ERISA Regulations | Employee Benefits Legal Resource Site

In recent years, several states have adopted laws requiring private (nongovernmental) employers to set up payroll deduction individual retirement accounts, individual retirement annuities, or Roth IRAs (collectively, IRAs) for their employees. Certain localities have also indicated an interest in setting up such programs. ERISA by its terms generally preempts any and all state laws relating to any employee benefit plan regulated by ERISA, other than state laws that regulate insurance, banking, or securities. ERISA § 515, 29 U.S. Code § 1144. Two questions were therefore raised by governmental arrangements covering private employers:

Are the state or local laws setting up such programs preempted by ERISA?
Aare the plans themselves subject to ERISA?

The Department of Labor issued final regulations on August 30, 2016 providing a safe harbor for statewide plans covering private employers. On December 20, 2016, it expanded on those regulations with further regulations providing a safe harbor for plans for private employers operated by local governments. This bulletin discusses how those programs work, and what employers can expect from them.

On April 8, 2016, the Department of Labor (“DOL”) issued final guidance dealing with investment advice to ERISA plans and their participants. While this guidance does not by its terms apply to governmental and church plans (which are not subject to ERISA), such plans often use DOL guidance as an indication of best practices which they will follow. Moreover, the DOL suggests that a breach of contract claim may be available to enforce the standards with respect to individual retirement accounts (“IRAs”), which are not subject to ERISA. While the DOL has no authority to regulate governmental and church plans, it has laid out a road map which state courts may use to impose liability on governmental and church plans under a breach of contract theory.

Tag Archives: ERISA Regulations

Department of Labor Regulations Permit State and Local Governments to Set Up Retirement Plans for Private Employers
(Posted on December 20, 2016 by Carol V. Calhoun)

Department of Labor Issues Final Guidance on Investment Advice to Employee Benefit Plans
(Posted on April 8, 2016 by Carol V. Calhoun)