As part of America Saves Week, the U.S. Department of Labor’s Employee Benefits Security Administration will host a free webcast for small business owners talking about choosing a retirement savings plan and helping employees save for retirement.
The webcast, which will be held from 2 to 4 p.m. EST on Thursday, Feb. 23, is held in conjunction with the Consumer Federation of America. It will discuss how to choose a retirement plan and the use of direct deposit for a retirement plan.
The DOL will be joined by the American Institute of Certified Public Accountants to discuss retirement savings options available for small businesses. The webcast will provide practical information and helpful tips to understand and compare options and to start and operate a retirement savings plan. The options not only provide an effective way to save for a secure retirement but most also provide tax advantages for both employers and employees, according to the Department of Labor.
The Consumer Federation of America and NACHA–the Electronic Payments Association will focus on direct deposit as a way to simplify employees’ ability to build savings for retirement at work and build stronger financial futures.
The webcast falls in line with the retirement options proposed in President Barack Obama’s 2013 Budget plan. According to Obama’s proposal, 78 million working Americans, or about half the workforce, don’t have employer-based retirement plans. The budget proposes a system of automatic workplace pensions that will expand access to tens of millions of workers who currently lack pensions.
Under the proposal, employers who do not currently offer a retirement plan will be required to enroll employees in a direct-deposit IRA account that is compatible with existing direct-deposit payroll systems. Employees may opt out if they choose.
To minimize the burden on small businesses, those with fewer than 10 employees would be exempt from the rule. Employers also would be entitled to an additional credit of $25 per participating employee, up to a total of $250 per year for six years.
To make it easier for small employers to offer pensions to their workers, the plan also would increase the maximum tax credit available for small employers establishing or administering a new retirement plan from $500 to $1,000 per year. This credit would be available for four years.