Labor Department Takes Significant Step to Reduce the Cost of Retirement Plans for Small Manufacture
Earlier this year, President Trump issued an executive order requiring the Department of Labor (DOL) to take steps to reduce the cost of offering retirement benefits. The DOL released a proposed rule to implement the executive order and enable small businesses to join with industry or local partners via a business association to offer retirement benefits to their employees.
A manufacturer that wants to offer their employees retirement benefits must address substantial administrative costs associated with such plans, which makes it difficult for small businesses to offer these benefits. In fact, less than half of American workers at companies with fewer than 50 employees have access to a workplace retirement plan.
The DOL’s proposal would reduce costs by allowing small businesses to come together through a trade association or local business group to offer a single retirement plan, thus benefiting from economies of scale.