State Automatic Enrollment IRAs After the Trump Election: Are They Preempted by ERISA?

64 Pages Posted: 31 Jan 2019 Last revised: 10 May 2019

See all articles by Kathryn L. Moore

Kathryn L. Moore

University of Kentucky College of Law

Date Written: January 23, 2019

Abstract

In recent years, a number of states have sought to close the retirement savings funding gap by enacting legislation mandating that employers that do not sponsor a voluntary pension plan for their employees automatically enroll their employees in a state-administered IRA program. This article focuses on the most serious legal challenge these programs face: ERISA preemption.

The article begins by providing an overview of the state automatic enrollment IRA programs. It then discusses a regulatory safe harbor that was created for these programs in 2016 and disapproved under the Congressional Review Act in 2018. It then turns to the question whether, in the absence of the safe harbor, state automatic enrollment IRAs are preempted by ERISA. In addressing this question, it considers two subsidiary issues: (1) whether state automatic enrollment IRA programs are employee benefit plans for purposes of ERISA and thus preempted by ERISA, and (2) even if state automatic enrollment IRA programs are not employee benefit plans for purposes of ERISA, whether the state laws creating these programs nevertheless relate to other employee benefit plans so as to be preempted by ERISA. Finally, the article briefly considers the merits of two complaints that have been filed challenging sate automatic enrollment IRA programs.

Keywords: Pensions; ERISA Preemption; IRAs; State Automatic Enrollment IRAs

JEL Classification: J26

Suggested Citation

Moore, Kathryn L., State Automatic Enrollment IRAs After the Trump Election: Are They Preempted by ERISA? (January 23, 2019). 27 Elder Law Journal 51 (2019), Available at SSRN: https://ssrn.com/abstract=3321894

Kathryn L. Moore (Contact Author)

University of Kentucky College of Law ( email )

620 S. Limestone Street
Lexington, KY 40506-0048
United States
859-257-7637 (Phone)
859-323-1061 (Fax)

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