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Congressional resolutions could have Texas impact

Talks of statewide retirement program continue

Congressional resolutions just made it harder for Texas to create retirement programs for private-sector workers who do not have access to retirement benefits through their employers. 

Congress passed resolutions that invalidate rules submitted by the U.S. Department of Labor's Employee Benefits Security Administration regarding savings arrangements established by states for non-governmental employees. The rules were safe harbors for states and cities wishing to ensure more citizens have access to some form of retirement saving program. 


The amended rules could impact current and future pushes to create a state-wide 401 (k)-like retirement program in Texas for private-sector employees. House Bill 3601 by Rep. Roberto Alonzo, D-Dallas, would create a state savings prog. The bill is under review by the House Pensions Committee, where it has been pending since April 24. With two weeks left during the legislative session, there is little hope the bill will make it to a House floor vote and the Senate for consideration. 

Even if it did, the two Congressional resolutions would provide an obstacle to passage. S.J. Res. 32 nullifies a rule that describes circumstances in which a state payroll deduction savings programs with automatic enrollment would not give rise to the establishment of employee pension benefit plans under the Employee Retirement Security Act of 1974, also known as ERISA. The rule no longer guides states designing the programs to reduce the risk of ERISA preemption of state laws and private-sector employers that may be covered by the state laws. S.J. Res. 33 reverses a Department of Labor rule that amends a regulation that expands the operation of payroll deduction savings programs for private-sector employees beyond states to cover qualified state political subdivisions.

Alonzo's bill received support from the National Conference of Public Employee Retirement Systems and the Texas Association of Public Employee Retirement Systems. Max Patterson, TEXPERS' executive director, wrote letters to Texas senators John Cornyn and Ted Cruz urging the congressional leaders to vote against the resolutions. He wasn't the only person writing Congress. TEXPERS and the NCPERS asked their members to write letters to their U.S. senators urging them to vote “no” when the resolutions were brought to the floor for votes. 

According to NCPERS, states have developed programs that combine the best of public- and private-sector approaches, based on years of research and study. California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, Oregon, and Washington have already enacted legislation to help private-sector employers automatically enroll their employees in Secure Choice retirement plans. TEXPERS' Patterson said Texans have a legendary independence and the U.S. Congress should not have gotten in the way of any progress Texas may make to provide retirement security for all working people. 

A discussion is already underway regarding the possibility of bringing the measure back to the Texas legislature for its next session in 2019. Although, the approval of the congressional resolutions just put up another barrier on the path to seeing a statewide program enacted. Texas proponents of the statewide private-sector retirement program are not deterred, however. 

According to an article published by Pensions and Investments, the passage of the resolutions has only "stiffened" the resolve of states to push ahead and find a way around the rules. Click the publication link to learn how the states are reacting to the congressional resolutions.

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