Two recent Pew Charitable Trusts surveys found that smaller companies are less likey to offer retirement plans to their employments.  “At companies with five to 24 employees, 56 percent had no access to a retirement plan. At companies with 25 to 99 workers, nearly a quarter had no access.”  The big issue causing this lack of offering resulted in the costs of starting a plan and the work employees would have to undertake to set a plan up.

Currently, two new bills called the Retirement Enhancement and Savings Act have been introduced in Congress to help with these issues and allow “companies to jointly offer what are called multiple employer retirement plans, or MEPs.” If passed an MEP would allow companies “to save on administrative costs because there is one set of paperwork covering all of them. Lower costs also can mean a higher return on money invested in a plan.”

The bills would also increase the size of tax credits small businesses can earn through starting retirement plans like a 401(k).  These credits could be as high as $5,000.  Under the current law, the ceiling is $500.  “It would also allow companies to automatically enroll employees in retirement accounts, but staffers could choose not to participate.”

While there are retirement plans small businesses can implement currently, the two new bills offer a more flexible, expanded, and cost effective option than the Simplified Employee Pension or the Savings Incentive Match Plan for Employees.