LANSING, MI (April 18, 2024) — The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy association, today testified in front of the House Labor Committee to oppose the creation of a retirement savings program that would create a new mandate for small businesses.
The Retirement Savings Program has been included in Governor Whitmer’s budget and sets up a state-run retirement plan, which automatically enrolls employees who do not have access to an employer run retirement plan. This legislation mandates that employers with one or more employees would be required to offer an opt-out for their employees, withhold contributions, and remit those contributions to the state.
When NFIB members were asked if they supported such a program, 87% of those responded with a resounding no.
“Once again, the state is forcing unfunded mandates on small employers who simply cannot afford the cost of one more regulation,” said Amanda Fisher, NFIB Michigan State Director.
According to a recent study, small business owners who employ less than 50 employees pay an average of $14,700 per employee to comply with federal regulations. Every state regulation adds to that cost, which can be a deterrent to both starting or growing a small business.
“In addition to the direct cost of additional paperwork and compliance with the retirement plan as dictated by the state, small business owners will be responsible for explaining the program to their employees, and likely, bear the brunt of an employee’s displeasure with the aspects of the retirement program, even though the employer has no control over the how it is administered or what it yields. And of course, there is always the potential of financial penalties for noncompliance,” continued Fisher.
“Individual retirement accounts are available through a variety of banks, credit unions, and brokerage firms,” said Fisher. “In fact, with the availability of on-line banking, these services are extremely accessible for anyone. Requiring employers to be the middleman for a program they have no involvement in is absolutely ridiculous and a clear example of legislative overreach.”
