Lawmaker Proposal Eases Plan Start up for Small Businesses

February 14, 2008 (PLANSPONSOR.com) - A Wisconsin Congressman has proposed a measure increasing small business incentives and reducing administrative requirements to start SIMPLE IRAs or 401(k) plans.

In a Web announcement, U.S. Representative Ron Kind (D-Wisconsin) said the Small Businesses Add Value for Employees (SAVE) Act of 2008 (H.R. 5160) would:

  • offer newly participating employers a tax credit for 50% of the plan start-up costs and a one-time $25 tax credit for every employee who is enrolled in the savings program,
  • create voluntary automatic IRAs for employers,
  • remove the higher penalty on early SIMPLE IRA distributions,
  • raise the annual contribution limit for SIMPLE plans to the same level as 401(k) plans, and
  • allow SIMPLE plan participants to roll over their retirement assets.

“A comfortable retirement is something everyone seeks to achieve – whether they work for a big corporation or a small business,” Kind said, in the news release. “But the majority of small businesses don’t offer any retirement savings plans to employees because it is often a complicated, costly, and a somewhat risky endeavor. This bill will actually incentivize small businesses to offer savings plans, allowing workers to accumulate retirement savings and helping small businesses attract and retain employees.”

A fact sheet on the bill is here

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