New Law Expands 401(k) Plans for Small Business
The law boosts the tax credit for starting retirement plans, eases MEP access
A new law expanding retirement plan options for small businesses may encourage more companies to offer the benefits to their workers. The Setting Every Community Up for Retirement Enhancement Act, known as the SECURE Act, won final congressional approval in the Senate last month and was signed into law by President Donald Trump.
One of the bill’s features makes it easier for small businesses to band together to offer 401(k) and other retirement plans. What are called Multiple Employer Plans lower the costs of administering a plan.
The high costs of more complex plans like 401(k)s have put them out of reach for many small businesses. These costs also reduce the returns employees get from their investments. So joining a plan with other companies theoretically will make it easier for small businesses to offer retirement plans.
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