The U.S. House of Representatives has voted for a resolution that could disallow a new state-run retirement program in California, affecting as many as seven million workers.
The program, called Secure Choice, will automatically enroll employees whose companies do not offer retirement plans in a state-run plan, unless they opt out.
But the program relies on an Obama administration rule that exempts state-run programs from a federal retirement law that could put businesses and taxpayers on the hook for investment losses.
"It would make it very, very difficult," said John Chiang, state treasurer and gubernatorial candidate, who oversees the program. "I know there would be some high-thinking as to what we could do in place of the fact that we had the Department of Labor rules, but it would just be better if everybody was on the same page."
Removal of the rule would not necessarily end California’s program, but would expose it to lawsuits.
The financial services industry has been the main opponent of both the federal rule and California’s program, arguing it leaves workers without protection.
Repeal of the rule still requires a majority vote in the Senate and the President’s signature.
