Almost all of the business owners Empower Retirement surveyed said the biggest advantage in offering their employees a retirement plan is “it’s the right thing to do.” Additionally, 59% of employers cited employee retention and attracting talent as leading factors.

However, among the top reasons why small businesses don’t offer a retirement plan to employees is because their company is too small, survey respondents said.

High costs and lack of administrative capacity are the top two reasons employers cited for not offering a retirement plan to workers, according to research by the Pew Charitable Trusts.

The DOL said it expects the new open MEP rule to allow small businesses to overcome those hurdles for the following reasons:

• It will reduce costs for items such as investment management and record keeping which will flow from the pooling of assets.

• It will provide simpler and less-expensive plan administration, since employers wouldn't need to undergo individual 401(k) audits or file their own IRS forms for the plan.

• It will reduce fiduciary liability, since the employer would no longer technically be "sponsoring" the retirement plan.

The rule goes into effect September 30. 

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