annual contribution limit or at an initial contribution rate consistent with the standard elections but without auto-escalation; or at an initial contribution rate different from the standard elections and without auto-escalation.
The proposal also would add language stating that any participating employee may choose to make non-payroll contributions to the program in any uniform and nondiscriminatory manner determined by the board and acceptable to the plan administrator. Such contributions must not exceed, in combination with payroll deduction contributions, the annual IRA contribution limit as determined by the Internal Revenue Code and related rules promulgated by the IRS, and must be delivered to the OregonSaves IRA trustee in accordance with procedures determined by the board and approved by the plan administrator.
The Treasury will hold a public hearing on the proposed rules on Sept. 19 and will accept written comments until close of business on Sept. 22. It plans to finalize the rules in October.