Efforts to expand smaller employers’ access to retirement plans are gaining some traction in Congress, according to Sen. Chuck Grassley. 

Grassley, Iowa’s senior senator and chair of the Senate Finance Committee, was the concluding speaker late this morning at the Global Insurance Symposium, as the three-day conference wrapped up in downtown Des Moines. 

A centerpiece of legislation that Grassley introduced earlier this month, the Retirement Enhancement and Savings Act of 2019, is to allow unrelated employers to band together to form joint retirement plans. Under current law, only employers with a common bond may form joint plans. 

(Shortly after noon, the Employee Benefit Research Institute released results of a new survey that found the confidence of both U.S. retirees and workers in having a comfortable retirement is at an all-time high, rebounding to 2005 levels. See story below.) 

“It’s clear that we need to improve our retirement system,” Grassley said. “The system hasn’t kept pace with changes in the economy, changes in the workforce conditions, or with changes in the retirement environment. We need to expand access and participation in retirement plans, particularly for smaller businesses. We also need to expand the system to bring in independent workers and those who work in the so-called on-demand economy. 

“At the same time, we need to make sure workers can transition smoothly into retirement,” he said. “We need to make sure these people have access to savings that they have worked so hard to put aside for retirement.” 

Grassley cited a recent study by the Pew Charitable Trust that found 40% of employees of smaller businesses don’t have access to retirement savings programs. Additionally, the Federal Reserve Board’s latest Survey of Consumer Finances found a similar gap, he said. 

The primary reason small businesses frequently shy away from offering plans is that they’re time-consuming and costly to establish and maintain, Grassley said. 

The RESPA Act legislation would also enable these joint plans to share some of the administration costs with the third-party administrators of the plans to make them more affordable to small businesses, he said. Additionally, the bill would eliminate the “one bad apple rule” that can disqualify an otherwise compliant plan if one bad actor is found. 

“These common-sense changes would make it far more feasible for small businesses to offer retirement plans,” Grassley said. He encouraged the financial services professionals attending the conference to provide their input “because you know what works and what doesn’t.”  

Grassley said he’s looking forward to working with the House Ways and Means chairman, Rep. Richard Neal, D-Mass. — who introduced a similar bill in the House — to reconcile those pieces of legislation.