By Steve Bulger
Small Business Adminstration Mid-Atlantic Regional
According to U.S. Bureau of Labor Statistics, about half of small business employees do not have access to the same quality work-based retirement plans as workers at large employers. For example, in 2017, only 53% of workers at private-sector establishments with fewer than 100 employees were offered a retirement plan versus 89% of workers at mid- and large-sized firms.
President Trump’s support of small business – the backbone of our nation’s thriving economy – was made evident once again in the closing days of 2019 when he signed into law the Setting Every Community Up for Retirement Enhancement (SECURE) Act. This bi-partisan measure benefits every working American saving for retirement while also providing small business owners and their employees with vital new tools to level the retirement-planning playing field and close the retirement gap for the half of our nation’s workforce engaged in and employed by small businesses.
A recent Pew Charitable Trusts survey isolates prohibitive cost as the primary reason that small businesses do not offer retirement benefits to their employees, often because of economic pressures and challenges that can make offering competitive benefits difficult. With record-low unemployment increasing competition for small businesses recruiting and retaining talent, the SECURE Act makes a career in small business more attractive by opening access to a wide range of retirement programs to those working in the small business sector.
The centerpiece of the SECURE Act — Open Multiple Employer Plans – allows small businesses to pool their resources to offer a retirement plan to workers that is cost effective and simpler to administer, while making it easier for small firms to provide economic security in retirement to their workers, and better position small businesses to recruit and retain the skilled workforce that is an indispensable key to success in today’s fast changing economy. Moreover, small businesses are now eligible for a tax credit for creating a retirement plan for employees’ participation. Anyone working at least 1,000 hours in a year (about 20 hours per week), or three consecutive years of at least 500 hours, will be able to participate under the law.
Americans are living longer and working longer than ever before, many because their retirement savings are inadequate for maintaining a comfortable quality of life. Amid the economic boom fostered by the President’s taxpayer friendly, job-creating policies, there has never been a better time to provide greater access to retirement saving plans to protect their future financial well-being.
###
ABOUT THE U.S. SMALL BUSINESS ADMINISTRATION & SBA ATLANTIC REGION (Region II)
The U.S. Small Business Administration makes the American dream of business ownership a reality for millions of Americans. As the only go-to resource and voice for small business backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster.
