Commission will study feasibility and options for small businesses.
Amendment to Retirement Programs Mandate Is Victory for Small Biz
In
January 2015, a bill was introduced that would mandate employee retirement
programs at most small businesses. No further action was taken on the bill (H.
924) for more than a year, but last month, the bill was amended to benefit
small businesses.
Under
H. 924, the Secure Choice Retirement Savings Board would be created to
administer two retirement savings trust funds. One of the funds would be a
profit-sharing defined contribution plan offering individual accounts; the
second fund would involve individual contributions made through payroll
deductions and direct IRA payments. The default contribution to the plan would
be 3 percent of the employee’s annual salary, although the Board would be able
to adjust this percentage based on how long an employee has been participating
in the program.
For
businesses employing 10 or more workers, participation in the retirement
savings program would be mandatory unless they already offer employees a
retirement savings benefit, such as a 401k program
This
proposed legislation had small business owners worrying about the impact of
another mandate, the practicality of participating in this program as a small
company, and the administrative burden of being forced to participate. So it
was good news when Resolve H. 4207 was reported favorably by the House
Committee on Financial Services. Under this amendment, the bill would establish
a commission to study the feasibility of this program for small businesses and
analyze options for retirement programs.
“In
the face of several new mandates, small business owners in the Commonwealth
were relieved that legislation to require retirement benefits be offered to all
workers was amended to a bill to simply study the issue for now,” says Bill
Vernon, NFIB’s Massachusetts state director. “The issue of long-term economic
security is a serious concern, but mandating another payroll cost on all small
businesses would limit benefit flexibility in the workplace and threaten
economic growth and job opportunities in the small business sector.”
