Hello everyone,
Small business needs relief, even when good legislation comes into play
This week, a groundbreaking bill passed the Delaware House with bipartisan support and little fanfare.
The Delaware Earns Program brings the opt-out Individual Retirement Account program to Delaware for employers who do not have their own 401(k) savings-retirement plan. About a dozen states have similar programs.
The bill has broad support, with a few Republican small business owners in the House voting yes.
An employee covered by House Bill 205 has to opt-out of the 401 (k) that would set aside a couple of percentage points of one’s pay into the savings plan.
Backers offer the powerful argument that the bill deals with a savings gap that ends up costing Delaware taxpayers when older people without financial resources end up on state assistance programs.
Some see it differently.
The Delaware Restaurant Association argues that the program adds to human resource costs for the struggling industry and deprives workers of money needed right now.
The DRA has a point in one sense. The recent run of social equity legislation – including paid family leave and other measures in the pipeline that come from legislators without small business backgrounds – place a heavy regulatory burden.
With that said, Delaware Earns has more good than bad features.
We do know that opt-out retirement savings plans have a higher participation rate. Unfortunately, far too many people don’t like to deal with the paperwork and procrastinate or don’t realize their bleak future if savings do not begin early.
Another plus – the fiscal note accompanying the legislation shows modest costs when compared to the scores of state employees needed to administer the family leave bill.
Based on its legislative report, even the restaurant association appears to be OK with an opt-in program.
In the wake of these programs, legislators should offer relief and resources that help small businesses coping with paperwork.
A paperwork hassle business version of the $300 personal income tax rebate that just showed up in my mailbox is one quick and easy idea. Another is for the state to pay new employees to attend a financial education class that illustrates the grim reality of living paycheck to paycheck – Doug Rainey, chief content officer.
