Bipartisan legislation that would allow small businesses to more easily access SIMPLE retirement savings accounts for their employees was reintroduced Wednesday by Sens. Susan Collins, R-Maine, and Mark Warner, D-Va.
SIMPLE (Savings Incentive Match Plan for Employees) retirement plans were created in 1996 as a lower-cost alternative to traditional 401(k) accounts. The SIMPLE Plan Modernization Act would permit employers with 100 or fewer employees to create SIMPLE savings accounts if they do not sponsor another retirement plan and increase the contribution limit to $16,500 from the current $13,500 for employers with 25 or fewer employees. Those with 26 to 100 employees could adopt the higher contribution limits, with some limits.
The legislation also directs the Treasury Department to report to Congress on the use of SIMPLE plans.
Ms. Collins and Mr. Warner have introduced similar legislation in the previous two sessions of Congress, most recently in 2019.
"Increasing access to employer-sponsored retirement plans is one way to improve Americans' financial security, yet approximately two out of every five Mainers in the private sector lack access to a retirement plan at work," Ms. Collins said in a news release. "The SIMPLE Plan Modernization Act is a win-win proposition that helps small businesses enhance their employee benefits and assists workers with taking steps to save for retirement."
