House Resolutions Seek to Block State-Run Retirement Safe Harbors

Resolutions have been introduced in the U.S. House of Representatives to block Labor Department regulations regarding state-run plans for private sector workers.

Reps. Tim Walberg (R-MI), chairman of the Subcommittee on Health, Employment, Labor, and Pensions, and Francis Rooney (R-FL) have introduced two resolutions of disapproval (H. J. Res 66 and H. J. Res 67) to block regulations that they say “jeopardize small business retirement plans, put taxpayers at risk, and undermine the retirement security of working families.”

In the final months of the Obama administration, the DOL created what the congressmen termed “a regulatory loophole” that they say will ultimately force workers into government-run IRAs without the consumer protections provided by ERISA. In late 2015, President Obama directed the Labor Department to clarify ERISA’s application to state-run IRA programs, in the process tilting the playing field in favor of those programs in competition with the private sector.

State Deportments

In 2015, Illinois became the first to adopt a state-based retirement savings program for private sector employees who do not have a retirement plan at work. Today similar initiatives are underway in California, Oregon, Connecticut and Maryland.

More recently, the Labor Department has received inquiries from Seattle, Philadelphia and New York City about the viability of a similar approach for municipalities and “political subdivisions,” and last December issued final regulations expanding the state-run safe harbor to include those programs as well.

Visit our state auto-IRA plan resource center!

In introducing the new resolutions, the congressmen noted that concerns have been raised that the DOL’s actions will not only discourage small businesses from offering private-sector plans, but in the process will also leave working families with less retirement security, inadequate safeguards and limited control over their retirement savings.

‘Diss’ Approvals

They note that under the Congressional Review Act, Congress may pass a resolution of disapproval to prevent, with the full force of law, a federal agency from implementing a rule or issuing a rule that is substantially the same without congressional authorization.

The resolution introduced by Rep. 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. Both resolutions would prevent a future administration from promulgating similar regulations. The resolutions themselves are remarkably straightforward, stating only: “That Congress disapproves the rule submitted by the Department of Labor relating to ‘Savings Arrangements Established by States for Non-Governmental Employees’ and such rule shall have no force or effect.”

Add Your Comments

One Comment

  1. Robb Smith
    Posted February 10, 2017 at 8:52 am | Permalink

    I sincerely hope they are successful in rolling back this intrusive measure. The private-sector will do a better job than any state-run (or fed-run, for that matter) plan. Studies show small-business owners don’t trust governments with their plans.

Post a Comment

Your email is never published nor shared. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>