OregonSaves, the nation's first state-facilitated retirement program, may soon be cutting ties with Ascensus.
During a Nov. 10 board meeting, the Oregon Retirement Savings Board authorized the staff of the Oregon Treasury Savings Network to begin negotiating the termination of its contract with the record keeper, said David Bell, deputy director of the Oregon Treasury Savings Network.
The board decision was the culmination of discussions that have been ongoing since February, Mr. Bell said Tuesday in an interview.
In its contract with OregonSaves, Ascensus specified that if certain asset and account thresholds weren't met it could negotiate with OregonSaves to increase its fees and reduce its expenses. One such "triggering event" occurred in June following discussions that started in February.
"After months of negotiation and a lot of different proposals going back and forth, we did not reach terms agreeable to both parties," Mr. Bell said.
The Oregon Treasury Savings Network must negotiate the termination of its contract with Ascensus given that it does not have the ability to terminate the contract unilaterally, Mr. Bell said. In the meantime, it has lined up the Bank of New York Mellon's subsidiary, Sumday, to potentially serve as the OregonSaves' new record keeper.
OregonSaves has not yet started negotiating officially with the Bank of New York Mellon but given the limited number of record keepers and program managers in the state-run retirement plan business it wanted to be prepared, Mr. Bell said.
"We cannot handle a pause in the program," Mr. Bell said.
A spokesman for Ascensus confirmed that OregonSaves "anticipates transitioning to a new service provider in 2021."
In an email, the spokesman added: "Ascensus is proud of its collective achievements with the state in helping more than 70,000 people actively save in a retirement savings program through their employer."