Senator Maggie Hassan (D-NH). Photo: Diego M. Radzinschi/ALM
SECURE 2.0 has bolstered small businesses' ability to provide retirement benefits to their employees by offering tax credits to offset the cost of plans while simplifying administrative processes. Now, a new bipartisan bill, Retirement Investment in Small Employers (RISE) Act, can further boost retirement benefits for these employers by fully covering the administrative costs of starting a plan.
Senators Maggie Hassan (D-NH), who serves on the Senate Finance Committee and the Senate Health, Education, Labor and Pensions (HELP) Committee, and Ted Budd (R-NC) reintroduced the bipartisan legislation to cut taxes for small businesses with fewer than 10 employees that create retirement accounts for their employees. The current tax credit that helps small businesses pay for the costs of starting retirement plans for employees is often insufficient for the smallest businesses, as the tax credit is provided on a per-employee basis.
Recommended For You
This new legislation would increase the tax credit certain small employers are permitted to use to cover the start-up and administrative costs of setting up a defined contribution plan, ensuring that small businesses with under 10 employees can receive at least a $2,500 tax credit to help pay for the costs of creating retirement accounts.
Similar legislation was introduced in the House by Rep. Claudia Tenney (R-NY), who sits on the House Ways and Means Committee, and by former Rep. Dan Kildee (D-MI) in 2023.
“Small businesses … need to be able to compete with larger ones,” said Senator Hassan. “Especially as small businesses continue to face rising costs, this bipartisan legislation will provide small businesses with the tax relief that they need to be able to offer good retirement plans to their employees, helping both business owners and workers build financial security for the future.”
“America’s small businesses are the foundation of our economy and at the forefront of job growth,” said Senator Budd. “By equipping Main Street with the means to offer retirement plans, we are not only helping to create a pathway to financial security for millions of workers, but also laying the foundation for long-term economic growth … to ensure retirement plans are within reach for hardworking Americans.”
The RISE Act raises the floor for the existing $250 per-employee tax credit available to small businesses to create retirement plans, ensuring that all small businesses can receive a tax credit of at least $2,500. These tax cuts will help small businesses that have fewer than 10 employees offer retirement savings options to their employees.
Related: ‘Micro’ 401(k) plans will grow to more than 1 million by 2029: Cerulli
In 2024, Sen. Hassan helped pass SECURE 2.0 into law, which permitted an employer that is not sponsoring a retirement plan to offer a Starter 401(k) Plan, which does not require an employer match. She also helped secure included measures to enable more businesses to join multiple employer plans (MEPs), expand tax cuts to small businesses that provide retirement benefits to their employees, increase retirement plan flexibility for public safety officers, and improve access for military families.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
