U.S. Labor Dept. Proposal Seeks to Expand Employer-Provided Retirement Plans

WASHINGTON, Oct. 22 -- The Insured Retirement Institute issued the following news release:

The U.S Labor Department today announced a proposal to expand access to employer-provided retirement plans. This is the first official step to implement an executive order issued by President Trump in August.

As proposed, the rule is intended to facilitate the formation of "association retirement plans" (also known as multiple employer plans or MEPs) under which small businesses can join together to make retirement plans available to their employees.

The Insured Retirement Institute (IRI) has long supported the expansion of access to employer provided workplace retirement plans. A proposal to authorize open MEPs was included in IRI's 2018 Retirement Security Blueprint.

IRI commended President Trump for issuing the executive order to remove barriers impeding more employers from sponsoring retirement plans and to allow more of their employees to have retirement saving opportunities. IRI is a leading supporter of retirement security legislation which is now being considered by Congress.

"We welcome today's proposal to help make retirement security a reality to some of the approximately 38 million U.S. private-sector employees who do not have access to an employer-provided retirement savings plan," said Cathy Weatherford, IRI president and CEO. "IRI and its members will carefully review this proposal and provide constructive input to the regulatory process."

According to the Labor Department, association retirement plans could be offered by associations of employers in a city, county, state, or a multi-state metropolitan area, or in a particular industry nationwide and Professional Employer Organizations. Sole proprietors, as well as their families, would also be permitted to join such plans.

The Labor Department proposal seeks to enable small businesses to offer benefit packages comparable to those offered by large employers. The proposal also seeks to reduce administrative costs through economies of scale and improve small business negotiating power with financial institutions and other service providers.

Weatherford added that IRI is hopeful that President Trump's action will spur Congress to enact comprehensive retirement security legislation later this year that will authorize in law the reforms being proposed in the regulation.

Legislation passed the House in September and a similar proposal is ready to move in the Senate. The bills in both chambers will help Americans save for retirement with private-sector savings options; increase access to lifetime income products; help savers make more-informed decisions about their retirement finances and enhance workplace retirement plan features.