Insights

Pres. Trump Signs Joint Resolution Nullifying Safe Harbor for State-Run IRA Programs


On April 13, 2017, Pres. Trump signed H.J. Resolution 67, after it was passed by the House of Representatives and Senate. The resolution nullifies the safe harbor that the DOL recently extended to state-run IRA programs. As background, the final rules on this issue provided “a safe harbor from ERISA coverage to reduce risk of ERISA preemption of the relevant state laws.” In other words, if a state program was designed to meet the safe harbor criteria, a private employer would not be required to meet the ERISA obligations for the plan including plan documents and reporting.

Interestingly, this new bill does not actually stop states from establishing a state-run IRA program that private employers could participate in. However, taking away the safe harbor from ERISA admittedly makes any such program less attractive to employers.

While the nullification of these rules directly affects any states with such a program, it will also indirectly impact employers participating in a state-run IRA.. Should an employer decide to participate in a state-run IRA, they would now have to meet the various fiduciary obligations required under ERISA.

H.J. Res. 66 »
H.J. Res. 67 »
White House Statement »