DOL ADMINISTRATIVE POLICIES RELATED TO STATE-ADMINISTERED PAYROLL-DEDUCTION IRAs AND ERISA-COVERED PLANS
On August 25, 2016, the White House and U.S. Department of Labor announced the latest rulemaking initiatives to support state-sponsored retirement savings programs.
1. Final rule for State Auto-IRA Programs describing a safe-harbor for state laws that require employers to facilitate enrollment in state-administered payroll deduction individual retirement accounts (IRAs).
2. Proposed rule to help other political state subdivisions, such as cities, consider similar types of plans.
3. The White House Fact Sheet: Making it Easier to Save for Retirement and news release.
All the latest updates can be found on the DOL EBSA's new website.
On November 18, 2015, Interpretive Bulletin 2015-02 “regarding certain state laws designed to expand the retirement savings options available to their private sector workers through ERISA-covered retirement plans” was issued and effective immediately.
For summary of the issues addressed by DOL in the final rule, the new proposed rule, and the existing Interpretive Bulletin, see Groom Law Group’s August 29, 2016 memo.
States as Innovators
On May 27, 2016, Connecticut became the latest state to enact a retirement program for private sector workers. It joins Maryland (2016), New Jersey (2016), Oregon (2015), Washington (2015), Illinois (2015), Massachusetts (2012) and California (2012) already implementing their own programs. Since 2012, at least 30 states have considered proposals to study or establish state sponsored plans.
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