The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy association, today expressed disappointment that the Michigan Senate passed SB 807 and SB 808, which would create a retirement savings program and place a new mandate on small businesses.

The MI Secure Retirement program would automatically enroll employees who do not have access to an employer-run retirement plan. This legislation requires employers with one or more employees 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 2023 study, small business owners who employ fewer 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 and 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. “Saving for retirement should be a matter of personal responsibility, not another regulation put on the backs of small business.”