What is the standard contribution rate?

The standard contribution is 5 percent of your gross income (your total earnings before taxes or deductions are taken out). You can choose to save more, or less, at 1 percent increments.

Will my contribution rate increase automatically?

Yes, your contribution rate increases automatically by 1 percent each year, until it reaches 10 percent, unless you opt out of automatic increases. The increase occurs each year on January 1 for those who made their first contribution on or before July 1 of the prior year.

Why are there automatic contribution increases?

OregonSaves aims to improve access to retirement savings accounts for workers and also improve outcomes when it comes time to retire. A savings rate of 5 percent is a good place to start, but employees may need to save more than 5 percent over time to achieve financial security in retirement. Research shows that people are far more likely to save more if their retirement plan includes automatic increases. That said, you are able to opt out of these increases or simply adjust your contribution rate at any time.

How are my contributions made?

Every pay period, your employer will deduct your contribution from your paycheck, based on your set savings rate, and will send it to your personal Roth IRA account. You can also make your own contributions through your bank account or by check using a paper mail-in form.

What is a Roth IRA?

A Roth Individual Retirement Account (IRA) is a specific type of retirement account that you fund with your after-tax earnings, a percentage of which are deposited into your Roth IRA. Your Roth IRA earns money (interest), and those earnings are automatically added to your contributions. When you retire and start taking money out of your Roth IRA (like you’re paying yourself), there are no taxes. In other words, all the interest that your account earns over the years is tax-free. And that’s a big deal. For more details on Roth IRAs you can visit the Internal Revenue Service (IRS) website.

How is the OregonSaves program different from plans like a 401(k) or an IRA?

OregonSaves is designed to pull together some of the best features of popular employer plans and IRAs. We’re helping to lower barriers like complex administration and high costs that may prevent employers from offering a reliable retirement savings plan on their own to their employees. With OregonSaves, employers just have to facilitate the program–there are no costs and no fiduciary responsibility.

What is a Target Retirement Fund?

A Target Retirement Fund is designed to help manage investment risk and is based on two factors: an investor’s current age and estimated retirement date. This type of fund is comprised of a mix of investments—stocks, bonds, and cash equivalents—that evolve over time to focus on growth for younger investors and to help preserve savings closer to retirement age.

Are employers responsible for telling employees when contributions will auto escalate?

No, leave that to us. OregonSaves will notify participating employees about auto-escalation prior to any increase.

Can employers match employee contributions?

No, OregonSaves does not allow employer contributions. As an employer, your role is limited to facilitating the program for your employees.

Can the State use money from this program to pay for other programs?

No. Employee contributions go directly to their own personal OregonSaves IRA account. Accounts are not accessible to the State for other purposes and are not tied to any other retirement plans offered by the State, including Public Employees Retirement System (PERS).