I have said it a hundred times over: this isn’t your father’s retirement. Long gone are the days of a pension you can’t outlive and a gold watch. Here to stay is an era where workers and families are responsible for their own retirement investments.
The Department of Labor and the entire Obama administration are committed to ensuring the retirement security of America’s workers. But in spite of repeated calls by President Obama for legislation that would automatically enroll workers into retirement plans, Congress has failed to act. The good news is that states recognize that workers need more opportunities to save, and they’re stepping up to create new retirement options.
I was proud to join leaders from both chambers of the Maryland General Assembly this week as they announced a new state commission to study the best ways to expand access to workplace-based retirement plans. Maryland joins several other states in exploring new ways to expand access to retirement savings.
We know that as states explore their options, they are going to have questions for the department about how they can avoid running afoul of the Employee Retirement Income Security Act. At the president’s direction, we have developed a proposed rule, which has been sent to the Office of Management and Budget for their review. We can’t get into the specifics of the proposal until it is published for public comment, but we can say that it will set forth circumstances in which states can administer auto-enrollment IRA savings programs, funded with payroll deductions, without requiring employers to create ERISA-covered plans. We also plan to issue guidance at the same time about how states might pursue an alternative approach that would promote the creation of ERISA-covered plans, which would be fully subject to ERISA’s rights and protections.
We are also nearing the close of the public comment period on a proposed rule that would protect workers’ hard-earned savings from conflicts of interest. The department has been working with consumer groups, the financial services industry, states, Congress and others over the past five years to craft a rule that protects retirement savings while allowing brokers and advisers the flexibility to get paid in multiple ways.
Sept. 24 is the final opportunity to comment on the proposal. As states and the department continue to look for ways to increase retirement security for working people, this is your chance to comment on a proposal that will make sure that the money saved stays where it belongs – in the pockets of working families.
To submit a comment, use one of the following methods: email e-ORI@dol.gov and include RIN 1210-AB32 in the subject line of the message; visit regulations.gov and follow instructions for submitting comments; or send a hard copy via mail or hand delivery/courier to the Office of Regulations and Interpretations, Employee Benefits Security Administration, Attn: Conflict of Interest Rule, Room N-5655, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210.