Donald Trump orders new regulations to help small businesses join together to offer retirement plans. He also complains about dishonest reporting after his private comments about critical trade negotiations with Canada were published. (Aug. 31)
WASHINGTON – President Donald Trump signed an executive order Friday to make it easier for small businesses to offer retirement plans that may also let Americans keep more retirement savings sheltered from taxes.
Speaking in North Carolina, the president said the order directs the Labor and Treasury departments to review regulations that make it harder for small companies to band together to set up retirement plans.
Only about half of businesses with fewer than 100 employees offer retirement plans, exacerbating what some describe as a crisis in retirement savings. Allowing small companies to pool investments would lower their costs.
“They’ll be banding together,” Trump said. “They’ll have such strength.”
The idea has broad bipartisan support on Capitol Hill, though some experts warn that the details of the administration’s plan will be important. The regulations that make it difficult for separate businesses to set up a single retirement plan exist to ensure there is oversight and transparency in those plans.
Monique Morrissey, an economist at the Economic Policy Institute who studies pensions and retirement, said that in principle opening up the plans for more businesses is widely supported but that it is hard to say what the practical impact will be until the administration provides more detail.
Federal agencies will need months before proposing the details of its plan, White House aides said.
Aliya Wong, director of retirement policy at the U.S. Chamber of Commerce, said the group had long sought fewer regulations for the so-called multi-employer plans.
“Businesses will now be better equipped to compete for talent,” Wong said, “and workers will have greater retirement security.”
Another section of the president’s order dealing with 401(k) drawdowns has received more criticism. Retirees currently must begin withdrawing a minimum amount of money from their tax-free retirement accounts when they turn 70 and a half.
The Trump administration wants to lower that minimum amount, which would permit retirees who don’t need the money to shield it from taxes.
“What they’re doing is just giving a tax break to the wealthy,” Morrissey said.
Richard Fiesta, executive director of the Washington-based Alliance for Retired Americans, opposed the idea.
“We do not need yet another scheme that allows wealthy Americans to shelter more of their retirement savings from taxes,” Fiesta said. “We also do not need to create new ways for investment brokers to make money.”
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