Businesses of a feather should flock together, according to the US’s Department of Labor.
As reported by InvestmentNews, on July 29th, 2019, the DOL released an expansion on a rule allowing businesses to go together in offering retirement programs. The businesses must have a commonality, but that commonality can vary from location (city, state) to industry.
The DOL did allow multi-employer plans, but the businesses had to fall in the same industry. The new rule, however, expands to allows companies to band together when they are both be members of the same association. InvestmentNews points out this could mean two unrelated small businesses who are members of a regional Chamber of Commerce.
Andrew Remo, director of legislative affairs at the American Retirement Association, thinks the rule’s broadening is a good move, but that the DOL needs to take it a step farther and pass the SECURE (Setting Every Community Up for Retirement Enhancement) Act, which would enable “…’other types of financial institutions to run a 401(k) for their employer customer.'”
Remo states, “‘DOL’s heart is in the right place, but they’re bound by the statute that’s in front of them… SECURE is critical because it would remove all commonality requirements under ERISA. It would create the structure for a true open MEP.'”
Still, others, like Empower Retirement’s chief executive Edmund F. Murphy II, view the expansion as progress in the fight to ensure more Americans have an employment retirement plan. The DOL states that 38 million Americans are without an employment retirement plan opportunity.
Photo by Thomas Drouault on Unsplash
