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Archived News Release--Caution: information may be out of date.

EBSA Press Release: Retirement Savings for Business Is Focus of Campaign by the Administration [06/02/1997]

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The Vice President today encouraged small companies to start pension plans for their workers. The U. S. Department of Labor and the U. S. Small Business Administration (SBA) along with the Department of Treasury jointly unveiled a 5-step plan to help small companies start pension plans for their workers as part of Small Business Week activities.

"There are more than 5 million firms with fewer than 100 workers, but only slightly more than 1 million of these small firms offer pension plans to their employees," said Secretary of Labor Alexis M. Herman. "Through our efforts, we not only want to educate employers on the importance of offering a retirement savings plan, but also want to show them that providing these plans can be easier than many business people think."

"Most small businesses want very much to offer retirement benefits in order to attract and retain top-quality employees," said Small Business Administrator Aida Alvarez. "Now that new, simpler retirement plans are available, the SBA will continue working with the Labor Department to let entrepreneurs know how best to accomplish this important goal."

Secretary Herman and Administrator Alvarez urged small businesses to take the following steps:

• Learn about retirement plan options for small businesses. Call the Pension and Welfare Benefits Administration's (PWBA) Publication Hotline at 1-800-998-7542 for information.
• Establish a plan. Consider one of the simpler retirement savings plans such as SIMPLE or SEP.
• For plans with employee contributions, encourage employees to participate and to contribute the maximum amount allowed.
• Make contributions for your employees, or, where appropriate, match your employees' contributions.
• Educate your employees about retirement planning and their investment options.

To assist small businesses in this endeavor, Herman introduced three new department publications describing various simple retirement options for small business:

• Simple Retirement Solutions for Small Business provides an overview of the retirement options available to small business employers;
• SIMPLE: Savings Incentive Match Plans for Employees of Small Employers details savings plans that allow employees to contribute a percentage of their salary each paycheck and permit their employers to match their contributions;
• SEPs: Simplified Employee Pension Plans discusses how employers can establish a simplified retirement plan that uses IRAs to hold contributions by using a model agreement developed by the IRS.

All three publications are available through the PWBA Publication Hotline at 1-800-998-7542 and Website at http://www.dol.gov/pwba/.

"Providing people with the information they need to make the necessary choices to save for retirement is part of the agency's larger effort to keep Americans informed about the importance of saving for retirement," said PWBA Assistant Secretary Olena Berg. "Three-fourths of the workers in larger firms have pensions, while less than one-fourth of workers for small businesses are provided with this option. We need to raise that figure."

In 1995, the Labor Department together with Treasury and various public/private partners launched the Retirement Savings Education Campaign designed to help change the way people think about and act on their retirement needs. As a result of new campaign partnerships, the American Savings Education Council was formed, now boasting more than 200 members whose mission is to raise public awareness about what is needed to ensure long-term personal financial independence.

Archived News Release--Caution: information may be out of date.