The White House in a fact sheet it issued on Aug. 25 announced and expressed support for the Department of Labor’s (DOL) final rule on states creating retirement plans. But sentiment is not universally positive.
The impetus for the final rule was President Obama’s July 13, 2015 call on the DOL for rules that would facilitate states’ creation of their own retirement savings plans in a way consistent with federal law.
The White House notes that some of the laws states have already enacted require employers that do not offer workplace savings arrangements to automatically enroll their employees in payroll deduction IRAs those states administer. It argues that the final rule the DOL issued addresses uncertainty about potential preemption by ERISA that has impeded broader adoption of such programs.
The notion of states providing retirement plans does not enjoy universal support, however. For instance, Investment Company Institute (ICI) President and CEO Paul Schott Stevens in an Aug. 25 statement on the rule expressed disappointment with the rule, and that the final version of the rule does not forbid states from restricting employee withdrawals from IRAs. In addition, Schott says, the DOL did not take into account problems with states’ administration of a variety of programs, and notes that the rule exempts new state plans from investor protections with which private-sector plans must comply.
The impetus for the final rule was President Obama’s July 13, 2015 call on the DOL for rules that would facilitate states’ creation of their own retirement savings plans in a way consistent with federal law.
The White House notes that some of the laws states have already enacted require employers that do not offer workplace savings arrangements to automatically enroll their employees in payroll deduction IRAs those states administer. It argues that the final rule the DOL issued addresses uncertainty about potential preemption by ERISA that has impeded broader adoption of such programs.
The notion of states providing retirement plans does not enjoy universal support, however. For instance, Investment Company Institute (ICI) President and CEO Paul Schott Stevens in an Aug. 25 statement on the rule expressed disappointment with the rule, and that the final version of the rule does not forbid states from restricting employee withdrawals from IRAs. In addition, Schott says, the DOL did not take into account problems with states’ administration of a variety of programs, and notes that the rule exempts new state plans from investor protections with which private-sector plans must comply.
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