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DOL Relaxes 401(k) Rules for Small Businesses

Published on by Matt Rosen in Benefit Plan Audits

DOL Relaxes 401(k) Rules for Small Businesses

On July 29, 2019, the U.S. Department of Labor released a final ruling that allows smaller businesses to link together and create joint 401(k) retirement plans for employees. This ability to link plans, historically restricted to businesses with common ownership, can provide significant cost savings as these joint plans will have the ability to negotiate lower administrative and investment fees.

The ruling is effective September 30, 2019, and allows businesses to combine based either on:

  • Being located in the same state or metropolitan area, or;
  • Being in the same industry.

An example of these rules in action would be a plumbing company and a startup tech company could join together, only if they were located in the same area, but a plumbing company in Ohio could join with a plumbing company in California.

It is expected that these joint plans, most commonly called multiple-employer plans, will begin being offered through regional chambers of commerce or other industry groups for their members. This should provide an increase in retirement plan participation as smaller businesses are currently less likely to offer retirement plan benefits to employees.

Contact Us

If you have questions or need assistance with the structure of your 401(k) plan, and whether this rule could benefit your company, Barnes Dennig can help. For additional information please call us at 513-241-8313 or click here to contact us. We look forward to speaking with you soon.


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