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Congress shouldn’t make it harder for small businesses to offer retirement plans

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It’s been said that if Congress kills the Department of Labor guidelines for state-based retirement plans for the private sector, then employers must step up to help address the nation’s retirement crisis.

I’m here to say it’s not that easy—especially for small business owners who actually want to offer their employees a retirement plan.

{mosads}I’ve spent the last 25+ years building and operating small businesses in Oregon. While I attribute my current retail business success and growth to my 11 loyal employees, I haven’t been able to provide them with a retirement plan for a couple of reasons.

First and foremost, I can’t afford the cost of establishing a 401(k)-style plan for my employees. Financial services firms do not offer affordable products to small employers like me because it is hard for them to make enough money from our small accounts. Just to set up an account, I would have to pay $1,100 or more per employee plus annual fees, and that amount is before any contributions are made or management fees applied. These high, upfront costs are one reason that small employers are frozen out of this marketplace. Also, these plans are very complicated for the average small employer to manage.

This is why I’ve been a strong supporter of OregonSaves—a program for people who do not have a retirement savings option at work. My store is even participating in the pilot program for this plan, which is projected to help a million Oregonians save for retirement.

Since its authorization in 2015, OregonSaves has helped to ease the retirement fears I have as entrepreneur. Like many business owners, I have been concerned about where my revenue was going to come from when I could no longer work.

I’m not the only one who thinks state-based private sector retirement plans are a great tool for small businesses. These plans have garnered support of small business owners across the country. Plans such as OregonSaves and the Maryland Small Business Retirement Savings Program and Trust offer small businesses an opportunity to recruit and retain good employees and compete with compensation packages offered by large companies.

According to the National Institute on Retirement Security, state-based retirement initiatives are also beneficial to Americans who work for small businesses. Only 38 percent of employees who work for employers with 100 or fewer employees have access to workplace retirement plans. Nearly half of our nation’s workforce doesn’t have access to an employer-sponsored retirement plan. What happens to those Americans when they can no longer work?

Considering the benefits and necessity of OregonSaves and similar plans, it’s disheartening to know Washington, D.C., lawmakers would introduce these resolutions to discourage states and cities from providing affordable retirement savings options.

These resolutions are yet another example of how federal lawmakers are trying to rig the rules even further against working families who want an opportunity to retire with dignity after a lifetime of hard work. They’re no favor to small businesses either.

You know entrepreneurs are constantly told by Republicans in Washington, D.C., that we’re the cornerstone of the economy. If they really believe this, then they should listen to us when we say that we support state-based private sector retirement plans.

While it’s true that business leaders should help to address America’s retirement crisis; we can’t do it alone. Now more than ever, it’s imperative that lawmakers put ideology and corporate interests aside and concentrate on solving this crisis that will place a serious strain on our economy as seniors are forced to rely on their families or public services for help.

These plans will also offer significant support to our businesses as research shows that people feel more comfortable about purchasing goods and services when they have reliable income.

Unless Republicans in Congress can come up with retirement plans that are better than those being created by Oregon, California, Maryland and other states, then they shouldn’t stand in the way of progress.

Saleem Noorani lives in Albany, Ore. He is the owner of the Cork & Bottle Shoppe.

The views expressed by this author are their own and are not the views of The Hill.


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