LPL Lobbies to Increase Retirement Plan Access for Small Businesses
Starting and maintaining a retirement plan can be a major undertaking for small businesses, and it can also be a huge expense. An LPL study with small business owners showed that cost and complexity are, in fact, the biggest factors preventing small business owners from offering a retirement plan to employees.
Given that, changes made earlier this year to the Internal Revenue Service’s Employee Plans Compliance Resolution System (EPCRS) have added to the barriers existing for small business owners. The changes to one of the EPCRS policies brought a sharp increase to fees in cases where a small business wants to correct an inadvertent violation of one of the complicated IRS rules governing its retirement plan. These changes have caught the eye of those who advocate for increasing access to retirement plans for small business owners and their employees, which includes various lawmakers as well as LPL.
Congressman Richard Neal, a Democrat from Mass., said, “It is critical that we provide solutions that improve compliance, eliminate onerous penalties for inadvertent mistakes and remove barriers to broader retirement coverage.”
LPL supports Congressman Neal’s stance, and the firm’s Government Relations team continues to lobby in Washington to address this issue by allowing more inadvertent violations to be self-corrected without any fee or submission to the IRS. LPL has also reached out to nearly 400 advisors to get their feedback on the impact of these changes to their businesses and employees.
Download the full report to learn more about this issue and what LPL advisors say they need.
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 401(k) plans, learn more about LPL’s enhanced support and services available.