Linda Sánchez’s Legislation to Assist Small Businesses in Offering Retirement Plans to Employees Passed in Ways and Means Committee

April 2, 2019
Press Release

Washington, DC – The Ways and Means Committee today unanimously passed legislation which includes H.R.982, a bipartisan bill authored in the House by U.S. Representative Linda Sánchez (D-CA) along with Congressman Phil Roe (R-TN), to reduce costs for small businesses looking to offer retirement plans to their employees. H.R.982 is part of H.R.1994 - the Setting Every Community Up for Retirement Enhancement Act – or the SECURE Act

The legislation was also introduced in the Senate, S.354, by U.S. Sens. Mark R. Warner (D-VA), a member of the Senate Finance Committee, and Susan Collins (R-ME), the Chairwoman of the Senate Aging Committee.

“Too many Americans simply aren’t putting enough money away to be able to afford a secure retirement. By helping more small businesses provide workplace retirement plans we can give millions of hardworking families more financial peace of mind,” Congresswoman Sánchez said. “I’m proud to have led the fight to make it easier and less expensive for small businesses to establish retirement plans for their workers. Our goal today as a committee is to strengthen access to retirement security for hardworking Americans, and I’m proud to have contributed a piece to this puzzle.”

H.R.982 directs the Department of Labor (DOL) and the Treasury Department to allow employers and sole-proprietors participating in retirement plans administered in the same way to file a single aggregated Form 5500, a required annual return that provides important compliance information to DOL and Treasury.

Under current law, despite sharing a common administrative framework, each plan is still required to file a separate Form 5500 to satisfy reporting requirements under the Employee Retirement Income Security Act and the Internal Revenue Code. Today’s proposal will eliminate duplicative reporting by plan administrators, which will reduce costs for small businesses that maintain retirement plans. To file an aggregated Form 5500, the retirement plans would need to have the same trustee, fiduciary, plan administrator, plan year and investment menu.

The self-employed, including sole proprietors and small business owners, are the most likely to establish a retirement savings plan that would benefit from and meet the requirements necessary to file an aggregated Form 5500. According to 2016 survey findings from the Transamerica Center for Retirement Studies, in collaboration with Aegon Center for Longevity and Retirement, only one-third of self-employed respondents indicated that they make sure they are saving for retirement.

To provide DOL and Treasury time to implement this change, this bill has an effective date of no later than January 1, 2023. A copy of the legislative text is available here.