The Senate has voted to overturn Department of Labor (DOL) rules that help state and local governments set up retirement savings plans for private-sector workers who have no access to such plans, according to news reports.
Following resolutions introduced in the House, Senator Orrin Hatch, R-Utah, introduced a joint resolution in the Senate aimed at dialing back DOL rules.
An AARP survey shows that the vast majority (84%) of American private-sector workers “strongly or somewhat agree” that officials should back legislation to enable workers “to save their own money for retirement.” In a statement, AARP Executive Vice President Nancy A. LeaMond, wrote, “AARP is deeply disappointed with the Senate vote discouraging local flexibility to offer workplace savings for the 55 million Americans who currently lack access to retirement savings plans at work. Tremendous momentum has been building across the country to meet the needs of workers who want to save for retirement out of each paycheck but have no opportunity to do so. The Department of Labor last year, at the request of states, provided guidance making it easier to offer savings arrangements to small businesses and their employees. AARP strongly supports these initiatives. Studies have shown that employees are 15 times more likely to save if they have access to a payroll deduction savings plan at work.”
However, some industry groups were worried the DOL rules would mean individuals in these plans would not get the same protections as those in employer-sponsored plans.
Investment Company Institute (ICI) President and CEO Paul Schott Stevens, said, “We applaud the Senate for working to ensure that consumer protections established by the Employee Retirement Income Security Act of 1974 (ERISA) will apply to retirement plans established by municipalities for private-sector workers. We are hopeful that the Senate will continue working to maintain uniform rules for retirement plans by passing a similar resolution to protect workers in state-run plans. Both resolutions have already passed the House of Representatives.”
In addition, Jill Hoffman, vice president of government affairs for investment management at the Financial Services Roundtable (FSR), commented, “Policymakers should make it easier for more Americans to save for retirement without sacrificing needed consumer protections. Whether you participate in a private-sector retirement plan or one offered by a municipality, hardworking Americans deserve the same level of consumer protections to ensure their money is safe and will be there when they retire.”