When the Department of Labor (DOL) announced last fall that it was proposing a rule that would make it easier for small businesses to offer retirement benefits to their employees, the NAM praised the decision, calling it “a significant step toward allowing small manufacturers to use competitive 401(k) plans to attract talent in a tightening labor market.” Now, the NAM has partnered with the American Society of Association Executives (ASAE) to submit official comments to help DOL implement its proposed Association Retirement Plans (ARP) rule.
Under the DOL’s ARP proposal, small businesses connected by either geography or industry would be able to band together through a trade association or local business group to offer a single retirement plan for their employees – reducing the cost of offering retirement benefits and thus allowing growing companies to better attract and retain skilled workers.
Employees at small businesses constitute the backbone of our national workforce, and they face an imminent retirement savings crisis. Just 53 percent of workers at companies with fewer than 100 employees have access to a workplace retirement plan, and only 37 percent of small business workers participate in such a plan. Reducing the costs for smaller employers offering a 401(k) will bolster retirement savings for hard-working Americans across the country.
In the comment letter, the NAM and ASAE urged the DOL to clarify that members of manufacturing associations qualify as sharing a common interest under the rule, remove state-level barriers to employer participation in an ARP, and ensure the long-term stability of the program. We also asked the DOL to move quickly toward implementation so that small manufacturers and their employees can benefit from these important reforms in the near term. Once finalized, the ability of employers to offer ARPs will help ensure the financial security of American workers and support a thriving manufacturing workforce.