A Smarter Way to Build Benefits in Oregon
If you own a small business in Oregon, you’ve probably heard about the OregonSaves retirement mandate. It requires every employer with at least one employee to either offer the state’s IRA program or set up their own retirement plan.
For many business owners we work with, this rule ends up being the push they needed to explore a 401(k). Once they see how flexible and tax-efficient these plans can be for both them and their team, they rarely look back.
A well-designed 401(k) can do much more than just keep you compliant. It can attract and retain top talent, reduce taxes, and help your employees build real financial confidence.
Why 401(k) Plans Are Often Better Than OregonSaves
OregonSaves is a solid starting point, but it’s essentially a Roth IRA funded through payroll deductions. Contributions are capped at just $7,000 in 2025, and employers can’t match or make contributions.
A 401(k) changes the game. It allows for:
- Much higher limits – up to $23,000 in 2025 (plus catch-up for those 50+)
- Employer matching and profit-sharing
- Tax deductions for the business
- Custom plan design to fit your cash flow and team size
- More control over investment choices and features
With SECURE 2.0 tax credits now covering up to $5,000 in startup costs, small businesses can often launch a 401(k) for little to no out-of-pocket expense in year one.
The Most Common 401(k) Options for Small Businesses
Safe Harbor 401(k)
Ideal for small companies that want to avoid complex IRS testing. You commit to a small employer contribution (often 3%), but in exchange, you get simplified administration and automatic compliance.
Traditional 401(k)
Best for growing businesses that want full flexibility, variable matching, profit-sharing, loans, and vesting schedules. Great for rewarding key employees while keeping overall costs predictable.
Solo 401(k)
Perfect for self-employed individuals or owner-only businesses. You can contribute as both employer and employee, meaning big savings potential and full control.
SIMPLE 401(k)
A stripped-down version with lower limits and less paperwork. It’s a good short-term option for startups or family-run operations with just a few employees.
Pooled Employer Plans (PEPs)
A newer model that lets multiple small employers join one large plan, sharing costs, compliance, and oversight. This setup provides the benefits of scale without the administrative load.
Case Study #1: The Portland Design Studio
A five-person creative agency in Portland wanted to attract and keep top talent, but didn’t think they could afford a 401(k). After reviewing their goals, we designed a Safe Harbor 401(k) with a 3% non-elective contribution.
Because of the SECURE 2.0 tax credits, their startup costs were fully offset, and the company received a tax deduction for its contributions. Payroll integration made the plan effortless to run, and within six months, employee participation hit 100%.
The owner told me, “I wish we’d done this years ago.”
Case Study #2: The Bend Construction Company
A 20-employee construction business in Bend wanted to move away from OregonSaves and give employees a reason to stay long-term. Cash flow varied month to month, so flexibility was key.
We built a Traditional 401(k) with a discretionary profit-sharing component, meaning they could contribute more in profitable years and scale back when needed.
The result?
- Employees began saving more aggressively (many for the first time).
- The company reduced its taxable income.
- Morale improved and people felt genuinely invested in the company’s success.
This plan structure gave them compliance confidence and room to grow without the rigidity of a Safe Harbor formula.
How to Choose the Best 401(k) for Your Oregon Business
- Start with your goals.
Do you want simplicity, flexibility, or a recruiting edge? Your objectives shape your plan design. - Estimate your budget.
Employer contributions can be as little as 3%, and tax credits often cover setup costs. - Plan for growth.
Choose a plan that can scale as you hire more employees. - Educate your team.
The best 401(k) in the world doesn’t matter if employees don’t understand it. Simple, ongoing education makes all the difference.
Final Thoughts
A 401(k) isn’t just a compliance checkbox, it’s a strategic business decision.
For Oregon small businesses, the right plan can:
- Lower taxes
- Boost retention
- Build employee trust
- Keep you out of regulatory trouble
Whether it’s a Safe Harbor 401(k) for simplicity, a traditional plan with profit-sharing, or a Solo 401(k) for the self-employed, the best plan is the one that fits your business story and budget.
If you’re not sure where to start, our experienced financial advisors can help you compare options, run cost projections, and design a plan that grows with your company and your people.
Get In Touch to find out more about how Deschutes can help your company build out a plan that works for your business.
Our Retirement Plan team is available for consultations. You can contact us here, reach out to Phil Sherman, CFP®, CPFA®, NQPC™ at phil@deschutesinvestment.com or Jon Metz, CPFA® at jon@deschutesinvestment.com.