Congressional resolutions to roll back a Labor Department rule that exempts municipal retirement programs from the Employee Retirement Income Security Act (ERISA) drew support from the Investment Company Institute (ICI) and the Financial Services Roundtable (FSR).
Reps. Tim Walberg (R-MI), chairman of the Subcommittee on Health, Employment, Labor, and Pensions, and Francis Rooney (R-FL) sponsored two resolutions in the House (H.J. Res 66 and H.J. Res 67) that proponents say will restore some basic protections for private-sector workers in state and city-run retirement programs.
“These are critical and timely measures to protect American workers by restoring consumer protections under the Employee Retirement Income Security Act (ERISA) and maintaining uniform rules for retirement plans,” Paul Schott Stevens, president and CEO of ICI, said. “These resolutions address two Department of Labor rules that would allow state- and city-run retirement programs to operate without providing workers the bedrock investor protections that private-sector retirement plans have provided for more than 40 years. Under the DOL rules, these government-run plans could promote a sweeping change in retirement policy that would harm retirement savers and the private, voluntary US retirement system.”
ICI sent a letter to all members of the House urging support for H.J. Res 66 and H.J. Res 67.
“We urge members of the House of Representatives to vote in favor of the joint resolutions, and to pursue improvements to retirement coverage at the national level,” Stevens said.
FSR officials agreed, saying that giving states and municipalities a pass from ERISA could put savers’ nest eggs at risk.
“Savers should have the same protection around their nest egg, no matter where they get it,” Jill Hoffman, vice president for investment management at FSR, said.
All retirement plans should provide consistent legal protections under ERISA and the Internal Revenue Code, Hoffman said.
To provide better access to workplace plans, FSR supports changes to ERISA that encourage access to affordable professional financial advice, allow for financial education, and simplify administrative procedures for employers. FSR also backs expanding Multiple Employers Plans (MEPs) to increase access in retirement plans for small businesses.