CHARLOTTE, N.C., March 04, 2020 (GLOBE NEWSWIRE) -- LPL Financial LLC, a leading retail investment advisory firm and independent broker-dealer, today announced that small businesses and their employees stand to benefit greatly from the matching-contribution credit proposed in prominent Congressional bills, including bills introduced by Rep. Richard Neal (D-MA), Chairman of the House Ways and Committee, and Sens. Rob Portman (R-OH) and Ben Cardin (D-MD).
The bills provide an important tax credit for small businesses that automatically enroll their employees in a plan and provide much needed matching contributions. In a survey of LPL Financial advisors providing retirement planning services to small businesses, 89 percent of the advisors said that the proposed tax credit would increase the likelihood that a small business would adopt automatic enrollment and automatic escalation for their provided retirement plan, which are key drivers of employee plan participation. While beneficial to employees, greater participation increases employer costs through matching contributions. As noted by one advisor, automatic enrollment and automatic escalation “have a tremendous impact on employees of all ages and wages in the retirement landscape,” so this tax credit can provide widespread benefits.
“Cost and complexity are two of the main reasons why small businesses do not provide retirement plans to their employees,” said Peggy Ho, LPL executive vice president and head of Government Relations. “With insight from our financial advisors who serve small business owners every day, we are working to support legislation that enables access to retirement plan savings for small business employees.”
“I’m pleased to have the support of LPL for our work to encourage auto enrollment in the bipartisan Retirement Security and Savings Act,” said Portman. “We know from behavioral economics and practitioner data alike that incentivizing automatic enrollment has a truly impactful effect on encouraging more retirement savings and coverage. Section 101 of Portman-Cardin rewards small businesses willing to ensure their employees set aside significant savings for their retirement while offering a generous employer match, and sets a bold new standard that all of us—employers, participants, investment managers, and lawmakers—can aspire towards.”
“Improving retirement security means increasing retirement savings and the long-term participation of workers in the system. The evidence clearly shows that automatic enrollment provides a step in that direction by getting more people enrolled in plans for longer and saving more,” said Cardin. “It is why my bill with Senator Portman, the Retirement Security and Savings Act, includes a small business tax credit for automatic enrollment. This study provides further confirmation that such a credit would result in more small businesses choosing automatic enrollment and more workers getting access to retirement savings options.”
Download the full report to learn more about how LPL is promoting retirement security among small business employees.
About LPL Financial
LPL Financial is a leader in the retail financial advice market and the nation’s largest independent broker-dealer*. We serve independent financial advisors, professionals, and institutions, providing them with the technology, research, clearing and compliance services, and practice management programs they need to create and grow thriving practices. LPL enables them to provide objective guidance to millions of American families seeking wealth management, retirement planning, financial planning and asset management solutions.
Securities and Advisory services offered through LPL Financial, a registered investment advisor. Member FINRA / SIPC.
* As reported by Financial Planning magazine, June 1996-2019, based on total revenue.
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Lauren Hoyt-Williams
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Lauren.Hoyt-Williams@lpl.com
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