The Financial Services Roundtable (FSR) applauded the U.S. Senate for passing a joint resolution to reject the Department of Labor’s (DOL) government-run and mandated IRA rule for local municipalities.
The DOL rule, established during the Obama Administration, allows states and municipalities to establish auto enrollment, payroll-deduction plans for private sector employees of companies that do not offer 401(k) plans. H.J. 67 resolves to end the auto-IRA rule for municipalities.
The rule exempts, under certain conditions, the auto-IRAs from the Employee Retirement Income Security Act (ERISA), a federal law that sets minimum standards for retirement plans in private industry.
FSR supports expanding access to retirement savings, but believes both private sector and government-run plans should be held to the same ERISA standards to better protect consumers.
“Policymakers should make it easier for more Americans to save for retirement without sacrificing needed consumer protections,” Jill Hoffman, FSR’s vice president of government affairs for investment management, said. “Whether you participate in a private sector retirement plan or one offered by a municipality, hardworking Americans deserve the same level of consumer protections to ensure their money is safe and will be there when they retire.”
H.J. 66, which would kill the auto-IRA for states, has not yet been voted on in the Senate.
The Trump Administration “strongly supports” the passage of the joint resolutions.
“The rules allow a new type of State-based retirement plan that would lack important Federal protections, and they would give a competitive advantage to these public plans,” Administration officials said in a statement. “These joint resolutions would prevent the Department of Labor from reissuing a rule that is substantially the same as the disapproved rule absent specific future congressional authorization. If these bills were presented to the President in their current form, his advisors would recommend that he sign them into law.”