Following a directive from President Donald Trump, the Labor Department on Monday announced a proposed rulemaking designed to make it easier for small businesses to offer retirement savings plans to their workers through association retirement plans, often referred to as multiple-employer plans, or MEPs.
Trump signed an executive order on Sept. 5 during a visit to Charlotte, North Carolina, under a banner reading “Securing Americans’ Retirement,” directing Labor to ease rules on small-business MEPs and also instructing the Treasury Department to review required minimum distributions, or RMDs, from 401(k)s and IRAs.
Labor Secretary Alexander Acosta said during a Monday afternoon call with reporters that the proposal will help “close our nation’s retirement savings gap,” citing a recent Government Accountability Office report finding that only 14% of small employers offer retirement plans.
Acosta said two MEP approaches could be offered: Trade groups or associations of businesses could come together to offer them, or professional employer organizations such as those that currently provide payroll services to employers could band together to offer them.
“Many small businesses would like to offer retirement benefits to their employees, but are discouraged by the cost and complexity of running their own plans,” Acosta said.
Association retirement plans “give these employers a simple and less burdensome way to offer valuable retirement benefits to their employees,” Acosta added. “The proposed rule helps working Americans — and their families — take care of themselves in their retirement years.”