There is a “retirement crisis” in America. Contributing to
this crisis is the fact that millions of Americans do not have
access to a retirement savings plan through their employers.
States, concerned with the economic stability of their citizens,
have created laws that require private sector employers to
implement state-administered payroll deduction IRA programs
in their workplaces. Even though many states are currently
debating whether to adopt state payroll deduction programs,
this Article will focus on Oregon, Illinois, and California, which
have enacted laws along those lines.
One obstruction to wider adoption of such state measures
has been uncertainty about the effect of the Employee
Retirement Income Security Act’s (ERISA) broad preemption of
state laws that “relate to” private sector employee benefit plans
and its prohibition on requiring employers to offer ERISA plans.
To remedy this problem, the Department of Labor (DOL) has
published a Notice of Proposed Rulemaking (NPRM), which
would make it clear that state payroll deduction savings
programs with automatic enrollment conforming to the safe
harbor in this proposal do not establish ERISA plans.
William A. Nelson, Allowing States To Help Workers Save For Retirement: Department of Labor's Proposed Rulemaking That Provides A Safe Harbor for State Savings Programs Under ERISA, 18 Marq. Ben. & Soc. Welfare L. Rev. 65 (2017).