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Text of DOL Interpretive Bulletin 2015-02: State Savings Programs That Sponsor or Facilitate Plans Covered by ERISA
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]Link to more items from this source
[Official Guidance]
Nov. 16, 2015

15 pages. "This document sets forth the views of the [DOL] concerning the application of [ERISA] to certain state laws designed to expand the retirement savings options available to private sector workers through ERISA-covered retirement plans....

"One state approach is reflected in the 2015 Washington State Small Business Retirement Savings Marketplace Act [which] requires the state to contract with a private sector entity to establish a program that connects eligible employers with qualifying savings plans available in the private sector market.... The marketplace arrangement would not itself be an ERISA-covered plan, and the arrangements available to employers through the marketplace could include ERISA-covered plans and other non-ERISA savings arrangements....

"Another potential approach is a state sponsored 'prototype plan.' ... The individual employers would assume the same fiduciary obligations associated with sponsorship of any ERISA-covered plans.... [T]he state or a designated third-party could assume responsibility for most administrative and asset management functions of an employer's prototype plan. The state could also designate low-cost investment options and a third-party administrative service provider for its prototype plans.

"A third approach ... involves a state establishing and obtaining IRS tax qualification for a 'multiple employer' 401(k)-type plan, defined benefit plan, or other tax-favored retirement savings program. The Department anticipates that such an approach would generally involve permitting employers that meet specified eligibility criteria to join the state multiple employer plan. The plan documents would provide that the plan is subject to Title I of ERISA and is intended to comply with Internal Revenue Code tax qualification requirements. The plan would have a separate trust holding contributions made by the participating employers, the employer's employees, or both. The state, or a designated governmental agency or instrumentality, would be the plan sponsor under ERISA section 3(16)(B) and the named fiduciary and plan administrator responsible ... for administering the plan, selecting service providers, communicating with employees, paying benefits, and providing other plan services.... As a state-sponsored multiple employer plan (state MEP), this type of arrangement could also reduce overall administrative costs for participating employers in large part because the Department would consider this arrangement as a single ERISA plan. Consequently, only a single Form 5500 Annual Return/Report would be filed for the whole arrangement. In order to participate in the plan, employers simply would be required to execute a participation agreement ...

"In the Department's view, state laws of the sort outlined above interact with ERISA in such a way that section 514 preemption principles and purposes would not appear to come in to play in the way they have in past preemption cases. Although the approaches described above involve ERISA plans, they do not appear to undermine ERISA's exclusive regulation of ERISA-covered plans."

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