This week ERIC submitted letters in two different states reminding them of the preemption provisions for employers that currently sponsor retirement plans under ERISA. Both Washington state and Oklahoma are considering the implementation of mandatory state-administered IRA programs which would contravene ERISA’s preemption provisions.
Washington State Retirement Savings Plan: Senate Bill 5740 does exempt employers that provide a retirement savings plan under ERISA; however, it leaves significant discretion to the director of the program to implement rules for the operation of the plan. Therefore, our letter emphasizes the need for administrative preemption – especially in any reporting requirements – and recommends that the bill specifically indicate that the director of the program is not to establish rules in violation of ERISA preemption. To read our comment letter in its entirety, click here. If you have any questions on this issue, please contact Dillon Clair.
Oklahoma State Retirement Savings Plan: Senate Bill 934 requires all employers in the state to enroll their employees in the state program, regardless of whether the employer currently offers retirement savings benefits. Our letter strongly recommends the inclusion of language that exempts employers that offer retirement plans under ERISA. In addition, we suggest that the bill also include language on preemption of administrative and reporting duties. To read our comment letter in its entirety, click here. If you have any questions on this issue, please contact Dillon Clair.
Article by Aliya Robinson, Senior Vice President of Retirement Policy