MEPs Can Offer Cost Savings To Small Businesses
Financial Advisor Magazine reported that a coalition of business associations that includes AARP, the US Chamber of Commerce, and the American Benefits Council told a Congressional panel Wednesday that multiple-employer retirement plans (MEPs) “offer economies of scale on investments and administrative costs, and that these are key to expanding retirement savings to small business workers.” AARP’s David Certner said that “federal efforts could complement efforts by the states to develop auto-enroll retirement plans for employees at small businesses,” and added that “AARP believes MEPs can be made to work with the right development and support in Congress by both parties.” For these types of plans to work, Certner called for Congress and the Department of labor to create licensing, bonding, insurance, and reserve standards.
Wyoming Senator Michael Enzi (R) observed that these types of plans could lower the cost of retirement plans for small businesses, and said that owners of these companies “don’t have time to read manual after manual.” Similarly, Prudential Senior Vice President of Institutional Investment Solutions John Kalamarides commented that this change could bridge the retirement coverage gap between large and small businesses, but added that federal law will need to be changed. Specifically, he argued for a change to the rule where one non-compliant employer can threaten the tax status of the entire plan.
What This Means For Small Business
As the NFIB previously observed, “retirement plans are becoming increasingly attractive bait” for talented workers. Measures that would lower the costs for small businesses and allow them to compete with their larger counterparts for experienced workers can go a long way to improve competitiveness in the US economy. Senator Enzi noted that there is bipartisan support for the expansion of MEPs, so this appears to be an easy opportunity to cut back on cumbersome regulations that are holding back small business owners.
Employee Benefit News also covered the story.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.