Strengthening the pension opportunities for small businesses through privatized means has been a significant push in recent months by the National Conference on Public Employee Retirement Systems; a new report from the Government Accountability Office gives further weight to the organization's pension reform proposals.
The GAO's "Private Pensions: Better Agency Coordination Could Help Small Employers Address Challenges to Plan Sponsorship," suggests that ideas such as NCPERS' Secure Choice Pension - a public/private enterprise effort, modeled after a cash balance-styled defined benefit program and designed to supplement 401(k) savings and Social Security benefits - might be a step in the right direction.
NCPERS' survey of small business owners showed substantial support for the new, privatized pension notion, especially as only 14 percent of small businesses are able to sponsor retirement plans of their own.
Hank Kim, Esq., executive director and counsel for NCPERS - and author of the Secure Choice Pension proposal - said in a release that he was encouraged by the GAO's support of this and other notions of pension reform, especially for small businesses who do not have the resources for more complex defined benefit plans.
"The SCP is envisioned as a public-private partnership that would leverage the strength and expertise of public pension plans to create affordable, sustainable, and administratively simple multiple-employer pension programs for the private sector," Kim said.
The virtues the GAO identifies in those proposals – asset pooling to lower plan costs and portability of individual retirement assets – are just two of the benefits NCPERS’ proposed SCP would provide."
Kim and his organization say that a newly created public/private pension system could help close the estimated $4 trillion to $8 trillion retirement savings gap.