Presidential executive order could help small businesses participate in 401(k)s
Q&A with Brandon Longpublished in The Oklahoman | September 7, 2018
In a business Q&A with The Oklahoman, employee benefits attorney Brandon Long explained how a presidential executive order signed on August 31, 2018, may increase the number of small businesses that are able to offer qualified retirement plans, such as 401(k) plans, to their employees. The order specifically directs the U.S. Department of Labor and the U.S. Treasury Department to consider rules that would make it easier for small businesses to join together in “multiple employer plans.”
“Large employers are able to leverage their size to get better service and reduced fees from record-keepers and investment providers,” said Long. “Small employers often do not have access to the same service and pricing options. Conceptually, multiple employer plans allow unrelated employers to come together and collectively participate in one 401(k) plan and thus get the benefit of their collective size to get better service and pricing than they have access to now.”
This executive order comes as more welcome news to small businesses across the country, said Long. Earlier this year, the Department of Labor expanded access to affordable health coverage options for small businesses through the establishment of association health plans. AHPs work by allowing small businesses to join together through some sort of association – generally by geography or industry – to obtain healthcare coverage as if they were a single large employer.
“It looks like small businesses in Oklahoma may have more options available than they do now — as early as Jan. 1,” said Long. “This is very exciting. There should be more to come on this over the next few months as the details of these plans get finalized.”