President Donald Trump on Thursday undid the Department of Labor’s Obama-era rule intended to help municipalities develop payroll deduction IRA plans that don’t run afoul of the Employee Retirement Income Security Act.
The rule he signed, H.J.Res 67, nullifies Labor’s rule on Savings Arrangements Established by Qualified State Political Subdivisions for Non-Governmental Employees. It specifically stops municipalities and cities from starting up auto-enrollment retirement plans.
Hatch argued that the regulations, as proposed, “break over 42 years of precedent and allow states to forgo protecting the savings of employees in the private sector and instead encourage states to require businesses to enroll employees in state-run plans.”
The Senate voted to block the plans on March 30.
The House approved two resolutions of disapproval (H. J. Res. 66 and H. J. Res. 67) on Feb. 16 to block what GOP lawmakers called “misguided” Obama-era rules finalized last August that would have “forced” some employers to automatically enroll workers in government-run IRAs through payroll deductions.
Introduced by Rep. Tim Walberg, R-Mich., chairman of the Subcommittee on Health, Employment, Labor and Pensions, and Rep. Francis Rooney, R-Fla., the resolutions would close what the lawmakers say is a regulatory loophole created by the Obama administration and ensure retirement savers continue to receive important safeguards under federal law.
The lawmakers argued that unlike private-sector retirement plans, workers enrolled in these public-sector plans “would not be afforded the important protections” provided by ERISA.
--- Check out CFA Institute Blasts Senate’s Move to Block Auto-Enrollment Retirement Plans on ThinkAdvisor.