OregonSaves vs. 401(k): Which is right for your Oregon business?

The Oregon retirement mandate

Since 2017, Oregon has required every business with at least one employee to either offer a qualified retirement plan or facilitate the state-run OregonSaves program. Employers who don't comply face penalties of $100 per eligible employee, up to $5,000 per year.

If you already sponsor a 401(k), 403(b), SEP IRA, SIMPLE IRA, or other qualified plan, you're exempt from OregonSaves — but you must certify your exemption online. That certificate is valid for three years.

The question most Oregon employers face isn't whether to offer a retirement benefit — it's which one.

Side-by-side comparison

Feature	OregonSaves	401(k) Plan
Plan type	State-facilitated Roth IRA	Employer-sponsored qualified plan
2026 employee contribution limit	$7,500/year	$24,500/year (3.3× more)
Catch-up (age 50+)	$1,100 additional	$8,000 additional
Employer contributions	Not allowed by Oregon law	Matching and profit-sharing available
Tax treatment (employee)	After-tax contributions only (Roth)	Pre-tax, Roth, or both
Tax deduction for employer	None	Employer match is tax-deductible
SECURE 2.0 tax credits	Not eligible	Up to $16,500 over 3 years
Investment options	Limited (State Street target-date + capital preservation)	Full range — employer/advisor selects funds
Participant fees	~0.50%/year + $16/year account fee	Varies by provider (can be employer-paid)
Employer cost	$0 (state-run)	Administration fees apply
Employer fiduciary liability	None	Yes — but can be outsourced to a 3(16) fiduciary
Auto-enrollment	Yes (5% default, employees can opt out)	Optional but qualifies for $500/yr tax credit
Vesting	100% immediate	Employer sets schedule for matching contributions
Loan provisions	Not available	Plan loans available
High-earner eligibility	Income limits apply (MAGI over $153K single / $242K joint ineligible)	No income limits

When OregonSaves makes sense

OregonSaves is a reasonable starting point for very small businesses (1–5 employees) with thin margins and no plans to offer employer matching. It costs the employer nothing, takes minutes to set up, and satisfies the state mandate. For a solo proprietor with a single part-time employee, it's the path of least resistance.

When a 401(k) is the better choice

For most Oregon businesses with 5 or more employees, a 401(k) is a significantly stronger option — and often more affordable than employers expect. Here's why:

Recruiting and retention: Employer matching is the single most valued benefit after health insurance. OregonSaves doesn't allow it. A 401(k) with even a modest 3% match signals investment in your team.

Tax savings for the business: Employer contributions to a 401(k) are tax-deductible. Combined with SECURE 2.0 startup credits (up to $5,000/year) and auto-enrollment credits ($500/year), many Oregon businesses find the tax credits alone offset the cost of administration in the first three years.

Higher contribution limits: Your employees can save $24,500/year in a 401(k) versus $7,500 in OregonSaves. For owners and high earners, that's a critical difference — and one of the top reasons business owners switch.

Income limits don't apply: OregonSaves is a Roth IRA, which means employees earning more than $153,000 (single) or $242,000 (joint) can't contribute at all. A 401(k) has no income limits.

What does a 401(k) actually cost in Oregon?

Less than you'd think. At Independent Retirement, our Starter plan starts at $1,750/year (first 10 participants included) — no asset-based billing to employers, no hidden charges. For a 10-person company, that's about $146/month.

Factor in the SECURE 2.0 tax credits and your plan could effectively cost nothing in the first three years — while giving your team a benefit OregonSaves can't match.