by Countable | Updated on 1.11.19
According to our partners at USAFacts, a non-partisan, not-for-profit civic initiative aimed at making government data accessible and understandable, roughly 85 percent of workers at private-sector establishments with 100 or more workers were offered a retirement plan in 2017. Only 55 percent of workers at companies with fewer than 100 workers had the same access, as the graph below shows.
The people without access to employer-sponsored retirement plans can lose out on some of the tax breaks everyone else gets, and they tend to save far less for retirement.
Small businesses generally say that cost is the reason they don’t offer retirement plans. Thanks to economies of scale and negotiating power, bigger 401(k)s tend to pay lower fees. They also diffuse the various hassles associated with maintaining a plan, such as hiring a lawyer to make the required regulatory filings.
One solution would be for the federal government to help firms band together to set up Multiple-Employer Plans (MEPS), sometimes referred to as Association Retirement Plans (ARPs). The idea has broad support from financial services firms and many in the small business community.
The challenges is that the MEPS idea may not be legal, as the National Review explains:
“Put simply, the obstacles to multiple-employer plans involve a tangled mix of statutes and regulations, and it’s somewhat debatable whether executive action alone can fix the problem. With retirement plans, the key issue is [the Employee Retirement Income Security Act] ERISA’s definition of an ‘employer,’ which explicitly mentions associations acting on behalf of employers to provide benefits, but which has typically been interpreted in a narrow fashion.”
If it came to it, the Trump administration could seek to convince the courts that its proposals are consistent with ERISA, or Congress could change the law.
Do you support Trump’s efforts to make it easier for small businesses to pool together to offer 401(k) plans? Why or why not? Tell your reps what you think, then share your thoughts below.
—Sara E. Murphy
(Image Credit: iStock.com / monkeybusinessimages)
Written by Countable
I’m pretty sure that it’s not legal. I wouldn’t be too enthusiastically supportive of a shady system like this. Skirting the law with other people’s money is a pretty good way to lose it to con-men. Much like 45, in fact.
Trust anything coming from Trump and his White House? You Have To Be Kidding!!! Corporate America can be trusted to not support pensions or any type of retirement benefits for their employees in most cases, Trump’s history is even worse.
For a long time the government has been very anti entrepreneur. I support any deregulation that allows common sense solutions for small businesses.
This is an issue that will be following folks from the Generation X for their whole lives. We’ve been working for 20-30 years already, and only have Social Security and our mere 401(k) retirement supplements that often aren’t contributed to by employers. While they offer a 401(k), more and more rarely do they offer any match. The 401(k) is not a RETIREMENT plan, it’s a SUPPLEMENT. The idea of an actual Retirement Plan, or a Pension, is long sense a distant memory for by far, the vast majority of anyone born in the 70’s and beyond. This will mean people will be working into their 70’s and 80’s and living closer to the poverty level, leaning more on social services, SNAP, food pantries, etc. Fewer and fewer will realize the American Dream of owning their own house. (Which isn’t on the radar for most Millennials now.) We’ve been kicking this can down the road for years now, and it’s now going to come back to bite us sooner than later.
I think pooling resources is a good idea. I simply do not trust trump not to have figured out how to end up with all those resources in his pocket.
Thank you President Trump for looking out for us!
If Trump wanted to help Americans save, why did his Treasury Department shut down the MyRA program? I'm skeptical that anything this administration comes up with would benefit real workers and not Wall Street.
How is Donald Trump going to benefit from this? The guy doesn't do anything unless it benefits him in one way or another. I'm all for making sure retirees are taken care of. Donald Trump & his administration involvement throws up red flags I cannot ignore.
To be honest, trump has spent the last two years.... and his campaign, and really his whole adult life, lying and cheating people, so I never support him because I never believe what he says, nor that what he does is beneficial to anyone other than himself. Would I like retirements to be secure? Absolutely. Do I think that trump would do something to help the people of this nation? Not on your life.
Trusting people like Trump to “fix” anything for anyone who isn’t wealthy is a mistake, as we have seen time and again.
I don’t trust him to do anything for me, so far he’s doing a good job at deploying my retirement funds.
He is so underhanded that I think he is just trying to do away with our social security, or dip into it he has in two years raised the deficit of this country more than any other president. Now he is looking for ways to screw us again and wrap it up in a pretty package.
“Let us not seek the Republican answer or the Democratic answer, but the right answer.” - President John F. Kennedy (D) I’m in strong support of President Donald Trump initiative recently of issuing his executive order aimed at increasing retirement security. He gave the Department of the Treasury six months to look into ways to make it easier for small businesses to offer retirement plans to employees, and to expand access to retirement plans for part-time workers, sole proprietors and “other entrepreneurial workers with non-traditional employer-employee relationships.” Sadly 🤬 of course we’ll most likely seeing the U.S. House, under “TinkleBell” Pelosi’s Democratic leadership along WITH the Democratic Senate under the Schumer leadership, will,fight it tooth 🦷 and nail in objection. SneakyPete.......... 🤔👍🏻🤔👍🏻🤔. 1*11*19.........
Since Trump has never done anything for anyone but himself I must assume he has a sceme to profit from this arrangement.
My faith in this POTUS is lacking to say the least.
Trump is not increasing retirement security. He wants to take federal pensions away from our own workforce, for starters. He’s working people without pay, has a history of not paying people for their work. This is another “All Hail Trump” question not supported by reality.
EVERYTHING OUT of Fuerher Trump’s MOUTH is DECEITFUL so NO I DO NOT SUPPORT THIS FLIMFLAM MAN’S balogne!
I don’t oppose the objective, I just don’t trust trump to do anything positive for anyone but himself. If someone with certified “public servant” credentials is involved I’ll reassess.
You mean the same trump who wants to cut and privatize Social Security? You mean the same trump who wants to cut Medicare and Medicaid? He has zero credibility with anything he says...
On the surface it sounds good and sensible but with this administration it seems more likely to be an empty distraction and a scam.