"Perez acknowledged that states might face legal challenges, despite the Labor Department's clarifications. He noted that the department has had discussions with various constituencies objecting to state participation in the retirement savings arena. 'The safe harbor is not an air-tight guarantee,' he said. 'The federal courts are the ultimate arbiter on the question of whether state retirement plans are legal or not. But our proposals would provide states with a road map for minimizing the risk of a lawsuit. We could never eliminate litigation risk. But we believe we can substantially mitigate litigation risk with this regulatory proposal.' "

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