Trump Closes ERISA Safe Harbor for State-Run Programs
President Trump has signed legislation that overturns the Obama administration’s ERISA safe harbor rule for state-run auto-IRA programs for private sector workers.
He signed the legislation on the last day he could to avoid a pocket veto of the measure. 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. The action was taken under the Congressional Review Act, which allows Congress to pass legislation overturning certain significant regulations if that legislation is ultimately signed by the president.
The DOL’s state plan rule
was finalized in August 2016 and became effective in October 2016.
In April, President Trump signed legislation
that blocks the Obama-era DOL’s safe harbor exempting states’ and municipalities’ auto-IRA programs from ERISA.
We’ve noted before that while the withdrawal of the safe harbor undermines the clarity and encouragement that the Obama administration had sought to provide these programs, it won’t necessarily undo the work that has been done or stop the state-run initiatives already underway – but it just got a little more complicated.