Option to Pool Resources Can Help Small Businesses Short on Time and Money
Washington, DC - Recognizing the benefit of allowing small businesses to pool their resources and share risk regarding 401(k) investment plans, the Project 21 black leadership network offered supportive comments about a proposed federal rule designed to encourage the expansion of Association Retirement Plans.
"By allowing the willing to work together, the Trump Administration is promoting a way for small business owners to offer their employees and themselves retirement security opportunities," said Project 21 member Derrick Hollie, a small business owner who submitted the organization's comments to the Federal Register. "Preparing for retirement is important since we can no longer depend on Social Security. It's a long-term need, but having a plan in place is also a short-term benefit for attracting and retaining quality employees."
According to the U.S. Department of Labor, the proposed rulemaking by the Employee Benefits Security Administration – "Definition of 'Employer' Under Section 3(5) of ERISA – Association Retirement Plans and Other Multiple-Employer Plans" (RIN 1210-AB88 ) – "would make it easier for small businesses to offer retirement savings plans to their workers through Association Retirement Plans, which would allow small businesses to band together to offer 401(k) plans to their employees." It was developed in accordance with President Donald Trump's executive order to "expand access to workplace retirement plans for American workers."
In its submitted comments, Project 21 stated:
This explosion of black entrepreneurship is to be applauded. But it must also be nurtured. Most black-owned businesses are small businesses and thus face specific and sometimes unique challenges in contrast to others…
Not being able to provide retirement security options is a quality of workplace problem that can have a holistic impact on a business. A collective approach successfully implemented in other areas of the employee benefits realm now being proposed by the U.S. Department of Labor can address the disparities between large and small businesses and be particularly helpful to black business owners…
By allowing small businesses to join together and pool their resources in one place, an Association Retirement Plan gives employers relief from much of the administrative demands and legal risk associated with existing retirement security offerings. It would allow employers to protect and retain employees while being able to keep their attention focused on the daily upkeep of their business.
Hollie added: "There are millions of black businesses in America. For too many of them, planning for the future is considered a luxury due to the demands of the present. This proposed rule gives hard-working American entrepreneurs the choice to join an Association Retirement Plan, offering a leg-up on a comfortable exit from the workforce. It would be a welcome option."
To schedule an interview with a member of Project 21 about this issue, contact Judy Kent at (703) 759-0269.
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