Prudential Retirement’s Jamie Kalamarides feels that multiple small employer plans could help close the gap for more than 78 million employees in the U.S. that do not have a retirement plan.
Kalamarides, senior vice president of Institutional Investment Products testified to that point on Wednesday, March 8 during a hearing of the U.S. Senate Special Committee on Aging regarding the shortage of retirement savings plans among small businesses.
Kalamarides maintains that permitting employers to integrate their resources into a single defined contribution plan would produce lower cost and simplified requirements making it easier for employers to contemplate offering retirement plans.
An obstacle that Kalamarides said could be daunting for small employers is ERISA compliance which, with all the reporting, disclosure and fiduciary requirements, takes a large toll on small employers who may not have the professional knowledge or the time to adhere to all the statutes.
If small employer plans were able to pool their resources together, Kalamarides feels the main impediment for not offering employees retirement savings opportunities would disappear and plans could potentially be extended to a gaping hole of small business employees.
Kalamarides said in statement, “If multiple employer plans are to play a meaningful role in closing the retirement coverage gap, clarifications and changes in the law are necessary, including expanding multiple employer plan sponsorship, reallocating fiduciary and plan administration responsibilities and eliminating non-discrimination testing.”