Who’s Working for You?: ERIC
In a series of articles, PLANSPONSOR is profiling industry groups that work for retirement and health plan sponsors to protect them from onerous burdens and help them with plan design and administration. In this article we profile the ERISA Industry Committee (ERIC).
The ERISA Industry Committee (ERIC) was founded in 1976 to support the ability of large employers (at least 10,000 employees) to provide health, retirement and compensation benefits to workers and families across the country.
In 2015, ERIC expanded its mission to include state and local advocacy to address the aggressive actions of states and localities to regulate employee benefits, posing particular challenges to nationwide employers attempting to provide uniform benefits to employees across the country.
Its mission statement is: “To advocate for federal and state public policies that support the ability of large employers to design, administer, comply with and fund health, retirement and compensation benefits.”
Annette Guarisco Fildes, president & CEO of ERIC in Washington, D.C., says the group has just under 100 members. Kelly Broadway, senior director of Communications, says, “Because ERIC represents only large plan sponsors, ERIC members benefit by our focus solely on the interests that matter to them.”
Guarisco Fildes says ERIC focuses on large issues, such as the tax implications on retirement plans, as well as smaller issues, such as making the default for retirement benefit disclosures electronic, not on paper, which is something retirement plan participants may not read. In addition, ERIC is fighting mandatory inclusion of retirement income projections on participant statements.NEXT: Plan Sponsor Interests
Will Hansen, senior VP of Retirement and Compensation Policy at ERIC, adds that, on a federal level, the biggest concern right now with legislation is about tax reform and whether it will affect retirement accounts. Will Congress use retirement accounts to compensate for other provisions of tax reform? This could impact participation and retirement savings.
On the regulatory front, for employers that still sponsor defined benefit (DB) plans, there are still issue areas where ERIC thinks the administration can assist plan sponsors—Pension Benefit Guaranty Corporation (PBGC) premiums and nondiscrimination testing, for example.
There is also great concern on the state level too. According to Hansen, the creation of retirement plans by states is starting to impose burdens on employers already offering retirement plans. He explains that right now Oregon, which has started implementation of its plan, is imposing a reporting requirement for all employers that want to be exempt from the state mandate because they already offer a plan—they have to fill out an application to report to the state they are already offering a plan. ERIC has advocated to the states because it feels this is in violation of the Employee Retirement Income Security Act (ERISA). “More states are rolling out rules for their plans, and we fear they are going to follow suit with what Oregon is doing,” Hansen says.
He also notes that there is a lot of activity on the state level for paid leave policies. “Mandates on paid leave or paid family leave, compliance and reporting requirements are what is making it difficult for members to comply.”
On the health care benefits front, James Gelfand, senior VP of Health Policy at ERIC, says the Patient Protection and Affordable Care Act (ACA) Cadillac tax is the No. 1 concern of employers. “Now that repeal and replace has petered out, we have lost that opportunity to get rid of the Cadillac tax and make health savings accounts (HSAs) and flexible spending accounts (FSAs) stronger,” he says. “In addition, tax reform could impact health plans, and employers need relief from ACA reporting.”
ERIC is also ERIC is also concerned with state laws being placed that will affect implementation of biosimilar substitutions and the use of telehealth.NEXT: How ERIC Advocates
According to Guarisco Fildes, ERIC has a team of policy experts and a team of lawyers that have political experience to navigate through legislation and the regulatory environment as well as state policy initiatives. Other than meet with legislators and regulators, ERIC advocates for plan sponsors by comment letters to different regulatory agencies and Congress.
ERIC has sent a letter to the Senate about the tax treatment of retirement plans, comments to the Oregon State Treasury about its retirement plan and a comment letter to the Department of Labor (DOL) about its fiduciary rule, among other things.
According to Hansen, one initiative for which ERIC can claim victory concerned the Oregon state retirement plan. He says Oregon attempted to back-end emulate eligibility criteria employers could use; in other words, it was trying to force workers to automatically enroll in their own 401(k)s more quickly than ERISA required. ERIC sent a letter to Oregon and was able to successfully lobby against that. “If that rule would have gone through, it would have required sponsors that already offer plans to moderate on an individual basis whether employees were eligible for the state plan,” he says.
Hansen adds that ERIC is continuing to focus on state plans. While they support them, they don’t want them to impose any burdens on employers already offering retirement plans because those employers are already doing what was the intent of the Oregon law.
Gelfand says ERIC can also claim victory on the health care front. “ERIC is tip of spear when it came to the cap on the exclusion of employer sponsored health benefits.” He explains, “House Republicans last year signaled an interest in a cap on the taxation of health care benefits. Paul Ryan developed a blue print for a better way to cap the taxation on benefits. ERIC engaged in a multi-pronged comprehensive lobbying effort so Congress would better understand how health benefits work, how a tax cap to fund plans would hurt efforts. We had more than 55 business organizations sign on, which we think is unprecedented.” Gelfand says while there was a leaked draft of legislation that included the tax cap, no proposed bill included it. “So we won; we educated Congress.”NEXT: Resources ERIC Provides
According to Guarisco Fildes, with a membership that is so focused, ERIC can provide them with personalized attention. “If they are doing a briefing with the C-suite, we can offer help with that,” she says. In addition, members can see a map on ERIC’s website, www.eric.org, about state policies that are being proposed or implemented. In addition, ERIC holds two meetings a year in D.C. for members only.
Broadway says lawmakers and regulators come speak to members about what laws and regulations have been proposed or implemented and how it affects them. Plan sponsors can network. ERIC doesn’t sell anything, and doesn’t have exhibitors or media attend.
“We treat all membership companies the same. We charge one fee regardless of industry or the amount they use us,” Guarisco Fildes adds.
Broadway adds that ERIC issues federal monthly and state monthly alerts, offering insight into proposed laws and regulations. It also offers members the opportunity to weigh in on comment letters, and will alert them about activities they can do on their own.
ERIC holds a monthly Washington update webinar, as well as a State of the States webinar about what’s going on in different states and what ERIC is doing. Both have a call for feedback for members to share their perspectives.
Broadway says there are also specific policy focus webinars, which update members on what ERIC is doing as well as ask for input. “All of our efforts are based on what members want,” she says.
Broadway concludes: “That means a greater return on their time and investment. Members use ERIC as their outside resource to understand the potential implication of laws and regulations on their benefit plans. It also means that ERIC is a true peer community.”
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