Description: The resolution would block the Obama-era rule that assists states that create Individual Retirement Account (IRA) programs for private-sector workers. Some states are moving forward with initiatives that would require employers that do not offer a workplace retirement plan to automatically enroll workers in payroll deduction IRAs administered by the state. The Obama-era rule clarifies that such plans, if funded entirely through voluntary employee contributions, are not covered by the Employee Retirement Income Security Act (ERISA), the federal law governing private-sector employer-sponsored retirement plans.
Fair Economy Impact: An estimated 55 million private-sector wage and salary workers ages 18-64 do not have access to a retirement savings plan through their employers. State and local payroll deduction savings initiatives encourage employees to contribute to tax-favored IRAs through automatic payroll deduction. These savings initiatives provide important assistance to workers in saving for retirement because few workers contribute to a retirement plan outside of work. By clarifying the legal status of these plans, the Obama-era rule allayed concerns that employers, states, municipalities or the plans themselves could take on unwanted liabilities or duties under ERISA. The Government Accountability Office warned that such legal uncertainties could delay or deter states’ efforts to expand coverage.