A group of business associations told Congress that small business workers are having trouble saving for retirement. The solution: plans that can be used by more than one company.

The AARP, the U.S. Chamber of Commerce and the American Benefits Council told a Congressional panel Wednesday that such multiple-employer plans, or “MEPs” offer economies of scale on investments and administrative costs, and that these are key to expanding retirement savings to small business workers.

“MEPs offer an attractive and cost-efficient alternative for small businesses for which a stand-alone 401(k) plan is not feasible,” said chamber board member Scott Anderson.

Such plans achieve administrative savings, he said, because one administrator, trustee and named fiduciary can act for an entire plan. He added that such plans can save more because they have centralized payroll, one investment lineup and one annual report and audit for the entire plan.

Anderson said the plans could be offered by state chambers, trade associations and other organizations that work with small businesses.

David Certner, the AARP’s legislative policy director, said federal efforts could complement efforts by the states to develop auto-enroll retirement plans for employees at small businesses. The AARP believes MEPs can be made to work with the right development and support in Congress by both parties, he said.

For MEPs to work, Certner said Congress and the Department of Labor should establish licensing, bonding, reserve and insurance standards for them. In addition, there should be clear rules for an employer or MEP to file plan documents and financial statements with participants and government agencies.

Lance Schoening, speaking for the American Benefits Council, said that while auto-enrollment is the norm for large companies in retirement plans, the feature is significantly underused by small businesses.

Even among the quarter to a third of smaller employers who do have auto-enrollment, it is often weakened by the low default savings rate (of 3 percent) and the fact that there is no auto-escalation.

Michael Enzi, a Republican from Wyoming who chairs the Senate subcommittee on retirement security, said MEPs could make retirement plans less expensive and less intimidating for small businesses.

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