The Kentucky Chamber of Commerce has signed a letter to Congress expressing the business community’s opposition to the U.S. Department of Labor’s final rule on the Definition of a Fiduciary. The rule unfairly disadvantages small businesses by establishing new requirements for advisors to small retirement plans with less than $50 million in assets, which primarily constitute small businesses.
Advisors to larger plans with more than $50 million in assets are carved out of the rule but additional burdens to advisors to small plans will results in higher costs and potentially less service as advisors choose to no longer work with small plans.
Offering a retirement plan as part of a benefit package is an important recruitment tool for small businesses, but if the cost of these plans rise due to burdensome requirements on those that serve the plans, this benefit could erode. In fact according to a survey by the Greenwald and Associates research firm, 30 percent of businesses with a retirement plan indicated they were somewhat likely to drop their plan if the rule is finalized and nearly half of those without a plan expressed that this rule discouraged them from establishing one.
Further, much savings have been amassed by small businesses and their employees over time. Small businesses have contributed approximately $472 billion in assets covering 9 million U.S. households through SEP IRAs and SIMPLE IRAs which is of critical importance as millions of Americans reach retirement age.
The Kentucky Chamber of Commerce voiced opposition to the proposed rule last summer by sending a letter to the Kentucky Congressional delegation and now joins other business associations in asking Congress to take action to protect small businesses and their retirement planning for employees.