Two Republican congressmen have introduced resolutions to block an Obama administration regulation that allowed state-administered IRA plans to avoid coverage under the Employee Retirement Income Security Act.
Rep. Tim Walberg, R-Mich., chairman of the Subcommittee on Health, Employment, Labor and Pensions, and Rep. Francis Rooney, R-Fla, each issued resolutions of disapproval under the Congressional Review Act.
Walberg's H.J. Res 66 would roll back the Savings Arrangements Established by States for Non-Governmental Employees rule submitted in August, while Rooney's H.J. Res 67 would block a similar rule submitted in December that extends to "political subdivisions" like cities and counties that administer savings programs for private-sector workers.
The Savings Arrangements Established by States for Non-Governmental Employees rule was proposed by the Employee Benefits Security Administration and Department of Labor in August and became effective Oct. 31. It lays out guidance in which state retirement savings programs that are funded by payroll deductions would not trigger ERISA compliance.
The Savings Arrangements Established by Qualified State Political Subdivisions for Non-Governmental Employees rule was proposed Dec. 20.
Some states, including California, Connecticut, Illinois, Maryland and Oregon, have adopted programs for certain employers that don't offer workplace savings plans to automatically deduct a percentage of a worker's paycheck and save them in a state-administered IRA. Employers are not required to make a contribution of their own and employees must opt out, rather than opt in.
Because the DOL has interpreted "employee pension benefit plan" and "pension plan" to include any plan established and maintained by an employer, even if the employer is only minimally involved, some employers were concerned that these state-administered IRAs would be ERISA-covered plans.
