Los Angeles partner Fred Reish was quoted in a ThinkAdvisor article titled, “DOL Advances State-Based Retirement Plan Rule. The article discussed the Department of Labor and the Office of Management and Budget’s recently filed proposed rule designed to make it easier for states to offer their own retirement plans without running afoul of ERISA.
Fred commented on the issue of allowing state-based plans, saying that it creates a tension between the private sector and the state and federal governments because the private sector “generally believes that it should provide retirement services and investments to companies to use for their employee retirement plans.” Fred says that ERISA generally supports this view, and, as a result, guidance from the Department of Labor is critical.”
The Department of Labor “may rule that government required plans are permissible, [but] the devil is in the details,” said Fred. For instance, “some states might just require that plan sponsors only facilitate IRA contributions by employees. Those arrangements, properly done, are not ‘plans’ and therefore do not implicate ERISA.”