Sens. Susan Collins, R-Maine, and Bill Nelson, D-Fla., introduced Thursday the Retirement Security Act of 2015, S. 266, which allows more small businesses to join multiple employer plans, includes measures to encourage and expand auto enrollment and also expand tax incentives for small businesses.
Companion legislation H.R.557 was introduced in the House by Reps. Vern Buchanan, R-Fla., and Ron Kind, D-Wis.
Sens. Collins and Nelson introduced identical legislation last year, but this is the first time such legislation has been introduced in the House.
Cathy Weatherford, president and CEO of the Insured Retirement Institute, said in a statement that IRI applauds the bills’ introduction, stating that “allowing more startups and small businesses to join multiple employer plans will greatly increase the number of workers with access to a workplace plan.”
The American Council of Life Insurers added that the bills will “facilitate the use of private multiple employer plans, where many small businesses can join together to achieve economies of scale and advantages with respect to plan administration and investment services, making plans much more affordable and effectively managed.”
The legislation would also encourage greater use of auto-enrollment and auto-escalation features and “would allow employers to use a ‘stretch match,’ which encourages greater employee saving to receive matching contributions from employers,” ACLI said.
The bills would expand tax incentives for small businesses to offer retirement plans and make it easier for more individuals to access the Savers’ Credit, which ACLI says helps low-income workers maximize their savings.
Judy Miller, executive director of retirement policy for the American Society of Pension Professionals and Actuaries, added in an email message to ThinkAdvisor that it’s “encouraging” that lawmakers, including Senate Finance Committee Chairman Orrin Hatch, R-Utah, have “indicated that retirement savings is a priority for him,” by having Congress take up this year his Secure Annuities for Employee (SAFE) Retirement Act.
“This Congress could make real strides in expanding opportunities for small businesses to provide retirement programs,” Miller said.