US. Trump takes a first step to boost retirement security
President Donald Trump recently issued an executive order aimed at strengthening retirement security in America. It’s a step in the right direction, but tackling two additional issues would truly address the pressing needs of working Americans who want to save for retirement.
Mr. Trump’s Aug. 31 order directs the Department of Labor and the Department of Treasury to encourage the adoption of multiple employer plans (MEPs), which allow small employers to pool resources and costs to offer retirement plans to their employees. This is good news, given that only about half of all workers are covered by a retirement plan at work. Research shows that having one significantly boosts workers’ accumulation of retirement savings.
MEPs also represent a way for the private sector to better address the needs of working Americans. A mutual fund company, bank or insurance company could develop and offer an MEP that unrelated employers could adopt to cover their employees. The financial institution could take care of all the administrative steps that often create significant hurdles that may stop small employers from adopting retirement plans. Among them are the plan’s design, investment options and administrative paperwork.
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