According to a 2018 study by the U.S. Bureau of Labor Statistics, “approximately 38 million private-sector employees in the United States do not have access to a retirement savings plan through their employers.” On July 29, 2019, the U.S. Department of Labor announced a new rule that allows small and mid-size businesses to gain access to retirement savings options through Association Retirement Plans (ARPs). This final rule goes into effect on September 30, 2019.
Under the final rule, an Association Retirement Plan can now cover employers in the same industry or in the same geographic area (i.e. state, city, county or a multi-state metropolitan area). The final rule enables small and mid-size businesses to “obtain the economies of scale for administrative costs and investment choices currently enjoyed by large employers.”
The DOL has published a Request for Information (RFI) on “Open Multiple Employer Plans,” plan that covers employees of unrelated employers, with the final rule. Responses to the RFI are due by October 29, 2019, and there may be more changes to come.
Source: U.S. Department of Labor
If you have questions about how this new rule may affect your business or organization, please complete the form below.