The Senate approved a resolution Thursday to block Department of Labor rules allowing cities and other large political subdivisions to set up private-sector retirement savings programs.
The resolution on political subdivisions passed by a 50-49 vote. The House of Representatives had passed the resolution 234-191 on Feb. 15.
The DOL had issued final rules Dec. 19 granting cities and other large political subdivisions a safe harbor to set up payroll deduction individual retirement accounts for private-sector workers who do not have access to workplace retirement savings programs. The rules were intended to remove concern over being pre-empted by federal regulators by clarifying that such programs would not be covered by the Employee Retirement Income Security Act.
The Senate has yet to vote on a resolution blocking the DOL’s rule, issued Aug. 25, allowing states to run such programs; the House passed that resolution 231-193, also on Feb. 15.
“Republicans in the Senate just voted to make it harder for Americans to save for retirement. This vote was an active, willful attempt to undermine the economic security of Americans, made possible by the elected officials who are supposed to represent their interests,” said New York City Comptroller Scott M. Stringer in a statement.
“Every New Yorker and every American should be able to save for a lifetime. But instead of lifting them up, Republicans in the Senate have sold out hardworking families who want to have secure retirements. This vote hurts the 1.5 million New Yorkers — over 58% of private-sector workers — who don’t have access to retirement accounts at work,” Mr. Stringer said.
Mr. Stringer is the fiduciary for the five pension funds within the $170.6 New York City Retirement Systems.
Paul Schott Stevens, president and CEO of Investment Company Institute, said in a statement he applauded the Senate for voting to apply ERISA 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,” Mr. Stevens said.
"By rolling back these regulations, Republicans are destroying the best chance 63 million American workers have of getting access to a retirement plan," said Teresa Ghilarducci, director of the Retirement Equity Lab at The New School, in an email.
"These states took the responsible first step to save their residents from a retirement crisis defined by low coverage and inadequate savings and their taxpayers from the fiscal crisis of providing for an increasing number of indigent elderly. This is a painful step backwards for millions who are shut out from the dwindling number of employer-sponsored retirement plans,” Ms. Ghilarducci said.