The ERISA Industry Committee, a trade association thatrepresents the interests of large employers that sponsor retirementand health plans, is suing Oregon’s treasurer over a reportingrequirement under the state’s newly minted mandatory retirement plan.

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The Oregon Saves program will ultimately requireall employers in the Beaver State to either offer a workplaceretirement savings plan, or automatically enroll workers in astate-administered IRA.

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In its lawsuit, ERIC is not seeking an injunction against theentire rule, but rather is asking a federal court to scrub aprovision of the Oregon Saves program that requires employers thatalready offer a qualified retirement plan to file for a certificateof exemption from the state.

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Oregon’s law was passed in 2015. The state began implementing itthis past July, in spite of the fact that Congress passed a resolution rolling back an Obama-era safeharbor that would have made it easier for states to mandateenrollment in retirement savings programs.

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Employers that don’t register for a certificate of exemptionwill have to enroll employees in the Oregon Saves program.According to ERIC’s lawsuit, many of the association’s membersoperate in Oregon and employ more than 100 workers in the state. OnNovember 15, employers with 100 or more employees will be requiredto comply with the new law.

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The Employee Retirement Income Security Act, the federal statutegoverning the retirement plans that ERIC’s members offer, has aspecific preemption provision: ERISA “shall supersede any and allstate laws insofar as they may now or hereafter relate to any ERISAplan,” according to the lawsuit.

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Under Oregon’s law, sponsors of ERISA plans will have tocontinually monitor the status of the employees in the state, andreapply for a certificate of exemption every three years.

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That reporting requirement is illegal, ERIC argues, because itbreaches ERISA’s preemptive power.

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“Oregon is reaching beyond what the federal law allows byimposing a compliance burden on employers who voluntarily provide aretirement plan to their employees,” said Annette Guarisco Fildes,president and CEO, ERIC, in a press release.

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“This approach not only violates federal law but iscounterproductive as it will add unnecessary costs and burdens onemployers who are doing exactly what policymakers across thecountry want them to do – helping their employees save forretirement with an employer-sponsored retirement plan,” addedGuarisco Fildes.

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Whether or not Oregon’s reporting requirement would beburdensome to large employers with considerable resources isirrelevant, according to the lawsuit.

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“The relative burden of this reporting obligation does notmatter for preemption purposes, because ERISA’s preemptionprovision seeks to protect ERISA plan sponsors from the burdens ofcomplying with a multiplicity of varying state regulatoryrequirements,” the lawsuit says.

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.