Pension & Benefits Daily™ covers all major legislative, regulatory, legal, and industry developments in the area of employee benefits every business day, focusing on actions by Congress,...
Two House Republicans introduced resolutions to repeal federal agency rules giving states and cities the green light to require some private-sector employers to earmark retirement savings for their workers.
The resolutions seek to repeal Labor Department rules providing that employers required under state and city mandates to automatically enroll their employees in government-sponsored individual retirement accounts, won’t be considered to be in conflict with federal employee benefits law. The resolutions were introduced Feb. 7 by two members of the House Education and the Workforce Committee.
A resolution introduced by Rep. Tim Walberg (Mich.), chairman of the Subcommittee on Health, Employment, Labor, and Pensions, would repeal a rule giving a safe harbor to the state mandates. The second resolution, offered by Rep. Francis Rooney (Fla.), would repeal a rule allowing programs sponsored by municipalities in states without such a mandate.
These mandates are designed to cover employers that don’t currently offer retirement plans to their employees and are not covered by the Employee Retirement Income Security Act.
Plan sponsor groups claim that the rules are in contrast to the uniformity goals of ERISA in that plans could be subject to different requirements in each state their members work.
ERISA-covered retirement plans would be forced by these state and local proposals to “alter aspects of their retirement plans to be exempt from the state or local mandate,” Will Hansen, senior vice president of retirement policy for the ERISA Industry Committee, told Bloomberg BNA. ERIC advocates for large employer plan sponsors.
For example, Hansen said, the Oregon State Retirement Savings Plan, scheduled to be implemented later this year, provides in a proposed rule a conditional exemption from the program for employers that offer a retirement plan to all employees, but only if the employer enrolls all employees within 90 days of hire. ERISA doesn’t require plan sponsors to enroll their employees so soon, setting up a need for plans to have different plan terms in each state where it has workers, Hansen said.
Tobias Read, the state treasurer of Oregon, told Bloomberg BNA he’s mystified by the disapproval resolutions. He said his state’s program is one that small employers want and need because many can’t afford to provide retirement benefits to their employees on their own.
Read said there needs to be a national approach to enhancing savings for American workers and that he’s happy to work with Congress to achieve that.
These state and local programs are a low-cost and efficient way to provide retirement benefits for a large segment of the workforce that lacks such savings vehicles, John C. Arensmeyer, Founder & CEO of Small Business Majority, told Bloomberg BNA. He said that 90 percent of American businesses have 10 or fewer employees.
SBM represents small businesses consisting of 100 or fewer employees.
Disapproval resolutions are permitted under the Congressional Review Act. The CRA permits Congress to pass such resolutions to block federal agencies from implementing or issuing agency rules. Agencies affected can later issue a rule on the same topic, but only after completing a full comment and review process.
.To contact the reporter on this story: David B. Brandolph in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Jo-el J. Meyer at email@example.com
Rep. Walberg's resolution of disapproval is at http://edworkforce.house.gov/uploadedfiles/hj_res_66.pdf and Rep. Rooney's resolution of disapproval is at http://edworkforce.house.gov/uploadedfiles/hj_res_67.pdf.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)