Senate Dems Look to Restore ERISA Exemption for State-Run Plans
No sooner had the U.S. Senate voted to unwind the Obama administration’s safe harbor exempting state-run auto-IRA programs from ERISA, than a pair of Senate Democrats introduced legislation designed to restore the exemption.
The Preserve Rights of States and Political Subdivisions to Encourage Retirement Savings (PROSPERS) Act
is designed to ensure that states and cities can continue to create retirement savings programs for workers in the private sector. It would do so by amending ERISA as the Labor Department rules did, providing an exemption for individual retirement plan established and maintained pursuant to a payroll deduction savings program of a state or a qualified political subdivision of a state.
The bill was introduced by Sens. Chris Murphy (D-Conn.), a member of the Health, Education, Labor, and Pensions Committee, and Martin Heinrich (D-N.M.). The bill has a long list of cosponsors, including Sens. Patty Murray (D-Wash.), Ron Wyden (D-Ore.), Chris Van Hollen (D-Md.), Maggie Hassan (D-N.H.), Tom Carper (D-Del.), Dianne Feinstein (D-Calif.), Richard Blumenthal (D-Conn.), Jeanne Shaheen (D-N.H.), Kamala Harris (D-Calif.), Sheldon Whitehouse (D-R.I.), Jeff Merkley (D-Ore.), Dick Durbin (D-Ill.), Tammy Duckworth (D-Ill.), Michael Bennet (D-Colo.), Cory Booker (D-N.J.) and Ben Cardin (D-Md.).
On May 3 the Senate passed H.J. Res. 66 by a vote of 50-49, echoing action taken by the House of Representatives in February. If President Trump signs the legislation, it would cancel the safe harbor promulgated by President Obama’s Labor Department last year. The action was taken under the Congressional Review Act, which allows Congress to consider and pass legislation to overturn certain significant regulation if that legislation is ultimately signed by the president. In April, President Trump signed legislation
that blocks the Obama-era DOL’s safe harbor exempting states’ and municipalities’ auto-IRA programs from ERISA.
The CRA won’t necessarily undo the work that has been done or stop the state-run initiatives underway — although it would potentially undermine the clarity and encouragement that the Obama administration had sought to provide these programs. Indeed, at least five of the states with such programs already underway when the CRAs were passed — Murphy’s home state of Connecticut
, as well as California
, Maryland and Oregon
, have said they say they intend to push forward with programs to provide retirement plans for private-sector workers despite congressional efforts to block them.
The PROSPERS Act is supported by AFL-CIO, SEIU, National Council of La Raza, and the National Conference of State Legislatures.