03 May Congress Pulls Back Clarifying Rule on Retirement Policy in Retirement and Social Security
Today, Congress voted to roll back a Labor Department regulation that established rules for state and local efforts to improve access to workplace retirement plans for non-government employees. This is one of many regulations which have been reconsidered using the Congressional Review Act, which allows Congress to quickly overturn regulations issued near the end of a prior administration. The Labor Department rule exempted certain types of state and municipal retirement programs from the Employee Retirement Income Security Act of 1974 (ERISA), which generally regulates and governs workplace retirement savings plans. Several states already have plans underway to improve access to retirement savings, and in the near-term, the revocation of the regulations could slow or halt these and other interested states’ activities.
While the current GOP-led Congress and administration may disapprove of the previous administration’s approach, America is sorely in need of measures to strengthen retirement security, so it will be important for policymakers to take additional steps. A recent Gallup poll found that 64 percent of Americans are either very worried or moderately worried about not having enough money for retirement. The Employee Benefits Research Institute projects that approximately 40 percent of Generation Xers will run short of money in retirement. States are interested in tackling this problem, but without the Labor Department guidance in effect, the legality of their efforts is uncertain.
Further action at the federal level is needed. Congress should look for bipartisan policies that provide Americans with the increased savings they need in retirement while minimizing costs to employers.
Last summer, the Bipartisan Policy Center released its own package of proposals to expand access to retirement savings plans, enhance personal savings, encourage lifetime income options, and preserve Social Security for future generations. These proposals could be a starting place for Congress to move the needle on retirement policy.