Small business employees may soon have access to 401ks
WASHINGTON (SBG) - For millions of Americans, work today means money to pay the bills today, with little thought about tomorrow. Saving for retirement is a luxury many simply can’t afford or don’t have access to, especially those who work for small businesses.
According to the Department of Labor and a 2013 Government Accountability Office report, 42 million Americans work for small businesses (companies with 100 or fewer employees ) but just 14% of those businesses offer any sort of retirement savings plans.
“A small business knows how to operate as a dry cleaner as a restaurant as a little corner store but they did not go into business to deal with the bureaucracy especially around retirement savings,” said Alexander Acosta, Secretary of Labor, in an interview Monday.
The Labor Department is behind the plan, which allows small businesses to join forces and have one entity or association, such as an area Chamber of Commerce, manage the retirement plan.
All those businesses could get together through local associations and offer 401ks to their employees,” Acosta said.
It’s all part of an executive order President Trump signed over the summer.
This plan would follow in the footsteps of the newly implemented Association Health Plans (AHPs), which allows small businesses to join forces to provide health insurance to their employees.