Small Business Minnesota is serving on a committee reviewing and commenting on proposed public retirement savings plans for small businesses.
Many small-business owners are unable to offer retirement savings plans to their employees and some do not have retirement savings plans for themselves. To help kick-start savings and to relieve small business owners from administrative burdens, Minnesota is joining other states in studying options for small businesses owners and/or their employees.
Giving Small Businesses A Competitive Edge Creating a New Retirement Plan
By Mary Jo George, Minnesota AARP
Today, a secure retirement is out of reach for many Americans. The typical working-age household has only $3,000 in retirement assets, while near-retirement households have only $12,000. In Minnesota, nearly 1 million workers lack access to a retirement plan at work. Many small business owners are unable to offer retirement plans to their employees because it can be too costly and administratively burdensome. That’s why Minnesota joins the ranks of other states in studying a new retirement savings option for small businesses called the Secure Choice Plan.
How it works: The Secure Choice plan would be administered through the state board of investment, and administrative duties could be contracted out with a private-sector third-party. The plan harnesses the state’s ability to pool the interests of private employers who choose to take part in the program, thereby allowing economies of scale (creating a large group) to lower investment and administrative costs. Pooled investing and professional management money by the state will also drive down costs for participants and improve efficiency. The Secure Choice Plan could give small businesses the competitive edge they need to offer their employees retirement plans, an effective recruitment and retention strategy for any sized business.
Have your voice heard
In a recent AARP survey of small businesses, about three in five small business owners support a the proposed Minnesota retirement savings plan. To learn more about Secure Choice or how your business can get involved in making it a reality in Minnesota, email Audrey Britton, Small Business Minnesota public policy director or call her at (612) 807-0311.