If small businesses were to freeze or terminate their existing retirement plans, it could have a serious impact on the retirement prospects for the approximately 48% of the American labor force who are employed by small businesses- According to 2015 Census Data
With retirement security becoming an increasing concern for Americans, LPL’s Government Relations team advocates that now is not the time to cut incentives to save. LPL believes the proposed changes would negatively impact the ability of small businesses to offer retirement plan savings and employees’ ability to save for a successful retirement.
Supporting LPL’s position are the findings from a survey the firm conducted with 135 LPL advisors—those who manage more than 1,600 small business 401k plans with more than $5 billion in assets—to further understand the potential impact of the proposed policy changes to advisors and investors.
The survey’s results demonstrate that advisors believe the ability to make pre-tax contributions can be an incentive that encourages small businesses to adopt and maintain retirement plans. Advisors also believe that tax deferral can be an important incentive that encourages employees to save.
Among the survey’s key findings:
Concerned that tax reform such as Rothification will continue throughout future policy debates, LPL is actively lobbying policymakers in order to preserve and enhance incentives for retirement savings to provide more Americans the ability to achieve a successful retirement. Read more about the LPL Government Relations team’s advocacy work.
Read LPL’s research report, The Small Business Retirement Savings Challenge, on the importance of small, reasonable tax incentives in motivating small business to adopt and enhance retirement plans.
For advisors serving 401k plans, learn more about LPL’s enhanced support and services available to advisors serving 401k plans.