Bipartisan legislation introduced by U.S. Sen. Susan Collins (R-ME) would cut filing costs and reduce paperwork for sole-proprietors and small businesses to offer retirement plans to employees.
The bill – S. 3307 – introduced by Collins and U.S. Sen. Mark Warner (D-VA), would direct the Department of Labor and the Treasury Department to allow employers to file a single form for retirement plans administered the same way.
“Americans simply aren’t saving enough to be able to afford a comfortable retirement. In fact, the Center for Retirement Research estimates that there is an estimated $7.7 trillion gap between what Americans have saved for retirement and what they will actually need,” Collins, the chairwoman of the Senate Aging Committee, said. “We know that when employers provide their employees with access to retirement plans, approximately 80 percent of them contribute. Our legislation will help promote retirement security by making it easier and less expensive for small businesses to establish retirement plans, increasing their accessibility to employees and helping to ensure that those who worked hard for decades do not spend their retirement in poverty.”
Under current law, each individual plan that an employer offers must be accompanied by a separate Form 5550 to meet reporting requirements under the Employee Retirement Income Security Act and Internal Revenue Code.
“Increasing access to workplace retirement plans is a crucial step in providing a secure retirement to millions of Americans,” Warner, a member of the Senate Finance Committee, said. “When workers have access to a retirement plan through their employer, nearly 80 percent choose to participate – compared to just 10 percent who do without access through their employers, according to the Bureau of Labor Statistics. As the nature of work continues to change, I am pleased to introduce this bipartisan legislation with Sen Collins to make it easier for small businesses to offer this important benefit to their employees.”