| WASHINGTON, March 30
WASHINGTON, March 30 A divided U.S. Senate on
Thursday sent a resolution to the president's desk killing a
Labor Department regulation aimed at lightening federal
restrictions for new municipally sponsored retirement savings
plans for lower-income workers.
The rule, championed by states such as California but
opposed by the mutual fund industry, exempted local municipal
retirement savings plans from strict pension protection laws.
Utah Republican Orrin Hatch, the resolution's sponsor, said
on Wednesday he expects the Senate to act in the near future to
repeal a related rule affecting state retirement savings plans.
The resolution repealing the municipal retirement savings
rule, approved by a 50-49 vote in the Senate and previously
approved in the House of Representatives, marked the 12th time
the Republican-controlled Congress has successfully killed an
Obama-era regulation through the use of an obscure 1996 law
known as the Congressional Review Act.
The law lets Congress fast-track the repeal of newly minted
rules through a simple majority vote in the House and Senate,
and a signature from the president. Once a rule is repealed, a
"substantially similar" rule cannot be enacted in its place.
The Review Act sets a window of time where Congress can
nullify regulation before it takes full effect. The Labor
Department rule was finalized after the last day of May 2016,
putting it into the window.
Using the resolutions, Republicans have sent rules spanning
a variety of areas to the chopping block in hopes of loosening
regulation they say constricts job and business
Thursday's resolution and its near-twin for state plans
counter the trend by keeping in place regulations small
businesses must follow if their employees enroll in the
Towards the end of President Barack Obama's tenure, his
Labor Department exempted both state and municipally run
retirement savings plans from the landmark 1974 Employee
Retirement Income Security Act, or ERISA - a law designed to
protect workers' savings that details compliance requirements.
Private-sector workers whose employers do not offer 401(k)
or other retirement benefits, and who often have low incomes,
are automatically enrolled in the plans in states such as
California, Illinois and Oregon.
States say the exemption from ERISA lets employers pass
workers' money into plans without having to foot compliance
They also say Wall Street wants to block the plans because
they create competition.
But the Investment Company Institute, a mutual funds trade
group, and U.S. Chamber of Commerce say the exemptions
short-change workers from important federal pension protections
that other workers receive.
"To be blunt, places like New York City shouldn't just get
a pass," said Hatch during the Senate debate on the resolution,
which started Wednesday.
(Reporting by Sarah N. Lynch; Editing by Steve Orlofsky)