We have today released a special report for policymakers entitled “Smart Strongly Supports Auto IRA/Plan Legislation to Enhance Retirement Security,” describing how requiring employers to maintain a retirement plan can lead to a substantial leap in overall plan participation and retirement coverage for Americans.
Smart also surveyed over 800 small UK businesses that use the Smart Pension Master Trust platform to offer a retirement plan, and revealed that offering a retirement plan can be done in a way that is very simple for small employers to comply with. The majority of small employers surveyed said the administration of retirement plans is considered “routine” or “easy.”
Ninety-four percent of businesses with 10 or fewer employees report spending an hour or less administering the plan each month. Interestingly, it is only among businesses with more than 100 employees that a majority report spending more than an hour each month on plan administration. Only 8% of all surveyed employers reported that the plan administration was a “significant additional burden.”
Following legislation in the UK requiring large and small employers to offer a retirement plan, private sector retirement plan participation rose from 42% in 2012 to 86% in 2019. The increase in participation was very consistent across all participant groups, including those that are typically the least engaged, such as the young, part-time workers, low earners and those working for micro-employers.
While the proposed US legislation is similar in many aspects to the UK legislation, it contains several features that make it even easier and less expensive for employers to comply with, such as:
“The data is very clear. The administration of retirement plans is not as burdensome as some have believed, but instead is simple and routine for small employers,” said Catherine Reilly, Director of Retirement Solutions at Smart. “This legislation symbolizes a great leap toward the future of retirement security that Americans deserve.”
Jodan Ledford, US CEO of Smart adds, “At Smart, we believe in empowering employers with the solutions they need to support wider access to retirement savings and ultimately retirement security. We have already seen how easy it can be for even the smallest of employers to offer cost-effective and compliant retirement plans, which is why we are proud to support this legislation.”
Smart is a global savings and investments technology provider. Its mission is to transform retirement, savings, and financial well-being, across all generations, around the world.
Smart partners with financial institutions (including broker-dealers, RIAs, retirement providers, insurers, asset managers, banks) and financial advisers to deliver retirement savings and income solutions that are digital, customized, and cost-efficient.
Smart, founded in the UK, operates in the USA, Europe, Australia, and the Middle East with over a million savers and over $5 billion in assets. Smart saw over 2,000% growth in assets on its platform since 2018.
Legal & General, J.P. Morgan, Fidelity International Strategic Ventures, Link Group, Barclays, Natixis Investment Managers, Chrysalis Investments, DWS Group and Aquiline Capital Partners are all investors to date in Smart.
For more information, please visit www.smartretire.com.
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