Congress should consider creative ways to help small business owners keep pension plans and retirement savings plans going, a lawmaker says.

Rep. Nydia Vel?zquez, D-N.Y., chairman of the House Committee on Small Business, talked about the need for coming up with solutions today at a hearing on reports that small businesses are dropping retirement plans.

“Employers that tried to do the right thing and offer a secure retirement to their workers are being hit the hardest,” Vel?zquez said, according to a written version of her remarks.

“For example, when the value of pensions drop, many small business owners still find themselves on the hook for paying out benefits,” Vel?zquez said. “With credit almost impossible to access, consumer spending near an all time low, and sales devastated, small firms simply lack the revenue to fund retirement plans.”

Some ways to help business owners might be to cap the amount of losses that they are responsible for paying during market downturns, letting small firms to look further ahead for pension values when calculating contributions, and making it easier for small employers to borrow against plans during difficult economic periods, Vel?zquez said.

Stephen Dobrow, president of the American Society of Pension Professionals & Actuaries, Arlington, Va., who owns a San Francisco plan administration firm, said sponsors of safe harbor 401(k) plans need permission from the Internal Revenue Service to suspend contributions without shutting down the plans.

The government also should adopt a new safe harbor 401(k) plan program that would give employers more flexibility during uncertain times, Dobrow said.

Congress also should provide relief for defined benefit pension plan sponsors, Dobrow testified.

Catherine Collinson, president of the Transamerica Center for Retirement Studies, Los Angeles, said Congress should create an annual tax credit to reward small employers that continue to maintain retirement plans and contribute to the plans.

The government also should do more to promote existing retirement savings incentive programs, such as the Saver’s Credit, a tax credit that is especially valuable to low-income workers, Collinson said.

Only 18% of workers in households with annual incomes under $50,000 have heard of the credit, Collinson said.

Links to retirement hearing documents are available here.