State Automatic Enrollment IRAs after the Trump Election: Are They Preempted by ERISA?

In recent years, a number of states have sought to close the retirement savings funding gap by enacting legislation mandating that employers that do not sponsor a voluntary pension plan for their employees automatically enroll their employees in a state-administered IRA program. This Article focuses on the most serious legal challenge these programs face: ERISA preemption.

The Article begins by providing an overview of the state automatic enrollment IRA programs. It then discusses a regulatory safe harbor created for these programs in 2016 and disapproved under the Congressional Review Act in 2018. It then turns to the question whether, in the absence of the safe harbor, state automatic enrollment IRAs are preempted by ERISA. In addressing this question, it considers two subsidiary issues: (1) whether state automatic enrollment IRA programs are employee benefit plans for purposes of ERISA and thus preempted by ERISA, and (2) even if state automatic enrollment IRA programs are not employee benefit plans for purposes of ERISA, whether the state law creating these programs nevertheless relates to other employee benefit plans so as to be preempted by ERISA. Finally, the Article considers the merits of two complaints that have been filed challenging state automatic enrollment IRA programs.