Congress may be spurred to action by influx of multiple employer plan bills

"While the 401(k) system is working for the millions of workers employed by large employers, employees working for small companies are often left without access to a retirement plan," says Jamie Kalamarides, senior vice president, Institutional Investment Solutions at Prudential Retirement.

As members of the United States Congress prepare to take their seats next year, the industry will be watching to see how they respond to the six bills in Washington that address multiple employer plans-retirement plans adopted by two or more unrelated employers that do not want the administrative burdens and fiduciary responsibilities of sponsoring a plan on their own. 

"These bills have raised the profile of multiple employer plans as a solution to expand retirement coverage to employers who do not offer a traditional 401(k) plan and will serve as a catalyst for Congress to act," Kalamarides says. 

Multiple employer plans help reduce costs and administrative burdens through pooling-two issues cited most by small employers that discourage them from offering a retirement plan.

According to the Employee Benefit Research Institute, only 36 percent of employees working for private companies with 100 employees or less have access to a 401(k) plan. For employees working for employers with less than 10 employees, that number is just 17 percent.¹

"We need to close this retirement gap, and Washington can work together with the retirement industry to improve retirement outcomes by addressing the six bills," says Kalamarides. 

Interested in learning more? Read "Leveraging Multiple Small Employer Plans to Close the Retirement Coverage Gap." Want to speak with Jamie? Contact Tanya Valle.

¹Employee Benefit Research Institute Issue Brief No. 363 October 2011

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