Compliance

Lawmakers Move to Block Final Rule on State-Run Retirement Plans

Their concerns are that small businesses will be discouraged from offering retirement plans to employees, and that employees put into state-run plans will not have the protections of ERISA and will have limited control over their retirement savings.

By Rebecca Moore editors@assetinternational.com | February 09, 2017
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Representative Tim Walberg (R-Michigan), chairman of the U.S. House Subcommittee on Health, Employment, Labor, and Pensions, and Representative Francis Rooney (R-Florida) have introduced two resolutions of disapproval to block regulations issued by the Department of Labor (DOL) regarding the set-up of state-run retirement plans for private-sector employees.

Their concerns are that small businesses will be discouraged from offering retirement plans to employees, and that employees put into state-run plans will not have the protections of the Employee Retirement Income Security Act (ERISA) and will have limited control over their retirement savings.

The resolution introduced by Chairman Walberg (H. J. Res 66) would roll back the regulatory “safe harbor” created by the Obama administration that will result in private-sector workers being forced into government-run IRAs managed by states. Rep. Rooney’s resolution (H. J. Res 67) would block a second regulation that extended the “safe harbor” to include cities and counties.

“This last-minute regulatory loophole created by the previous administration will lead to harmful consequences for both workers and employers,” Rooney says. “Hardworking Americans could be forced into government-run plans with fewer protections and less control over their hard-earned savings. Employers will face a confusing patchwork of rules, and many small businesses may forgo offering retirement plans altogether. Congress must act to protect workers and small businesses from these misguided regulations.”  

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