Earlier this month, the Department of Labor issued a proposed rule regarding state-run retirement plans for private-sector workers. The proposed rule establishes a new safe harbor from the Employee Retirement Income Security Act (ERISA) for state-sponsored plans with mandatory enrollment of eligible employees. FSI is carefully reviewing the proposed guidance, which will likely open the door for more states to pursue their own state-run retirement plans. In addition, the Department also published an interpretive bulletin clarifying that states are authorized to sponsor and administer ERISA-compliant 401(k) plans for a wide range of businesses.
FSI Executive Vice President and General Counsel David Bellaire said, “While we are still reviewing the proposed rulemaking, we are concerned that state-run retirement plans lack access to the quality, individualized financial advice Americans need in order to meet their financial needs in retirement. Research shows that those who work with a professional financial advisor save more and are more confident in their retirement savings. We want to work with the states to address the retirement savings crisis through financial literacy programs and ensuring continued access to quality, affordable financial advice. We look forward to working with the Department of Labor on this issue.”