In a rare display of bipartisan cooperation, Republican and Democratic senators and representatives have introduced
a bill that would make it easier for small businesses to offer retirement plans to their employees.
"For smaller employers, offering a retirement plan can be expensive and complex, so we should make it easier and reduce duplicative filing costs for them to offer retirement plans and promote retirement security for all workers," said Sen. Mark Warner, D-Va., a member of the Senate Finance Committee, who introduced the bill with Sen. Susan Collins, R-Maine, chairwoman of the Senate Aging Committee.
In the House, the legislation was sponsored by Rep. Linda Sánchez, D-Calif., a member of the House Committee on Ways and Means, and Rep. Phil Roe, R-Tenn., a member of the House Committee on Education and the Workforce.
The legislation was unanimously approved by the Senate Finance Committee in the 114th Congress, according to a release on the bill from Sen. Warner's office.
The current bill directs the Labor Department and Treasury Department to allow employers and sole-proprietors participating in similar retirement plans to file a single aggregated
Form 5500, a required annual return that provides compliance information to the DOL and Treasury.
(More: Faltering congressional support for auto-IRAs leaves legislation up to states)
Under current law, despite sharing a common administrative framework, each individual plan is required to file a separate Form 5500 to satisfy reporting requirements under the Employee Retirement Income Security Act and the Internal Revenue Code. If passed, the bipartisan proposal would eliminate duplicative reporting by plan administrators, reducing costs for small businesses that maintain retirement plans. To file an aggregated Form 5500, the retirement plans would need to have the same trustee, fiduciary, plan administrator, plan year and investment menu.
A 2016 report by the Pew Charitable Trusts found that only 22% of workers at small firms have access to a workplace savings plan or pension, compared to 74% at firms with 500 or more employees.
"There is an estimated $7.7 trillion gap between what Americans have saved for retirement and what they will actually need," Sen. Collins said. "When employers provide their employees with access to retirement plans, approximately 80% of them contribute."
