When the U.S. Department of Labor released its finalized safe harbor for state-administered retirement plans this past August, the agency laid out specific conditions by which states could mandate participation in retirement plans without exposing employers to the Employee Retirement Income Security Act’s fiduciary requirements.
Several states had legislated, or were in the process of legislating, state-administered retirement plans prior to the safe harbor’s finalization.
But questions lingered as to whether or not state payroll deduction programs would inadvertently cause participating employers to establish ERISA-covered plans, creating “a serious impediment to the wider adoption” of state-run programs, according to Labor Department analysis published with the safe harbor.
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