Trump Repeals DOL’s City Auto-IRA Initiative
President Donald Trump has signed off on a resolution to kill a rule governing city- and municipality-run individual retirement plans know as auto-IRAs, InvestmentNews writes.
The Department of Labor had issued the rule a month before Trump became president, reducing liability for cities offering auto-enrollment IRAs for employees at smaller firms less likely to offer 401(k) plans, according to the publication. But the House of Representatives overturned the rule in February, with the Senate doing the same last month, InvestmentNews writes.
The DOL’s similar rule governing state auto-IRAs also faces extinction. The House has already voted to repeal the rule, although the Senate has yet to vote on it, according to the publication. And while five states have passed their own legislation to create auto-IRA programs and several more have considered it, these initiatives will likely slow if Trump kills the DOL’s rule on state auto-IRAs, observers tell InvestmentNews.
Meanwhile, the DOL may face potential lawsuits if it makes any changes following Trump’s February directive to the agency to review its fiduciary rule, according to the publication.
Earlier this month the agency delayed the rule, originally due to go into effect April 10, by at least 60 days. Any changes, however, may invite lawsuits from advocates of the rule, InvestmentNews writes.
The agency has scored a string of victories in the courts against opponents of the rule in the past few months, which InvestmentNews attributes in part to the Chevron deference, a 1984 Supreme Court decision that established giving regulators some leeway in enforcement of ambiguous rules. But the courts may take a different stance with Trump as president, according to the publication.
For example, the Supreme Court ruled that the National Highway Transportation Safety Administration’s attempts to kill a Jimmy Carter-era rule at the start of President Ronald Reagan’s term was “arbitrary and capricious,” InvestmentNews writes.
The DOL’s task is made that much harder by its chosen schedule for the reassessment, according to the publication: the rule took six years to roll out, but the review and any changes are estimated to take just a few months.