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Under the new rules finalized by the Labor Department, state
retirement programs are not preempted by the Employee Retirement
Income Security Act (ERISA) as long as they meet certain
criteria, the White House said in a statement.
ERISA sets minimum standards for private pensions and health
plans.
There had been some concern that having employers involved in
these state plans might open states up to lawsuits under ERISA,
Labor Secretary Thomas Perez said.
"We believe that this final rule goes a long way to mitigating
that litigation risk, because we believe that states who comply
with this rule will be on very sound legal footing," Perez said
on a call with reporters.
A state savings program will not be considered an ERISA plan if
it is administered by the state, includes a limited role for
employers and is voluntary for workers, the administration said.
U.S. President Barack Obama has sought to expand retirement
savings during his time in office, but his proposals to
automatically enroll workers in Individual Retirement Accounts
have not made it through Congress.
Eight states have moved to set up their own retirement plans for
private sector workers, including California, Connecticut and
Illinois.
The Labor Department also proposed rules on Thursday that would
allow some large cities to set up retirement plans if they
choose.
(Reporting by Ayesha Rascoe; Editing by Phil Berlowitz)
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