Federal Budget Seeks to Support State-Based Auto IRAs
The recent White House budget
proposal sets aside $6.5 million in funding for the Department of Labor, along with waiver authority, to support state efforts to implement state-based automatic enrollment IRAs or 401(k)-type programs.
Currently more than a dozen state legislatures are actively exploring state-based alternatives to the nation’s retirement plan coverage gap — and one has recently passed legislation that does so.
Under the proposal, DOL officials would be able to issue a waiver to ensure that ERISA would not preempt a state program. Some consider the waiver warranted as a way to keep fiduciary burdens and other liabilities from arising as a result of a state program, with consequent court action — and DOL officials may issue regulatory guidance as well, according to Pensions & Investments
They may be on to something: P&I
further reports that states weighing new retirement plan options are exercising care so as to not violate ERISA and put taxpayers and employers at risk.