The White House's budget proposal sets aside $6.5 million in funding for the Department of Labor, along with waiver authority, to support state efforts to implement state-based automatic enrollment IRAs or 401(k)-type programs.
Currently more than a dozen state legislatures are actively exploring state-based alternatives to the nation’s retirement plan coverage gap — and one has recently passed legislation that does so.
Under the proposal, DOL officials would be able to issue a waiver to ensure that ERISA would not preempt a state program. Some consider the waiver warranted as a way to keep fiduciary burdens and other liabilities from arising as a result of a state program, with consequent court action — and DOL officials may issue regulatory guidance as well, according to Pensions & Investments.
They may be on to something: P&I further reports that states weighing new retirement plan options are exercising care so as to not violate ERISA and put taxpayers and employers at risk.
For more on the White House budget proposal, view our previous coverage by Nevin Adams, Andrew Remo and Judy Miller.
