Ending Federal Rule Permitting States to Establish Private Sector Retirement Accounts is Bad for California’s Small Businesses
Statement from Mark Herbert, California Director of Small Business Majority, on why a U.S. Senate vote to overturn a federal rule that enables states to establish retirement savings plans for private sector workers will harm small employers in California
We’re very disappointed the U.S. Senate today adopted HJR 66, which will overturn the U.S. Department of Labor’s rule allowing states to establish retirement savings plans for private sector workers. Striking down this rule will have a chilling effect on states like California that are establishing their own retirement savings programs, which in turn will harm California’s small businesses and employees.
Most small businesses lack the resources to set up an employer-sponsored retirement plan. In fact, 66 percent of the 7.5 million Californians who don’t have access to employer-sponsored plans work for small businesses with fewer than 100 employees. This is to be expected, since a mere 14 percent of small businesses are able to offer retirement plans. Small business owners unable to offer retirement savings plans know this puts them at a disadvantage in hiring talented workers and keeping their employees happy.
We also know that small business owners in California support state-sponsored retirement plans. Scientific opinion polling released by Small Business Majority and AARP found 73 percent of California small business owners said being able to offer a voluntary, portable, retirement plan would help them attract and retain top employees, and 66 percent of California small business owners support state legislation establishing a state-administered retirement savings program for the self-employed and small businesses with up to 25 employees.
California’s small employers need retirement savings options for their employees that make sense for their business and their bottom line, which is why they need a program like the California Secure Choice Retirement Savings Program. The Labor Department’s rule makes it easier for states like California to decide how best to serve our small businesses and private sector workers, and we urge President Trump not to sign this harmful measure.
About Small Business Majority
Small Business Majority was founded and is run by small business owners to focus on solving the biggest problems facing small businesses today. Since 2005, we have actively engaged small business owners and policymakers in support of public policy solutions, and have delivered information and resources to entrepreneurs that promote small business growth and drive a strong economy. We regularly engage our network of 55,000 small business owners along with a formal strategic partnership program of more than 150 business organizations, enabling us to reach more than 500,000 entrepreneurs. Our extensive scientific polling, focus groups and economic research help us educate and inform policymakers, the media and other stakeholders about key issues impacting small businesses and freelancers, including access to capital, taxes, healthcare, retirement, entrepreneurship and workforce development. Learn more about us on our website and follow us on Twitter, Facebook and Instagram.