Proposed U.S. Rule Would Allow Small Businesses To Work Together To Provide Retirement Benefits
On. Oct. 22, the U.S. Department of Labor (DOL) released a proposed regulation that would allow small businesses to join together with other businesses in their industry or community to offer 401(k) retirement benefits to their employees. Called Association Retirement Plans, the DOL explained these plans could be offered by professional employer organizations, associations of employers in a city, county, state, or a multi-state metropolitan area, or in a particular industry nationwide. Sole proprietors and their families would be permitted to join such plans.
In a statement, the department said, “By expressly permitting these new plan arrangements, the proposal would enable small businesses to offer benefit packages comparable to those offered by large employers. The Department expects the plans to reduce administrative costs through economies of scale and to strengthen small businesses’ hand when negotiating with financial institutions and other service providers.”
DOL has asked the public to offer comments on their proposal. Click here to read the full proposal and to learn how to submit comments on the proposal, which are due Dec. 24, 2018.