Small businesses, chambers of commerce, associations and others across the country have spoken out about the benefits of being able to offer retirement benefits to their employee and what would happen if they no longer had that ability.
You can also watch videos of small business owners talking about how the proposed rule will affect their business.
"We started a small web development business 12 years ago in a county that has the 2nd most unaffordable housing prices in the state. As we look to grow our small team, we have had to think creatively about how to attract the experienced and skilled programmers we need, while competing against larger corporations for talent. Being able to offer retirement benefits is critical for businesses like ours to succeed and grow. The Department of Labor could put small businesses at a big disadvantage by making it harder and more expensive for them to offer these benefits. California is already a difficult place for small business owners to thrive. Please don't make it more challenging for us at the federal level."
Sarah and Scott Maggelet, Owners, Applynx Website Solutions (San Luis Obispo, CA)
"The rule will also limit individual investors’ ability to seek access to affordable financial planning services and resources – even if those services and resources are in the saver’s best interest."
Bill Thornton, President and CEO, Fort Worth (TX) Chamber of Commerce
I founded Computer Solutions Group, Inc. (CSG) 16 years ago to help small and medium-sized businesses manage their information technology to enable them to be successful and grow. In order for my company to stay innovative and ahead of the curve, I must attract and retain the best and the brightest in the technology field. This means I am competing with many of the big guys in California. To make sure I have a shot at getting the talent I need, we must offer competitive benefits. This can be a challenge with only 25 employees. Now, it sounds like the government is trying to make it even harder for me to offer retirement benefits to my staff. My staff is the best— they have a passion for technology and helping others and I want to make sure I can take care of them. If the Department of Labor finalizes a rule that inhibits my ability to provide retirement benefits or my employee’s access to educational information, it would make it more difficult for entrepreneurs to grow their businesses. In an era where the government should make my job as a small business owner easier, they are doing the exact opposite.
Scott Spiro, President & CEO Computer Solutions Group (Los Angeles, CA)
"I started my business 11 years ago and now employ 40 people. Our employees are our family, which is why I began offering a 401k benefit about five years ago. It’s proven to be popular and helped me attract great people to work here, as well as made it easy for them to save for the future. As someone that’s run a business for over a decade, I can tell you that the list of illogical Labor Department rules is long, but this “fiduciary” rule tops them all. Adding more steps for people to save? That’ll mean less money for retirement. Making it harder to provide financial education? That’ll leave our employees in the dark. Increasing the cost of our retirement plan? That’ll mean fewer people participating. Putting small business at a disadvantage in the name of safeguards? That’s paternalistic. Giving me even more paperwork to sign? That’s a step too far. The Labor Department should just fix this rule already."
Richard Schneider, Owner, Antennas Direct (Ellisville, MO)
"As the person responsible for human resources at my company, I know all too well how important retirement benefits are to attracting and retaining the best employees. I’ve also seen firsthand how employees have used our 401(k) to save and plan for their future. One of my goals has always been to increase the number of people that take advantage of that opportunity and benefit. Unfortunately, getting people to start saving for retirement is not always easy—especially at a small business like ours. I’m worried that the Department of Labor will discourage even more people from saving by increasing the cost of our plan, which will only make it harder for businesses like mine to keep offering retirement benefits to their employees."
Jacqueline Turner, Human Resources Director, SmarTechs (Chicago, IL)
"As the owner of a successful, growing small business with sixteen employees. The ability to provide great workplace benefits is both personally important to me and a key factor in my ability to attract the highest quality people that can help my company grow. I am not a finance expert, nor are my employees, so I rely on the information and advice I receive from my advisor in order to make the best decisions for my employees and incentivize them to save for retirement. It’s disappointing that the Department of Labor seems so set on pushing a rule through that would hit businesses like mine the hardest. This fiduciary rule will ultimately discourage my employees from saving by making it more expensive. We can all agree that encouraging retirement savings should be the goal, so let’s not do something that will have the opposite effect."
Rachel Doba, President, DB Engineering (Indianapolis, IN)
"I have been in business for the past 29 years manufacturing gear for the military market. We have always pride ourselves on providing an outstanding benefit package to our employees that includes a retirement savings plan. The long term success of this benefit requires advice from professional investment advisors. Investing is very risky and professional advice is essential. This rule would put a significant burden on small businesses and their employees, making it less likely that we will be sufficiently prepared for retirement."
John Raine, President, Raine Inc. (Anderson, IN)
"In my line of business, controlling costs is critical to keeping the company running, and growing over time. Despite the pressure to cut costs, I continue to offer a 401k plan as one of several benefits for our employees – because it’s the right thing to do. The participation rate in our plan remains high because I always stress to my employees the importance of planning for their financial future and try to give them the resources to make smart decisions. DOL may have the right intention with this proposal, but I’m worried they’ll still get it wrong in the end. If you’re another small business owner and reading this, I hope you take the time to call your Congressman and ask them to make sure DOL doesn’t put small businesses and our employees at a disadvantage."
Gary Marowske, Owner, Flame Furnace (Warren, MI)
"As a company, we feel it’s important to invest in our employees by offering not only a way for them to save money for the future, but also helping them reach their goals by matching contributions to their retirement plan. However, many of our employees are in their 20s and 30s, and don’t recognize the importance of saving now for retirement later. The federal government should be more focused on trying to help young people entering the work force to start saving – period. This rule will only make it more confusing. They have to get this right, or risk discouraging more people from even taking the first step toward retirement savings."
Jeff and Susan Sams, Owners, Sams Carpet Cleaning & Repairs (St. Charles, MO)
"I currently offer access to retirement savings plans as part of our benefit package to my employees and it is a HUGE benefit. If it starts to cost more to offer the plan those costs would be passed on; therefore, employees would unfortunately save less, not save enough, or be as easy. Worst of all, we may lose employees in a very tight job market. My employees are extremely satisfied with the way it is... There is no need to have the government interfere more in this area."
Russ Bennett, President, Bennett Office Technologies Inc. (Willmar, MN)
"The new rules will make it harder for good advisors to provide generally accepted fiduciary best practices and make it easier for dishonest advisors to hide their mendacious activities."
Donald B. Trone, Founder and CEO, 3ethos (Mystic, CT)
"I am a proud small business owner who has been successful despite the recent economic downturn. Part of our winning formula is the ability to compensate our employees with retirement plans and low-cost investment advice. I am afraid, however, that the DOL's new 'fiduciary' rule will cut them off from receiving critically important investment education and materials on investment options. If that happens, my employees will be left in the dark with little or no guidance on how best to invest their savings."
Todd Ewing, Company Founder, Federal Title & Escrow Company (Washington, DC)
"These small business stakeholders report that the proposed rule will likely increase the costs and burdens associated with services smaller plans sponsored by small business employers. Small business owners expressed concerns that the proposal could limit financial advisers’ ability to offer savings and investment advice to clients, such as suggesting options for an IRA rollover. These small businesses stakeholders report that the proposals could ultimately lead advisers to stop providing retirement services to small businesses."
Claudia Rodgers. Acting Chief Counsel, and Dillon Taylor, Assistant Chief Counsel, SBA Office of Advocacy
"Depictions of the present environment as providing “caveat emptor” freedom to broker-dealers to place investors in any investment that benefits the firm financially with no disclosure of their financial incentives or the risks of the product are simply not true, nor are they an accurate starting point to justify a new standard of care."
Richard Ketchum, CEO, Financial Industry Regulatory Authority
"Proving that the nanny-state is alive and well, DOL is proposing to substitute its judgment for that of investors…"
Dan Gallagher, Commissioner, Securities & Exchange Commission
"Quite simply, this rule will raise product costs, reduce consumer choice, and limit access to professional advice for retirement savers that need it the most—from excessive disclosure and data keeping requirements to provisions that prevent small businesses from providing their employees with affordable retirement savings vehicles."
"This rule will significantly limit my ability to provide educational information, professional financial advice, and critical savings products to retirement savers that need them the most."
Life Insurance Professionals
"You’re going to lose choice for investors and it will be a real mess. ...This is a total gift to the plaintiff’s bar."
Dan Gallagher, Commissioner, Securities & Exchange Commission
"If the Proposal were adopted as is, many broker-dealers will abandon these small accounts, convert their larger accounts to advisory accounts, and charge them a potentially more lucrative asset-based fee. They will do so largely because of the BICE constraints on differential compensation, the ambiguities in the best interest standard, the lack of clarity concerning various conditions, the costs of compliance, and uncertainty about the consequences of minimal non-compliance."
Marcia E. Asquith, Senior Vice President and Corporate Secretary, Financial Industry Regulatory Authority (FINRA)
"The proposal would effectively limit or deny access to guaranteed income products that are increasingly important to millions of Americans who no longer have access to a traditional pension."
James H. Szostek, Vice President, Taxes & Retirement Security, American Council of Life Insurers
"You hear Perez out saying [DOL has] met substantively nine times with Chair White, our staffs have been coordinating, and yet they pump out a reproposal that doesn't mention the SEC at all."
Dan Gallagher, Commissioner, Securities & Exchange Commission
"I have been a small business owner for over 30 years, since opening my doors in 1983. Today, I employ 25 people that are the heart and soul of my business. Anyone that runs a business knows how competitive it is out there, especially the competition to hire the best people. As someone that decided to set-up shop in a popular vacation spot, I’m competing for talent with the big boys—the established resorts that have very comprehensive benefits. Making sure my employees have access to equal, if not better benefits, is my #1 goal. So I don’t understand why the Department of Labor is proposing a rule that treats the retirement plan I offer my employees different than the ones the resorts can offer. In an ideal world, my business would be treated fairly and my employees would have access to more savings options. That doesn’t seem to be the Labor Department’s world. I hope Congress can help change their mind and fix this rule so it helps small businesses like mine in the long run."
Patricia Owen, Owner and President, FACES Day Spa (Hilton Head, SC)
To read an op-ed by Patricia published in The State, click here.
To read more about Patricia's story, click here to read an article on Above The Fold.
"The more I learn about the Labor Department’s rule, the more nervous it makes me about how it will impact my business and my employees. In the past, we were dropped from our both our life insurance and our short- and long-term disability plans because our small business – nine full-time employees – wasn’t big enough to sustain them. I’m very anxious that is exactly what’s going to happen here with our retirement benefits. If this rule is implemented, can we keep our plan? Will our costs go up? I’m just not sure, and the Labor Department isn’t offering any reassurances."
Jamie Tridico, Physical Therapist and Owner, Advanced Physical Therapy (Charleston, WV)
"When we first opened our dental practice five years ago, we knew that in order to hire the best people to support us, we needed to provide good benefits that helped make their lives easier. Retirement savings options have always been key to that philosophy, because we realize how important it is for people to save for retirement, and how a workplace plan could make doing so simpler and less costly for everyone. Several years ago, we established a 401K and have been pleased to see many of our employees take advantage of it. However, we would love to see more participation—especially since we have a such a young workforce. We were kind of shocked to learn how small businesses like ours are treated unfairly under DOL’s proposal and are worried it could cause even fewer of our employees to set money aside."
Dr. Colin Holman and Dr. Natalie Frazier, Owners, Dental Expressions (Oklahoma City, OK)
To read an op-ed by Dr. Holman and Dr. Frazier published in The Oklahoman, click here.
"Being able to offer a retirement account for my employees provides them with a means to save money for retirement and to get competent advice without having to pay a large fee. I'd be upset if we lost access to a financial professional to help administer our plans. It's hard to find someone you can trust. Having access to a financial advisor without paying a large fee helps people making less than $100,000 a year."
Howard M. Rosenblatt, H. M. Rosenblatt, Attorney-at-Law, P.A. (Gainesville, FL)
"Small businesses will be at a disadvantage without the ability to offer employees a competitive retirement savings package."
Trey Grayson, President and CEO, Northern Kentucky Chamber of Commerce
"At Uproar PR, our employees are our product. Making sure our employees thrive means building a great culture and providing the best benefits. Retirement benefits are one of the ways we put our employees’ future at the forefront, so a couple years ago we set up a SIMPLE IRA plan. People love it and it’s proven to be a great way to get people to save for their future. The DOL retirement rule is going to make it harder for people at small businesses like ours to save for their future. Our #1 priority is to make sure our employees have everything they need. Congress should make sure that is DOL’s priority too."
Mike Harris, Co-Founder, Uproar PR (Orlando, FL)