Committee Meets to Strengthen Retirement Options for Small Businesses
Washington, March 27, 2019
Washington, D.C.— Today, the House Small Business Committee held a hearing to consider how Congress can help more small businesses provide their employees with affordable retirement plans. The hearing was led by Committee Vice Chair Dwight Evans (D-PA), who convened a panel of small business owners, retirement consultants, and experts.
“Whether working for a small or large business, a nonprofit, or as sole proprietors, every American deserves to retire with security and peace of mind,” said Vice Chair Evans. “On this Committee, we are committed to addressing the unique challenges, such as burdensome paperwork and a lack of resources, that unfortunately, put up barriers that can curtail a small business owner’s ability to provide retirement security for their employees.”
Today, half of all American families near retirement have $12,000 or less in retirement savings and one-third have less than $5,000 saved for retirement. Furthermore, half of all small businesses do not have a retirement plan set up. Today, the Committee focused on reversing this trend by looking at the possibilities of reducing the student debt burden facing young professionals, offering increased tax incentives to small business owners who choose to sponsor a plan, exploring auto-enrollment, and potentially allowing small firms to band together to offer retirement plans which could lead to administrative savings and reduced fiduciary liability.
“I recognize that, despite the retirement industry’s best efforts, far too many Americans lack access to a retirement plan at work,” said Martella A. Turner-Joseph, Founding Partner, Joseph & Turner Consulting Actuaries, LLC, Harlem, NY. “Increasing the availability of workplace savings plans will increase the financial and retirement security of American families. There are actions that Congress can and should take to address this lack of access. An excellent first step would be to make it easier and more meaningful for a small business to adopt a workplace retirement savings plan.”
“It’s important that we don’t segregate American workers by the size of the company they work for,” said Paul F. Davidson, Director of Product Management, Paychex, Rochester, NY. “Our existing policies have achieved maximum penetration in the large and midsized market. Now we need to focus on lowering the burden on the employer so all workers, even those at small companies, can save for a dignified retirement.”
“Small businesses that do not (or cannot) offer a retirement plan to its employees are at a distinct disadvantage when it comes to talent acquisition,” said Greg Gorgone, Chief Financial Officer, Citizant, Inc, Chantilly, VA. “Prospective employees are much more likely to take positions with firms that offer retirement plans than those that do not. Consequently, the inability to attract a top-notch workforce stunts the growth opportunities for these small businesses.”
“As we delve into the topic of retirement security, I think we can all agree that the lack of retirement savings is a looming crisis for American families, including those family-owned small businesses,” said Keith Hall, President & Chief Executive Officer National Association for the Self-Employed. “As with any challenge or looming crisis, we have an opportunity to work collaboratively to put forth and champion policies and programs that are flexible, comprehensive, and most importantly, innovative to meet the changing dynamics of how Americans are working in the 21st century.”
“The proposals and ideas discussed today will be a valuable tool as our Committee works to take action on the fundamental issue at hand—helping more workers retire with the dignity and peace of mind they deserve,” said Vice Chair Evans. “By doing so, we can provide greater security for the hardworking employee at a family-owned small business in Pennsylvania and for the millions more like them all across this country.”