Proposed rules for states to set up auto-enrollment IRA savings programs for private-sector employees were submitted for interagency review by the Department of Labor on Wednesday.
Plan contributions would come from payroll deductions but employers would not be subject to the Employee Retirement Income Security Act.
Once approved by the Office of Management and Budget, a proposed rule is expected to be issued by the end of the year.
DOL officials are also working on separate guidance to help states create retirement plans that would be covered, but not pre-empted, by ERISA, which the DOL regulates. That timing remains unclear.
“The reforms happening at the state level have largely flown under the radar for policymakers in D.C. until recently. But now, it is clear that the White House and the department are making it a priority to help the states, and they are trying to act on an expedited schedule,” said attorney Michael Kreps, a principal with Groom Law Group in Washington and former top aide on the Senate Committee on Health, Education, Labor and Pensions.
“DOL's working with states is likely its most significant contribution to retirement security in this administration. The millions without any savings might be able to see retirement as golden years instead of a black hole," said Joshua Gotbaum, a guest scholar in economic studies at the Brookings Institution.