Why Americans Need the SECURE Act

The president and chief operating officer of Nationwide Financial makes a case for how passage of the SECURE Act will improve Americans’ retirement security.

In an increasingly competitive economy, it’s time for Congress to pass the SECURE [Setting Every Community Up for Retirement Enhancement] Act to help small businesses provide their millions of employees a workplace retirement plan.

Small-business employees are the backbone of our communities and the American economy. Comprising over 40% of the American workforce, small businesses face challenges, such as retaining top talent in an ever-tightening labor market.

When it comes to recruiting and talent retention, 88% of small-business owners that offer a 401(k) plan to their employees say being able to do so is beneficial, and 84% say their employees view it as a necessary benefit, according to a recent Nationwide business-owner survey1. More importantly, 51% of workers over the age of 50 say an employer-sponsored retirement plan will be their main source of income in retirement2.

However, many small-business owners can’t provide a retirement plan due to costs, management requirements and complexity. This means the financial futures of almost half of the American workforce could be at risk because they lack access to these critical saving tools. We must do more to remove barriers for small-business owners who want to provide a plan to their employees.

Earlier this year, the Department of Labor (DOL) issued a rule to allow “association retirement plans (ARPs)”—a type of multiple employer plan (MEP). However, the rule’s narrow scope and limits on employer eligibility make it unlikely for ARPs to have any significant impact for most small businesses. Fortunately, the SECURE Act contains a provision that would eliminate the remaining barriers to open MEPs and provides a clear path for small businesses to pool their resources and offer retirement plans that are cost-effective and administratively simpler.

This is why Congress must pass the SECURE Act. The SECURE Act moves past the DOL’s rule to remove the association requirements, broadening the options for which employers can band together in a MEP. With fewer restrictions and more choices, employers will be able to find the MEP that best suits them and their business.

The SECURE Act levels the playing field between large and small employers when it comes to offering a workplace retirement plan, creating increased competition. In fact, a recent Nationwide business-owner surveyshows that 59% of business owners think the SECURE Act will have a positive impact on their ability to offer a 401(k), and 80% say passage of the act will let them offer a 401(k) plan that rivals those at large corporations.

To help ensure small-businesses’ needs are addressed and their employees are supported, Nationwide has been engaged with lawmakers on open MEPs, and other legislative reforms to the U.S. retirement system, for the past decade. We also advanced another provision to increase access to workplace retirement plans by providing small-business owners a financial incentive to offer their employees a plan. The SECURE Act provides for an annual tax credit, which covers up to $5,000 of plan costs for the first three years an employer makes a plan available.

Small-business owners are looking to Washington to ensure they—and their employees—can balance their financial needs of today while preparing for the future. Now is the time for the Senate to pass the SECURE Act and help small businesses offer the workplace retirement plans that are critical to their employees’ retirement security.

Nationwide Business Owners Survey, 2019 Survey Report/September 12, 2019

Nationwide Retirement Institute Consumer Social Security Public Relations Study, March 2019

3 Nationwide Business Owners Survey, 2019 Survey Report/September 12, 2019


John Carter is president and chief operating officer of Nationwide Financial.