A bill before Congress seeking to increase retirement savings among workers will unnecessarily overburden small employers, according to a new report from
The
Although Aite Group calls the government’s efforts a “noble charter,” a problem with the current bill is that the processing procedure for the proposed plan would require employers to make many small monthly payments that could prove to be “unduly onerous.”
Instead, Aite proposes that by integrating the IRA savings into the annual tax refund process, the number of payments would be reduced by 12. Participants would then see “the direct tax benefit of saving for their retirement, and eligibility for tax credits would be directly integrated into the process.” This solution would eliminate the operational burden on employers, and also save the government $500 in tax credit per employer.
The report also lists three financial services firms that are positioned to participate in the program with minimal changes to their existing businesses: