Senate votes to kill DOL state payroll deduction rules

On May 3, 2017, the Senate agreed to a resolution of disapproval under the Congressional Review Act blocking the Department of Labor’s (DOL) final rule that allowed state payroll deduction savings programs to avoid being considered employee pension benefit plans under ERISA. That final rule provided guidance on how states could design and operate payroll deduction savings programs for private-sector employees-including automatic enrollment programs-without causing the states or private-sector employers to have established employee pension benefit plans under ERISA, a so-called “safe harbor.” The DOL rule was disapproved by H.J. Res. 66, which got favorable treatment in the House on February 15, 2017.
On March 13, 2017, the Trump Administration signaled its approval of both H.J. Res. 66 and 67, the resolution targeting an amendment to the rule itself. “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,” according to the statement of administration policy. “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.” In April 2017, President Trump signed into law H.J. Res. 67, which nullified the Department of Labor’s regulations on Savings Arrangements Established by Qualified State Political Subdivisions for Non-Governmental Employees.
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