Washington, DC (October 22, 2018) – The Job Creators Network today applauded a proposed rule by the Department of Labor that would allow small businesses to offer retirement benefits to their workers through business associations.
“Retirement plans allow employers to compete for good workers and keep them longer, but only 14 percent of small businesses can offer the benefit because the costs are significant and the administration is a headache,” said JCN President and CEO Alfredo Ortiz. “This rule evens the playing field.”
Under the rule, small businesses would be able to offer 401k plans through business associations. The change would bring down the cost for small employers, which are substantially higher than they are for large corporations. Since the associations would be the plan administrators, participants would be free of the administrative responsibilities as well.
“Administering a retirement plan is complicated, time-consuming, and expensive for small businesses,” said Ortiz. “This evens the playing field. It allows small businesses to offer benefits that are competitive with large corporations.”
Small businesses employ half the American workforce. According to Ortiz, workers are much more likely to save for retirement if the plan is offered through work.
“We have a very low savings rate compared to the rest of the world,” he said. “This has the potential to encourage millions of workers to save for the future, and that’s especially important for workers at the lower end of the income scale.”