Legal

No question the new Pension-Linked Emergency Savings Account is a much-needed option for employees, however, employers and plan sponsors must be vigilant in protecting themselves as they navigate potential pitfalls.

In a letter to House Ranking Member Richard Neal, over 20 companies and industry trade associations expressed support for the Automatic IRA Act of 2024, which will provide more access to retirement plans for small businesses.

The new law bolsters small businesses' ability to provide retirement benefits to their employees by offering tax credits to offset costs, however, for advisors, it's an unprecedented opportunity to tap into a new revenue stream.

Small businesses often work with professional employer organizations for certain HR functions, and when they're involved in an M&A transaction, the parties will need to work through a variety of issues.

"The broad-reaching new fiduciary rule regulates retirement accounts far beyond employer-sponsored benefits," said subcommittee Chairman Rep. Bob Good, R-Va., but proponents said the old rules no longer protect investors.

The Employee Benefits Security Administration (EBSA) recently announced that about half of the $1.4 billion amount came from enforcement actions ($844.7 million) and 30% came from informal complaint resolutions ($444.1 million).