DOL Proposes Rule to Help Small Businesses Offer Retirement Plans

A new proposal from the Department of Labor today would allow small businesses to band together to offer 401(k) plans to employees like those offered by larger companies. Under the proposal — which was issued in response to a presidential executive order earlier this year — associations of employers in a city, county, state or a multi-state metropolitan area, or in a particular industry nationwide would be permitted to offer “association retirement plans.” Sole proprietors and their families would also be permitted to participate in these plains.

“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,” said Labor Secretary Alexander Acosta. “Association Retirement Plans give these employers a simple and less burdensome way to offer valuable retirement benefits to their employees.”