California legislators are fighting a resolution in Congress that could derail plans to create a state-run retirement plan for private-sector employees who don’t have one at work.
The Republican-led House passed the resolution Wednesday. Its next stop would be the Senate floor. If it passes, President Trump is expected to sign it. If that happens, the state might have to go to court to salvage its plan or go back to the drawing board.
The resolution would overturn a ruling the U.S. Department of Labor made in late August. The rule said that state-run retirement plans for private-sector workers would be exempt from the Employee Retirement Income Security Act if they meet certain requirements.
This federal law, known as ERISA, protects participants in private-sector retirement plans, but it puts so many obligations on employers that many small ones do not offer one. Nationally, about half of private-sector workers don’t have access to a workplace plan, according to AARP.
Shortly after the rule came out, California adopted a law that requires any company with five or more workers in the state to either offer its own retirement plan or automatically enroll employees in a state-run plan called Secure Choice.
Employees could opt out of the plan.
Too bad. This is a good idea as it encourages people to save for retirement. Rather than slam the Califonria law, Congress should work to help find common ground.
Then again, that would be too much to ask of our leaders.
Read the whole story in the San Francisco Chronicle