The Republican-led Congress just passed a law to make it harder for states to offer voluntary retirement savings plans.
Five states, including Oregon, are in the process of setting up state-sponsored low-fee retirement accounts for workers who don’t have any employer-sponsored retirement plan. The states asked the U.S. Department of Labor to remove legal uncertainty by declaring that the plans aren’t subject to the federal pension law known as ERISA. DOL did that, but financial services firms, which collect fees for setting up retirement savings plans, called for Congress to undo the DOL ruling.
A bill to do that passed the House Feb. 15 on a 231-193 vote, with all but three Republicans for it and all but one Democrat against. It then passed the Senate May 3 by 50-49, with all Democrats against it, and all but two Republicans for it. As of press time, the bill was awaiting President Trump’s signature.
“In the face of a multi-trillion dollar retirement savings crisis, Congress chose to side with the special interests over working Americans,” said Oregon Treasurer Tobias Read in a statement reacting to the Senate vote. Read says Oregon’s program will go forward despite the act of Congress. It will launch July 1 as a pilot project, expanding to employers with 10 or more workers in 2018, and to all employers in 2019.
MORE: Sophistry and doublespeak — The official business group rationale for opposing the DOL rule.