US Department of Labor Announces Rule to Strengthen Retirement Programs for Small Businesses

In August 2018, President Donald J. Trump issued Executive Order 13847, "Strengthening Retirement Security in America." The Executive Order called for the Secretary of Labor to clarify and expand the circumstances under which U.S. employers, especially small- and mid-sized businesses, may sponsor or adopt an ARP or Multiple Employer Plan as a workplace retirement option for their employees. The Department used its delegated authority under the Employee Retirement Income Security Act of 1974 to develop the rule.

Under the new rule, Association Retirement Plans, ARPs, could be offered by associations of employers in a city, county, state, or a multi-state metropolitan area, or in a particular industry nationwide. In addition to association sponsors, the plans could also be sponsored through Professional Employer Organizations (PEO). A PEO is a human-resource company that contractually assumes certain employment responsibilities for its client employers.

By expressly permitting these new plan arrangements, the rule enables small businesses to offer benefit packages comparable to those offered by large employers. The Department expects the plans to reduce administrative costs through economies of scale and to strengthen small businesses' hand when negotiating with financial institutions and other service providers. The final rule effective date is September 30, 2019.

For more information, contact SGIA’s Government Affairs Department at
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