The ERISA Industry Committee sued the Oregon Retirement Savings Board on Thursday, claiming the OregonSaves program imposes reporting requirements on employers that are already covered by federal law.

The lawsuit seeks to rollback and eliminate the rule that mandates employers to apply for a three-year exemption from OregonSaves, a state-run program that provides coverage to employees who are not covered by an employer-sponsored retirement plan.

“Oregon can easily find out which employers in their space don’t offer employer-sponsored retirement plans,” says Annette Guarisco Fildes, president and CEO of ERIC. “The state is shifting their burden onto each individual employer.”

See also: Employer group urges DOL to digitize plan sponsor communications

The employer group argues that the Oregon Retirement Savings Board, which runs the plan, is infringing on or trying to obstruct federal law. If the lawsuit against the board is unsuccessful, ERIC says the rule will bring a compliance burden to employers who operate in areas with state-adopted retirement plans.

Cities like New York and states such as California and Maryland are looking into offering a government-sponsored IRA, and the ruling could affect the plan requirements, says Guarisco Fildes.

“We don’t yet know what the other states will be requiring but we know that several states have adopted state retirement programs,” she says. “They’re writing the rules. An HR department could be forced to figure out how they would be exempt from dozens of programs across the country. It’s confusing and unnecessarily burdensome.”

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