Description
1. Preemption. The interpretive bulletin makes clear the Department’s view that ERISA
preemption principles leave room for states to encourage greater access to ERISA-based
retirement savings options, as long as employers participate voluntarily and ERISA’s
requirements, liability provisions, and remedies fully apply to plans established through the state
programs. Such state actions do not undermine the primacy of federal regulation with respect to
covered employee benefit plans.
They do not require employers to adopt or participate in ERISA plans, or mandate any particular benefit structure. Instead, they merely give employers an additional option for providing benefits to their employees in a way that is fully subject to ERISA’s regulations, obligations, and remedies. 2. Multiple Employer Plans.
The interpretive bulletin also makes clear that a state is able to sponsor and administer a multiple employer plan for the state’s private sector employers (“state MEP”). The interpretive bulletin explains that, unlike financial institutions that sell retirement plan products to employers, a state can indirectly act in the interest of the employers and sponsor a MEP under ERISA because the state is tied to the contributing employers and their employees by a special representational interest in the health and welfare of its citizens. The state is standing in the shoes of the employers in sponsoring the plan. 3.
Scope. The interpretive bulletin sets forth the Department’s views of sections 3(2), 3(5), and 514 of ERISA as applied only to the three approaches described therein. The interpretive bulletin does not deal with state payroll deduction savings IRA programs that would be covered by the proposed regulatory safe harbor discussed in Section II above.
States would have the option of requiring IRA programs under that safe harbor, facilitating or sponsoring ERISAcovered plans in accordance with this interpretive bulletin, or both. .
They do not require employers to adopt or participate in ERISA plans, or mandate any particular benefit structure. Instead, they merely give employers an additional option for providing benefits to their employees in a way that is fully subject to ERISA’s regulations, obligations, and remedies. 2. Multiple Employer Plans.
The interpretive bulletin also makes clear that a state is able to sponsor and administer a multiple employer plan for the state’s private sector employers (“state MEP”). The interpretive bulletin explains that, unlike financial institutions that sell retirement plan products to employers, a state can indirectly act in the interest of the employers and sponsor a MEP under ERISA because the state is tied to the contributing employers and their employees by a special representational interest in the health and welfare of its citizens. The state is standing in the shoes of the employers in sponsoring the plan. 3.
Scope. The interpretive bulletin sets forth the Department’s views of sections 3(2), 3(5), and 514 of ERISA as applied only to the three approaches described therein. The interpretive bulletin does not deal with state payroll deduction savings IRA programs that would be covered by the proposed regulatory safe harbor discussed in Section II above.
States would have the option of requiring IRA programs under that safe harbor, facilitating or sponsoring ERISAcovered plans in accordance with this interpretive bulletin, or both. .
