The Obama administration initiated a rule that played in favor of fortuneless workers. Thanks to it, those who have been working for an employer that didn’t cover any sponsorship for them had a second chance to enjoy retirement plans nonetheless. However, the senate has just put an end to this law. From now on, local governments can no longer add workers from the private sector in their retirement saving accounts.
Only Two Republicans Did not Vote Against the Retirement Plans Rule
Republicans have been criticizing for a long time now the Obama administration of tolerating for too long the local regulators. Thus, the 50-49 vote that took place on Thursday is an overdue victory for them. The Senate has just put down a Labor Department rule that enabled local governments to connect employees of the private sector to their retirement plan in an automatic way.
It was a tight decision with 50 votes pro and 49 against. The majority of Republicans backed up this initiative, except Sen. Bob Corker who voted against and Sen. Johnny Isakson who wasn’t present at the meeting. The overruling is now on its way to President Donald Trump for his signature.
The controversial Labor Department rule was created last year. Its literature stipulates that cities and states are allowed to take advantage of a new loophole in the astringent Employee Retirement Income Security Act or ERISA. This situation would have led to the much-disputed retirement plans. The movement against this rule started last month, with the House approving two resolutions against the ERISA exemptions. On Thursday, the Senate sealed the deal. It now remains for the Senate to decide the date for a secondary vote regarding the resolution for state programs.
The United States Has a Retirement Crisis
On one hand, supporters of the Labor Department rule saw in it a great potential to attend to the needs of workers with little money for their retirement. On the other hand, those against the exemption interpreted this rule as an excuse for employers to create their own retirement programs. Moreover, it can also add conflict in the private sector.
Nonetheless, the United States is facing a concerning situation regarding the retirement issue. According to AARP, there are about 55 million U.S. citizens whose work isn’t enjoying the assurance of pensions after their retirement.
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