Lisa Hagerty: Consider public retirement plan options - VTDigger
 

Lisa Hagerty: Consider public retirement plan options

Editor’s note: This commentary is by Lisa Hagerty, who is the owner of Well Heeled and The Yoga Barn in Stowe and a National Leadership Committee member for the Main Street Alliance

As a small business owner in Stowe, I work to do my best to pay my employees fairly and provide an environment that supports them in their life both in and outside of work. Most Main Street business owners know that investing in their employees is the key to a successful business and to accomplish this, many of us manage supports beyond fair wages in nontraditional ways. One place where there is no room to maneuver, however, is in the provision of retirement plans. Small business owners wear many hats, but being investment advisers should not be one of them.

Here are some stats: About 45 percent of working Vermonters do not have access to an employer-sponsored retirement plan.[1] And nationally, half of all employees have no retirement assets — no pension, no 401(k), no IRA. The problem is particularly acute for people who work for small businesses, including the business owners themselves. Among the small, “main street” business owners that were surveyed during 2016, as part Main Street Alliance of Vermont’s statewide survey project, only 9.5 percent reported providing a retirement plan to their employees.[2]

Vermont is a predominantly small business state, and the inability of these businesses to afford robust benefits packages puts them at a disadvantage in attracting and retaining a skilled workforce. The lack of benefits also limits the ability of the workforce to choose our state and our small businesses as employers. An important factor in making a state “business friendly” is to increase its attractiveness for potential employees to afford to live there. Vermont has so much going for it in terms of livability – but we need to make our small business economy accessible to more people — allowing the opportunity to work closer to home and children, to relocate to for improved lifestyle, or to be able to work in the familial environment of one of our many small main street businesses. The lack of robust benefit packages puts these options out of reach for most people to either work for, or start, a small business.

More than 25 states, including Vermont, have taken steps to begin creating pooled, state-managed retirement savings plans for small business owners and our employees. Seven states are already implementing them. These state-administered retirement initiatives have proven to be an innovative solution to the retirement savings crisis. This is a win/win for a state with an economy so heavily reliant on small businesses.

Vermont’s Public Retirement Study Committee, led by Treasurer Beth Pearce, has spent years investigating the right public retirement option for Vermont. In its third report, issued in January, the committee recommended moving forward with a Multi-Employer Plan (MEP) to which both employees and small business owners could contribute. Now, legislation is moving in both the House and Senate that would set up the MEP and give every Vermonter access to a secure retirement option.

GOP leaders want to revoke rules put in place by the Department of Labor last year that allow states to establish retirement savings arrangements for small business owners and employees not covered under workplace savings policies.

 

Programs like this that put small business owners in the best position care for themselves throughout their lives, while helping employees do the same, are a no-brainer. So why are Republicans in Congress poised to dismantle them? It’s hard for me to imagine; but here’s what’s going on.

Through introducing H.J. Res. 66 and H.J. Res. 67, GOP leaders want to revoke rules put in place by the Department of Labor last year that allow states to establish retirement savings arrangements for small business owners and employees not covered under workplace savings policies. Although the plan set out by Vermont’s treasurer and state Legislature would not yet be affected by the pending actions at the federal level, it is likely only a matter of time until our state’s proposal comes under fire.

With such pressing issues as access to health coverage for millions of their constituents at risk, it’s hard to fathom why Republican lawmakers in Washington have set their sights on dismantling new rules that garnered bipartisan support and put small business owners, their employees and customers in the best position to succeed.

I feel lucky to live in Vermont and to be a small business owner. Actually nothing is more rewarding. It’s comforting to trust that Sens. Bernie Sanders and Patrick Leahy will continue fighting for working class people, including small business owners – but we must all persist in mobilizing to keep their colleagues honest in pursuing what’s good for the country over what’s good for their party politicking. Equally as importantly, I encourage Vermont’s state legislators to continue moving forward with smart state level policies, like the MEP Public Retirement Option, that support workers and small business. It’s the right thing to do.

 

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