As someone who decided to open a day spa in a popular vacation spot, I’m competing for talent with established resorts that have comprehensive benefits. The math is pretty simple: We need to be able to offer a suite of compensation and benefits that will keep our employees from moving over to our competitors. An integral part of this competitive equation is providing retirement savings plans that line up with what the big boys can offer.
One of the strongest headwinds that we face emanates from the U.S. Department of Labor, the federal agency charged with protecting those employees my company is trying to reward for excellence. Ironically, it has nothing to do with meeting minimum standards for wages, worker safety or other traditional “labor issues.” Instead, the problem is a new rule that is being finalized that would dramatically restrict the ability of small businesses like mine to offer professionally managed retirement savings plans.
The so-called fiduciary rule was written with the best of intentions: to protect retirement savers from dishonest advisors. One can argue whether this rule is even necessary, since investor protection has been the duty of the Securities and Exchange Commission for more than 80 years. However, one thing is undeniable: This rule is so complex and onerous that it will be too expensive for many small business owners to offer retirement savings plans.
Proposed rules aim to protect retirees’ savings
The retirement plan I set up for my employees has gone smoothly for years. I don’t understand why the Labor Department is proposing a rule that includes provisions that treat the retirement plan I offer my employees different than the ones larger employers, such as 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, and I’m concerned it might prevent me from helping my employees achieve retirement security.
This rule is bad for the competitive marketplace and bad for employees. I hope Congress can help change the Labor Department’s mind and fix this rule so it helps small businesses like mine in the long run.