Isakson Applauds Administration’s Rule to Expand Access to Retirement Savings

MARIETTA, Georgia, July 30 -- Sen. Johnny Isakson, R-Georgia, issued the following news release:

U.S. Senator Johnny Isakson, R-Ga., applauded the administration's announcement that it will further expand access to affordable, quality retirement saving options for Americans working in small and mid-sized businesses.

A U.S. Department of Labor rule announced Monday would expand an existing type of retirement plan called a "multiple-employer plan" to make it easier for small businesses to join together to sponsor a single retirement plan for their workers. Previously, those small to mid-sized businesses offering association retirement plans had to all be in the same industry. This final rule makes it clear that an association retirement plan can now cover employers in the same geographic area, such as a common state, city, county or a metropolitan area, even if it crosses state lines.

"As a businessman, I have long understood the need and advocated for retirement options that fit the needs of hardworking Americans in today's workforce," said Isakson, who is chairman of the Senate labor subcommittee. "This expanded rule will provide improved access to more affordable retirement savings options for a 21st century workforce. It is a win for hardworking Georgians and small businesses."

Isakson also supports a broader provision that would build on the new rule and is included the Setting Every Community Up for Retirement Enhancement Act, called the SECURE Act, which passed the U.S. House of Representatives and awaits action in the Senate. If passed, the measure would provide even more Americans with the ability to save for retirement though expanded access to retirement saving options.

With the shift to defined contribution plans, American workers have become increasingly reliant on employer-sponsored 401(k) plans for putting savings into and managing their retirement investments. However, studies have found that many Americans are not saving enough. By permitting these new plan arrangements, the labor department rule enables small businesses to offer benefit packages comparable to those offered by large employers. This will help millions of Americans save for retirement and reduce plan-administration costs for small businesses.

In August 2018, President Donald Trump issued an executive order calling for the secretary of labor to clarify and expand the circumstances under which employers, especially small and mid-sized businesses, may sponsor or adopt an association retirement plan or multiple employer plan as a workplace retirement option for their employees. The department used its delegated authority under the Employee Retirement Income Security Act of 1974 in developing the rule announced by Acting Secretary of Labor Patrick Pizzella.