Employers operating in different industries would be able to pool employee retirement plans under bipartisan legislation introduced by U.S. Rep. Jim Renacci (R-OH).
Under current federal guidelines, only businesses with a common interest or organizational relationship are allowed to pool retirement plans.
Renacci’s Retirement Security for American Workers Act, H.R. 6396, would remove those restrictions and enable employers from diverse industries to share the administrative and regulatory costs of employee retirement plans.
“Having operated a small business for over two decades, I know, like other Ohio small business owners, how important it is to offer retirement accounts to our employees,” Renacci said. “A frequent concern I hear from my constituents is the importance of their retirement security. It’s time for Congress to act and make it easier for small businesses and their employees to save for the future.”
Approximately half of the nation’s private sector workers aren’t covered by a workplace retirement savings programs, many of which work for small firms, a Government Accountability Office report found.
CBIZ Financial Solutions, a Cleveland-based professional services company, said most business owners want to make retirement plans available to employees but the cost and administrative burdens are significant roadblocks.
“Pooled Employer Plans will significantly change this by allowing unrelated employers to pool together into one plan, create economies of scale, lower plan and employee cost to levels only the largest company retirement plans can negotiate, and most importantly, boost retirement savings,” the company said in a letter to Renacci.
The bill, which Renacci introduced with U.S. Reps. Vern Buchanan (R-FL), Ron Kind (D-WI) and Richard Neal (D-MA), is also supported by the American Benefits Council and the American Retirement Association.