The U.S. Department of Labor (DOL) has published a notice of proposed rulemaking and an interpretive bulletin meant to guide states as they create Employee Retirement Income Security Act (ERISA)-compliant programs that help more workers save for retirement.
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The proposal would provide a new safe harbor from ERISA for state-sponsored IRAs that conform to certain provisions. It would allow for automatic enrollment of employees in state-sponsored payroll deduction IRA programs, so long as employees are given the ability to opt out.
While employers would make the automatic deductions from employee paychecks, employees and states would retain control of the program and IRA accounts. Employers could not prevent workers from declining to participate in the program.