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Congress is considering a bipartisan bill (the Retirement Enhancement and Savings Act, or RESA) that would encourage more SMEs to offer retirement savings plans. Under the plan small businesses could band together to offer multi-employer plans (bringing down average costs for each employer), and shift some of the fiduciary duty from the SME to the firm that administers the multi-employer plan. The bill would also encourage defined contribution plans to offer annuities that provide guaranteed income in retirement
To encourage more plan sponsors to take the plunge, the bill gives those that follow certain procedures some protection from future lawsuits when selecting an annuity provider. It also expands a tax credit available to small companies to offset the costs of starting a new retirement plan. The annual credit amount would increase from $500 to as much as $5,000 for three years. A bipartisan group of senators on Tuesday is slated to introduce separate legislation that would shift some of the fiduciary responsibility from small employers that band together in a multiple-employer plan to the financial services firm that administers the MEP.
