With nearly half of America’s workforce, 78 million people, without a retirement plan, Prudential is advocating that Congress pass a law to include automatic IRAs and multiple small employer plans in the Pension Protection Act of 2006.
“The inclusion will help extend the benefits of the Pension Protection Act to all working Americans, regardless of the size of their employer,” Prudential said in a whitepaper that estimates 30 million people work for a company with 100 or fewer workers.
Thus, Prudential says the two different types of small-employer plans should be grouped together under the new title of Multiple Small Employer Plan.
“We believe that all working Americans should have the opportunity to participate in a workplace-sponsored retirement plan,” said Jamie Kalamarides, senior vice president, retirement solutions, at Prudential Retirement. “MSEPs would bring additional choice to the small business end of the market, allowing small businesses to choose the option that best meets their objectives and the needs of their workforce.”
Prudential argues that by allowing employers to pool their resources, they would have greater purchasing power and could reduce the administrative burden of offering a plan, which dissuades many small employers from offering a retirement plan.