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After the blowup of Connecticut's attempt to launch a state retirement plan for employees of small businesses that lack one, the Chamber of Commerce in Southington is taking on the task for its own corner of the state by taking advantage of a Department of Labor rule change that lets it wade into the realm of association retirement plans.
According to a report in the Hartford Business Journal, the plan that is being offered by the Southington Chamber—which says it's the first chamber in New England to do so—will be run by Northshire Consulting and is the result of a rule change last September by DOL that allows chambers of commerce to offer a plan to businesses that are unrelated except by locale, rather than having to belong to the same industry or share some other commonality.
A multiple employer plan, or MEP, is also known under the Secure Act as a pooled employer plan, or PEP and must be administered by a pooled plan provider.
The Southington Chamber has some 300 members, and according to myRecordJournal.com, the potential for saving both money and administration time will be a lure to other member businesses and even non-Chamber businesses that either already offer retirement plans to their employees but don't because of the cost and time required to do so. In addition, it will relieve business owners of the fiduciary requirement.
Says the report, "Brian Williams, Northshire Consulting owner who will be running the chamber's plan, said a business with 25 employees and $2 million in assets could save about $6,000 annually by joining. Managing a retirement plan can take between 50 to 70 hours per year for employers."
As far as the efforts of Connecticut itself to launch a state retirement savings program, that at least appears to be in limbo at present. After a rancorous blowup of the efforts of the Connecticut Retirement Security Authority in the wake of Governor Ned Lamont's failure to provide further operating funds once its initial "seed money" ran out, Michael Walsh, the new chairman of CRSA's board of directors, said in a Hartford Courant report that he's looking into the potential of partnering with OregonSaves, Oregon's state-run retirement savings program for private-sector workers.
While nothing definite is in the works in that regard, Oregon, whose program launched in 2017 as the first in the nation, has said it's willing to partner with other states so that they too can offer their underserved employees access to an IRA.
So, while the Courant says that OregonSaves' director Michael Parker said in a Government Watch interview that the program has not yet been contacted by Connecticut, should that happen, he's willing to "sit down and say, OK, let's look at your program."
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
